Welfare reforms for newly unemployed will harm chances of a quick return to work, says TUC6 August 2014
New analysis published by the TUC has shown that the majority of claimants who will be hit by the government’s new five-week wait welfare reform are short-term claimants who only claim the benefit for a few weeks. The full analysis, undertaken by the Centre for Economic and Social Inclusion, can be found here.
Currently most workers who lose their job have to wait two weeks before they get their first benefit payment. But under new Universal Credit rules for assessing unemployment claims, most people will face a wait of more than five weeks before they get any money. This could mean going two months into rent arrears before any cash support arrives.
The analysis shows that most newly unemployed benefit claimants are currently back off the benefit within three months, and that only one in ten are still on the benefit after a year.
The most recent data indicates that:
56 per cent of claimants leave within three months
77 per cent of claimants leave within six months
86 per cent of claimants leave within nine months
91 per cent leave within 12 months
93 per cent leave within 15 months.
Further analysis shows that close to 300,000 people across the UK will be hit by the five-week wait each month. The London and North West England UK regions will have the most people affected, with around 40,000 hit in each of those regions every month.
The TUC warns that the five-week wait for safety net support will push many claimants into financial problems that distract them from focusing on finding a new job. A recent report by the debt charity Step Change found that 13 million people do not have enough savings to last a month, with six million people already having to use credit to make it through to payday. In the Universal Credit pathfinder areas, interim evaluation published by DWP in November 2013 showed that 34% of Universal Credit claimants had borrowed money, compared to 19% for a control group receiving Jobseeker’s Allowance.
Despite the enormous numbers of people who will be affected, recent polling by YouGov for the TUC has revealed that fewer than one in seven people (13 per cent) say they have heard of the plans. Seven out of ten people (70 per cent) say that they would be worried when asked to imagine losing their job and not being entitled to receive any benefit payments for five weeks. More than half (52 per cent) say it makes them think less favourably of the government’s welfare reforms.
TUC General Secretary Frances O’Grady said: “The government is sneaking through changes that will make newly unemployed claimants wait at least five weeks before they get any cash support. It’s a debt trap that will hit hundreds of thousands of people each month.
“It’s right to deal with people who abuse the system, but the five-week wait is a collective punishment for anyone who loses their job. People need to focus on finding new work, instead of being stressed out about how they will pay the rent, feed the kids and keep the heating on.
“The government is out of touch and ministers simply don’t understand the anxiety many people feel not knowing if they’ll still have work next month. If your job goes, the five-week wait puts you at greater risk of a downward spiral where you’re trapped in debt, lose your home, become ill from the stress and fall too far to climb back again.
“We are launching the Saving Our Safety Net campaign to expose government welfare plans for what they are – cuts to the National Insurance safety net we’ve all paid into on the understanding that it will be there when we need it.”