When individuals apply for benefits, they have to wait five weeks for their first payment. This is part of the Universal Credit welfare system, conceived in 2010 by the then work and pensions secretary, Iain Duncan Smith.
This payment delay is one of the most damaging features of the welfare system, meaning those who suddenly face unemployment, experience a drop in working hours, or are transferred from the old legacy benefits system can be left without income for more than a month.
In some cases, owing to glitches in the system or a wait for a work capability assessment, this delay lasts even longer than five weeks. During years of reporting on Universal Credit, the New Statesman has heard from people waiting for as long as four months and falling into debt and rent arrears. The payment delay has also been one of the main drivers of rocketing foodbank use over the past five years.
Yet it is entirely unnecessary to the system’s design, Duncan Smith, who served as work and pensions secretary from 2010 to 2016, told the work and pensions select committee this morning (1 July). It was “never originally part of the structural plan for Universal Credit”, he said.
Originally, because of its monthly payment basis, Universal Credit claims would take a month to assess. The waiting time increased in 2015, when a seven-day waiting period was introduced in law, meaning claimants would have to wait up to six weeks for their payments. It was reduced to a five-week wait in 2017 under Theresa May’s government, under pressure from Tory backbenchers and Labour.
Duncan Smith said the extra waiting days brought in after 2015 were not “for elements of efficiency”, but rather because “there was a view that the wait period could be longer” – something he said he didn’t necessarily agree with at the time.
He told the committee the wait could be changed (although he believed it should not be, arguing that the Department for Work and Pensions should now focus on the scale of new claimants due to the Covid-19 crisis).
“My general view is I would do nothing on this score to change it at this particular stage, but can it be changed? The answer is yes, because it was a policy element, a decision made.”
According to a report by the Social Security Advisory Committee, which warned against the extra “waiting days” proposed in 2015, a consideration in the decision-making process was “the overall financial context and the need to deliver savings”.
Even the four-week wait, designed to mimic the month a regular salaried employee waits for their first pay cheque, is not firmly evidence-based. More than half of Universal Credit claimants (58 per cent) were in fact paid weekly or fortnightly in their last job before claiming, according to research by Lloyds Banking Group into seven million of its bank accounts.
Indeed, the Conservative peer Philippa Stroud, who was Duncan Smith’s ministerial special adviser, suggested to MPs at the same select committee session that Universal Credit should be paid weekly and fortnightly to those who had been paid their wages in this way.
“At the time that was not possible to do in the digital system,” she said. “But I suspect now the whole machinery is more stable that… it would be something worthwhile revisiting.”
Yet even during the pandemic, with mass unemployment forecast and the need for workers, some without adequate sickpay, to immediately self-isolate for two weeks if necessary, the five-week wait remains.
To continue shoehorning people into the spending and saving rhythms of monthly salaried workers exposes the same evidence-blindness as the return to sanctions and conditionality announced by the government on 29 June.
As my colleague Stephen Bush explained, evidence shows that sanctions (pausing benefits for often minor transgressions) don’t work, and that conditionality for working-age benefits (35 hours per week of job-seeking activities) is illogical in a labour market ravaged by the coronavirus lockdown.
Indeed, a survey by a team of academics, released in June and available to read on the University of Salford’s website, brought the premise of conditionality into question by demonstrating that the majority of new Universal Credit claimants are still seeking work, despite a pause in job-seeking requirements in this time.
Both blinkered adherence to the five-week wait and insistence on conditionality reflect a wrongheaded “moral” reading of welfare. To take out, you have to give back – as if unemployment or in-work poverty is some kind of desirable state. Without incentives, workshy dependency results – nonsensical, in a country where it no longer pays to work for one in eight workers.
For politicians, this merely serves a rhetorical purpose: tough love for a public well-versed in the tabloid myth of “scroungers”, “skivers” and “benefit cheats”. The evidence simply isn’t there.
New reports by academics from York, Ulster and Glasgow universities for the Joseph Rowntree Foundation, for example, show sanctions-backed conditionality has failed to support and encourage people back to work, making the system far too harsh and potentially life-threatening.
It’s not just academics. Claimants and Jobcentre work coaches themselves report that sanctions don’t work, and create a counterproductive atmosphere of mistrust and hostility between claimant and adviser.
Even employers are negative about conditionality; a January study found that it results in large volumes of unfiltered and unsuitable job applications, “box-ticking” and compliance targets. This is despite enthusiasm to recruit unemployed people searching for work.
Such topsy-turvy “policy-based evidence” is at the heart of Universal Credit’s design, exposed more than ever by the new Covid-19 wave of claimants.
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