The time Universal Credit claimants have to wait for their first payment has been cut to three weeks, Esther McVey has confirmed in a climbdown for the Government.
The Work and Pensions Secretary has revealed changes to the flagship benefits programme made in the Budget last week.
Under a “managed migration” system, families will now be left waiting for their first payment three weeks, a shift from the previous five.
Debt repayments will be cut, a one-month deadline to switch benefits will be extended to three and help for the self-employed will be increased.
Funding of £4.5bn for the benefit was confirmed by Chancellor Philip Hammond.
It comes after a torrent of criticism has been levelled at the rollout of UC, with many claiming the benefit was pushing people into poverty and foodbank use.
The lates damning report came from the Social Security Advisory Committee, who said the five-week wait was “unacceptable” and lambasted ministers for introducing the benefit, which sees five benefits rolled into one, as having an “unrealistic” timetable.
The £1bn changes to Universal Credit include:
A claimant’s old benefit – income-based Jobseekers’ Allowance and ESA, or Income Support – will continue for 2 weeks in order to bridge the gap between payments.
The one-month deadline to claim will be extended to three months.
Advance loans to help people transition on to UC will only be clawed back at 30% of benefits per month, not 40%. The payback period will extend from 12 to 16 months from October 2021.
Small business owners who move onto UC will get a new one-year “grace period” exempting them from the “Minimum Income Floor”.
The policy of disregarding £2,500-a-month of surplus earnings (protecting people who have fluctuating wages) will extend from 2019 to 2020.
McVey said: “This is targeted support to help work pay and support the vulnerable.”
However, the changes only cover existing claimants who will be moved onto Universal Credit through “managed migration” from July 2019.
McVey’s announcement does not include a £1.7bn separate package to make “work allowances” – the amount people can earn before benefits reduce – £1,000 a year more generous.
It also does not cover new claimants whose circumstances change, who will not be eligible for transition arrangements.
Labour MP Jess Phillips raised the case of a single mother in her constituency whose circumstances changed after she was raped by someone she lived with.
“I want to ask the sos about my constituent who was raped by the man that she lived with and had to move and she was forced on to Universal Credit because of a change in circumstances,” she said.
“She works. She has always worked. She is £200 worse off. She is a single mother.”
McVey said she would meet with Phillips to discuss the individual case.
Shadow work and pensions secretary Margaret Greenwood dismissed the package and again called on the Government to pause the benefit’s roll-out.
She said: “The Budget last week did little to address the very long wait for payments which is causing significant hardship.
“Despite this the Government is now planning to start the next phase of introduction of Universal Credit which it calls managed mitigation which will involve the transfer of £2.87 million onto it.”
She added: “Universal Credit is failing, the Opposition has consistently called on the Government to stop the roll-out but this Government is pressing ahead despite the terrible hardship it is causing.”