Other findings include:
- 90% of low-income households on Universal Credit (UC) are going without essentials
- support has eroded over decades and the basic rate (‘standard allowance’) of UC is now at its lowest ever level as a proportion of average earnings
- almost half of households see their payments reduced by deductions and caps
As a solution, the two charities propose the introduction of an Essentials Guarantee.
This would embed the widely supported principle that, at a minimum, Universal Credit should protect people from going without essentials.
The policy would enshrine in legislation:
- an independent process to regularly determine the Essentials Guarantee level, based on the cost of essentials (such as food, utilities and vital household goods) for the adults in a household (excluding rent and council tax);
- that UC’s standard allowance must at least meet this level
- that deductions (such as debt repayments to government, or as a result of the benefit cap) can never pull support below this level.
The UK Government would be required to set the level of the Essentials Guarantee at least annually, based on the recommendation of the independent process.
The report finds that payment would need to be at least £120 a week for a single adult and £200 for a couple.
If the Essentials Guarantee were implemented before full rollout of UC, it should also be applied to legacy benefits such as Employment and Support Allowance.
The welfare system should provide a financial safety net for Disabled people and those with long-term health conditions. The level of support should be such that Disabled people can live independent lives.
Yet, since 2008, changes to welfare benefits have led to this safety net failing, causing people to feel abandoned by a cruel and unfair system.
Welfare reforms introduced in that period include the introduction of employment and support allowance, the work capability assessment, personal independence payment, the bedroom tax, the benefit cap, the two child limit, and universal credit, all of which have negatively impacted on Disabled people.
Disabled people have lost benefit payments of around £1,200 on average each year, as a result of the changes. Non-disabled people have seen a reduction of around £300.
By improving the adequacy of the core building block of the system - the standard allowance - and protecting it against deductions, the Essentials Guarantee would help everyone on UC.
For example:
- over half (56%) of all working-age families in the UK with a
disabled family member would benefit - around a million people would be lifted out of poverty.
The report concludes that: “The cost of implementing the Essentials Guarantee at the indicative level would be an additional £22 billion a year in 2023/24 (assuming full rollout of Universal Credit).
While this is not insignificant, people going without essentials has a devastating impact on individuals/families, society and the economy. there would also be savings to public services as a result of improved outcomes, which are not accounted for in the costings.
Ken Butler DR UK’s Welfare Rights and Policy Adviser said:
“Since 2008, welfare benefit reforms have led to Disabled people having lost benefit payments of around £1,200 on average each year while non-disabled people have seen a reduction of around £300.
January 2023 research by the Resolution Foundation highlighted that Disabled people are hardest hit by the Cost-of-living crisis, disproportionately struggling to pay energy costs and food bills.
The proposed Essentials Guarantee would improve Disabled people’s standard of living.
However, while the thrust of the proposal is extremely positive, it is not as generous. as The Plan for a Decent Social Security System, produced by the Commission on Social Security - led by experts by experience, which calls for a Guaranteed Decent Income (GDI)
DR UK supports the proposal to replace UC and all other legacy benefits with a GDI that would:
- have no sanctions, no benefit cap, no bedroom tax, no conditionality, no five week wait for first payment and no two child limit.
- meet the Joseph Rowntree Foundation Minimum Income Standards for what amount of money is needed for an acceptable standard of living.
- include a Disability Supplement as part of GDI.
- Introduce a new non-means tested benefit to meet the additional costs of disability, to replace PIP.
For more information, see Guarantee our essentials: reforming universal credit to ensure we can all afford the essentials in hard times available from jrf.org.uk.
See also our related news story PIP replacement part of new user-led plan to transform the social security system.