Universal Credit ‘income shock’ could drive foodbank use
In a written submission to the Scottish Parliament’s social security committee, the charity said that its analysis showed “an increase in demand for foodbanks in areas of full Universal Credit rollout even when accounting for seasonal and other variations”.
The Trust highlighted concerns that Universal Credit was not sensitive to the realities of irregular work, that the impact on self-employed people has not been fully evaluated and that larger families will see a cut in their income.
The submission also warned that moving people from working tax credits and child tax credits to Universal Credit would cause an increase in in-work poverty.
It added: “Income shocks have been shown to be a key trigger for a foodbank referral, particularly for vulnerable groups like disabled people and families with dependent children.”
SFHA policy advisor, Jeremy Hewer, said: “The Trussell Trust report is the just the latest to highlight concerns over the way Universal Credit is delivered to in-work households, the other notable report being CPAG’s Rough Justice, published in August.
“SFHA shares these concerns, as well as having misgivings over the processes underpinning Universal Credit – in particular the third party payment system that supports Managed Payments to Landlords and Scottish UC Choices Direct Payments – which is why, together with our sister housing federations in the rest of the UK, we launched our Five Asks campaign.
“There has been a lot of speculation over what changes may be announced in the Chancellor’s autumn statement on 29 October. Whatever changes are made, unless there is more investment in the DWP’s systems development resources, the concern is that they will be of detriment to the schedule for process improvements.
“Measures, like enhancement of the landlord portal, development of a third party creditor system that is synchronised with UC payments, and a fix to effectively abolish the bedroom tax at source, are urgently required and need proper investment now.”
SNP Shona Robison MSP said the warning highlights the urgent need to fix the “broken welfare system”.
Ms Robison added: “This is a stark warning from those at the frontline of the fight against poverty – and it underlines just how much damage the botched rollout of Universal Credit is causing.
“Families could be pushed over the breadline by these cuts, with the move to Universal Credit costing some households £2400 a year.
“Philip Hammond must use his budget to pause the rollout and fix this broken system.”