The Salvation Army Calls For Universal Credit Loans Reforms

Written by: Posted on: 24 June 2020

The Salvation Army has provided a written submission to a House of Lords inquiry into the economic impact of Universal Credit, with calls for more breathing space for claimants with problem debt. The submission made on 22 May also included calls for an end to the five-week wait for a first Universal Credit payment to avoid a national crisis for families, as well as calls for increased protection against homelessness.

The Salvation Army has submitted a written call to provide breathing space for Universal Credit claimants in difficulty, as well as an end to the existing five-week wait for an initial U.C. payment, stating that the current clauses could cause a national crisis. The submission was sent to a House of Lord inquiry looking into the economic impact of Universal Credit.

The Salvation Army noted that even before the COVID-19 pandemic, there has been a rise in the number of people using food banks to feed their family in order to pay back Universal Credit debt. 

The Salvation Army’s Head of Public Affairs, Matthew Sowemimo, said: “While we welcome the changes the Government has made to help people access benefits during lockdown, many people made unemployed during the pandemic have already got significant debts. Some who have lost their jobs simply have no financial safety net to help avoid getting into debt straight away and to have money deducted from their benefits before it even reaches their pocket will cause greater problems as people struggle to buy food for their families.

“The Government has an opportunity to make Universal Credit work in the long term and we need to make sure it is sustainable so that the fall out of unemployment due to the pandemic doesn’t leave a lasting legacy of debt.”

Some who have lost their jobs simply have no financial safety net to help avoid getting into debt straight away and to have money deducted from their benefits before it even reaches their pocket will cause greater problems as people struggle to buy food for their families.

Additionally, The Salvation Army has called for the government to replace Universal Credit advance payment loans with grants that are not required to be repaid. 

Currently, the advance payment loads are available for people who need funding while they wait for their five weeks for their initial payment.

With over 1.8million applications for Universal Credit in the past six weeks to 12 April this year (more than five times higher than the the same time last year), The Salvation Army say that it is more vital than ever to address these issues to help the thousands of people who have lost jobs and risk going into debt due to the pandemic.

Universal Credit Reform Calls

To summarize, The Salvation Army is calling for:

  • Replacing the five-week wait for a first Universal Credit payment with a one-off grant for new claims
  • A change of approach on how the Department for Work and Pensions offers support for people with mental and physical ill-health to ensure they can still receive Universal Credit while searching for jobs
  • Jobcentres to ensure they can consistently deliver support to people who need to improve their skills to find employment

Following the release of a Work and Pensions Select Committee report that recommends changes to the benefits system to better support people, Rebecca Keating, director of Employment Plus at The Salvation Army, said:

“We recognise the efforts of the Department for Work and Pensions in ensuring the two million newly unemployed by the lockdown economic shock were signed up to Universal Credit.

“But our own research has found there is overwhelming evidence that many people struggle to apply through the mainly digital Universal Credit system, meaning as well as being unable to buy food or pay bills they are also not able to access support to find a job.

“Jobcentres are at high risk of being completely overwhelmed with millions of people looking for work. Many of those people will have fresh job skills, meaning the long-term unemployed will find it even harder to get work and are at risk of losing the support they need as Jobcentre work coaches find their caseloads grow exponentially.”