The Trussell Trust food bank network said the minimum 35-day wait for payment endured by claimants after signing on to universal credit could have a rapid, devastating and long-lasting impact on their finances, housing security and mental health.
Claimants unable to cope without income during the waiting period faced destitution, Trussell said. They were unable to afford food, frequently went without meals, failed to pay utility bills, ran up rent arrears and risked eviction.
Food bank use had soared by a third in areas where universal credit had operated for a year, it said, drawing on data from 414 food banks. Demand for food parcels increased by 40% where universal credit had been in place for at least 18 months, and 48% where it had been established for at least two years.
Government measures to mitigate the negative effects of the five-week wait were either limited or failing, Trussell said. Repayable advance loans issued to claimants to tide them over simply created long-term difficulties for claimants as they paid them back, in effect leaving them “deciding between hardship now or later”.
“Universal credit should be there to anchor any of us against the tides of poverty. But the five-week wait fatally undermines this principle, pushing people into debt, homelessness and destitution,” said Trussell Trust chief executive Emma Revie.
The scale of the problem was underlined by separate research published by the Joseph Rowntree Foundation which estimated that that two in five families set to move on to universal credit in future – about 2m households – will be unable to meet basic living costs during the five-week wait.
The foundation said there was “nothing compassionate or just” about the five-week wait for an initial payment, which it described as “immoral.” It backed Trussell’s call to shorten it, saying that universal credit was forcing families to go to food banks when it should be helping to reduce the need for them.
The design of universal credit built in a six-week waiting time for a first payment – later reduced to five weeks – to put claimants on to a monthly-in-arrears payment cycle, paid electronically, ostensibly to reflect the world of work. The benefits it replaces typically had a 15-day wait for payment.
However, the designers seemingly failed to recognise that substantial numbers of claimants were used to one or two-week payment cycles, and few had sufficient savings to tide them over a lengthy period without income, making their transition to the new benefit an often traumatic struggle.
A devastating auditors’ report last year found it was unlikely to deliver planned financial savings or employment benefits.
Gillian Guy, chief executive of Citizens Advice, said the Trussell data echoed its own findings. “It’s clear, from the findings across the charity sector helping universal credit claimants, that the system is not providing everyone with the financial safety net people need,” she said.