Thousands of Gateshead households still on legacy benefits
Thousands of households remain on legacy benefits in Gateshead ahead of the Government’s target to complete the Universal Credit rollout by 2024, new figures show.
Debt charity StepChange said many claimants are being pushed into hardship by having to wait more than a month for their first Universal Credit payment after migrating from older benefits.
And measures recently announced by Chancellor Rishi Sunak to help with the cost-of-living crisis have been criticised for not going far enough to help low-income households.
In Gateshead, 10,554 households were claiming Universal Credit in February after being transferred from legacy benefits, while an estimated 4,775 remained on the old system, according to figures from the House of Commons library.
This means around 31% of households in the parliamentary constituency are still on older benefits, such as Employment Allowance, Income Support and Jobseeker’s Allowance, which are set to be fully replaced in two years’ time
StepChange said moving from legacy benefits to Universal Credit – which rolls six means-tested benefit payments into one monthly deposit – is challenging because new claimants must wait five weeks for their first instalment, meaning some people need a budgeting advance, while others can be pushed into debt.
Ed McDonagh, senior public policy advocate, said: "Overall, Universal Credit can work to support people, but it also has features that can cause real hardship and can actually worsen people’s debt as they try to work around them."
Across Great Britain, 4.8 million households were claiming Universal Credit in February – 66% of the total number receiving benefits.
It means 34% of households remain on legacy benefits despite the rollout starting in 2013.
In his spring statement, Mr Sunak did not respond to calls to increase Universal Credit and legacy benefits in line with inflation – which means many will see a real-terms benefit cut from April – instead announcing that £12 million would be provided to reduce tax credit error and fraud and “in turn support a smooth transition to Universal Credit”.
Households still on legacy benefits also missed out on the £20 uplift to Universal Credit introduced during the coronavirus pandemic.
However, Dr Phil Agulnik, director of online benefits calculator EntitledCo, said "not everyone should be in a rush to move" from legacy benefits to Universal Credit, and that differences in payments mean an estimated 1 million people could be worse off after making the switch.
He urged people to use independent tools and advice to work out what support they are entitled to.