The Government’s flagship benefit reform, Universal Credit, could be sailing into choppy waters. Universal credit aims to simplify benefits and to make work pay. It does this through amalgamating different means-tested benefits and tax credits, paid for different purposes and potentially payable to a different member of a couple. Included in Universal Credit are payments previously paid separately for housing costs and for children (Child Tax Credit).
Because it is one benefit, only one partner in a couple is paid Universal Credit – even though a couple has to make a joint claim. As charities and women’s groups have pointed out, this concentrates power and resources in the hands of that one partner, which risks encouraging financial abuse. Also by lumping child payments in with other benefits, the advantage of a clearly-labelled payment for children, which was paid to the person responsible for a child, could be lost.
A claimant can ask the Department for Work and Pensions to split their Universal Credit, so that each partner gets a certain proportion of the total award. However this is only available in ‘very exceptional’ circumstances and only when there is financial abuse or mismanagement. The application process for a split payment requires a claimant to disclose abuse, which survivors of domestic abuse may be reluctant to do, and people fear could risk worsening the abuse when the abuser finds out. Split payments are made at the discretion of Jobcentre Plus advisers and is discretionary and temporary. Instead, there have been calls for Universal Credit to be separated as a matter of routine when a couple claims it.
The House of Commons Work and Pensions Committee is currently looking into Universal Credit and financial abuse, taking evidence until 30 April. The Work and Pensions Committee held an oral hearing on 18th April. Witnesses included Marilyn Howard from the University of Bristol Law School and a member of the Women’s Budget Group, together with Dr Nicola Sharp-Jeffs of Surviving Economic Abuse.
They put forward concerns about the greater potential for financial abuse within Universal Credit, and suggested separating each partner’s online Universal Credit account and making separate Universal Credit payments. Examples of how to divide up the award between partners included paying each partner half of the award, or paying the child element of Universal Credit specifically to the person mainly responsible for children.
The Committee will make recommendations to Government in due course, and we await their report with interest.
* This post was first published by PolicyBristol, and is reproduced here with thanks.