UC is “not fit for purpose”: TUC calls for a new benefit “to deliver a fair and dignified system for everyone”

Thu,22 September 2022
News Benefits
A new report by the Trades Union Congress (TUC) focuses on why and how Universal Credit (UC) should be replaced as the main means-tested benefit.

While recognising that it wider reforms to the social security system–are necessary, the TUC says:

“We believe that implementing the reforms set out in this paper would create a new system, whilst making use of the investment that has been put into the existing IT to operate UC and avoiding disruption to current claimants.

“Our aim throughout is to provide a fairer, more effective system, and minimise problems for claimants and the staff who deliver this support.”

The TUC sets out the following set of principles that any reform of the benefits system should be trying to achieve: 

  • A system that helps to prevent poverty and works together with efforts to create decent work for all.  
  • A system that helps with additional costs, including childcare, housing, and the added living costs linked to disability. 
  • A system that is simple to understand and deliver and in which claimants and staff are treated with dignity.  
  • A system that promotes equality for everyone in society.  

Among the wide-ranging recommendations made by the TUC include the following:

Issue: UC fails to fully recognise the extra costs disabled people incur. Financial support for some groups of disabled people will be much lower in UC than current support available for people in the same circumstances.    

Solution: No one should lose out financially in UC; we need to look beyond transitional protection to ensure that disabled claimants are getting at least the amount they would have done in the legacy system.     

Issue: Claimants currently seeking financial support experience the inadequacy of social security payments.

Solution: To improve the adequacy of benefits, the TUC has called for the basic level of Universal Credit and legacy benefits, including jobseekers allowance and employment and support allowance, to be raised to at least 80 per cent of the national living wage (£260 per week).

Issue: Under the design of UC, claimants must wait at least five weeks for their first payment. This means that at the point when people may be at their most vulnerable, the system fails to support them.  

Solution: There is no justification for the five week wait for a first payment of Universal Credit. In the short term this can be replaced immediately with non-repayable grants. The amount can be estimated on the first monthly payment like the advance. 

Issue: The current benefit sanctions regime is callous. There are structural and personal barriers to gaining employment. There are many reasons why the TUC is troubled by the current system. Any replacement of UC must replace this system.     

Solution: The punitive sanctions scheme must be scrapped. Employment support must be designed to genuinely help people into decent work.

Issue: UC is designed by default to be online; this can make the application process difficult for many claimants.

Solution: More options for claiming the benefit, including widely available access to Jobcentres for those not comfortable with IT or who do not have access to IT facilities.  

Issue: Budgeting on monthly payments in UC is more challenging than the fortnightly or weekly payments in legacy benefits. And the support for housing costs is now part of the single payment made to claimants who are now responsible for paying their landlord directly. Claimants find this difficult on their tight budget.

Solution: Claimants should have options to be paid UC twice or four times per month to allow them to budget to suit their circumstances, rather than these being exceptional temporary discretionary arrangements as in most of the UK. And to have a similar option of the housing costs element of UC being paid directly to the landlord more automatically in the whole of the UK.

The TUC report, A replacement for Universal Credit, is available from tuc.org.uk.

See also our related news story Appeal granted against court judgment denying £20 per week uplift on “justifiable” disability discrimination grounds.