DWP Figures Expose Housing Arrears of Universal Credit (UC)

New DWP figures expose the extent of arrears amongst claimants receiving a housing element of Universal Credit (UC), with a major anti-poverty charity saying the survey findings show the so-called reform to be a “dismal failure” for the increasing numbers relying on it.

The DWP has already been accused of downplaying damning findings from its own Universal Credit Full Service Survey.

Instead, the Child Poverty Action Group offered an interpretation of the statistics saying that around three months into their claim only just over half of claimants (53%) were keeping up with bills and credit commitments while 44% were falling behind or experiencing real financial difficulties.

At eight to nine months into their claim, 57% were keeping up while 40% were falling behind or experiencing real financial difficulty.

Of claimants receiving a housing element, 36% in the first three months of their claim and 37% of those eight or nine months into their claim, were in arrears.

Of those in arrears, 65% said they fell into debt after they made their Universal Credit claim.

And 71% of those in arrears at three months were still in arrears at eight to nine months into their claim with 44% saying the amount they owed had got larger – compared with 29% who said it had got smaller and 27% who had caught up.

Other key findings include:

“The DWP’s own survey findings show Universal Credit is a dismal failure for a large number of people who rely on it.

Image: Alison Garnham became Chief Executive of CPAG in September 2010.

It is clear that there are still many people who, months into their claim, are being left with too little to live on.

“Universal Credit once had strong poverty-reducing potential but big funding reductions have meant it is failing to achieve its original aims – many of its design faults have been allowed to go uncorrected.

“Unless funding for universal credit is restored and its design re-visited, this once flagship benefit will continue to fail.”

The Universal Credit Full Service Survey, is based on interviews with over 1000 claimants in March 2017 and September 2017 – approximately three and eight months into their claim.

According to the survey, 83% of claimants were paying housing costs of some sort.

Three in 10 claimants (30%) were in the private rented sector; one quarter (2%) were renting from a council or local authority and one in six (15%) were renting from a housing association.

Eight per cent of claimants were living with friends or relatives and paying some rent and 5% were paying for their housing through either a mortgage or shared ownership arrangement.

Among those not paying housing costs, a majority (11% of all claimants) were living with friends or relatives and not paying rent.

Overall, seven out of 10 (72%) of claimants in the survey were receiving payments towards their housing costs.

The majority were confident managing their housing costs, with confidence higher among those renting privately, compared with social housing tenants.

Alternative Payment Arrangements (APAs) are available for claimants who struggle to manage housing payments.

The survey showed 22% of those receiving payments towards their housing costs said they had an APA in place.

Slightly more than one third of claimants receiving UC payments towards their housing costs were in arrears in both surveys.

Among those who were in arrears, two thirds (65%) said they fell into debt after they made their claim for UC.

There were also signs of the situation deteriorating over time for some claimants.

Seven out of 10 (71%) of those in arrears at three months into their claim were still in arrears at the eight to nine month point and 44% said the amount they owed had become larger.

As part of the survey, all those receiving payments towards their housing costs were asked how confident they felt in their ability to make sure their housing costs were paid each month.

Eighty-four per cent said they felt confident to manage/pay their housing costs, with 55% saying they felt ‘very confident’.

The DWP acknowledges this finding is based on a small base size and should be interpreted with caution.

Those renting privately were more likely to say they felt confident, compared with those renting from a local authority or housing association (89% and 81% respectively).

Claimants who were experiencing some form of financial difficulty were less likely say they felt confident, although confidence levels were still fairly high.

This includes both those who said they were in housing arrears (73% compared with 91% of those not in arrears) and those who said they were struggling to keep up with bills and commitments (67% compared with 97% of those keeping up).

Those with an APA in place were less likely to say they felt confident (78% compared with 86% of those with housing costs but not APA).

Looking at claimant characteristics, confidence in paying housing costs was higher among women (87% compared with 78% of men), younger claimants (90% of those 16-34 compared with 80% of all other age groups) and claimants without any long-term health conditions (89% compared with 79% of those with a long-term health condition).

All claimants with housing costs were asked whether they were able to keep up with these payments or whether they were in arrears.

The proportion of claimants in arrears remained relatively stable at just over a third in both surveys.

The stats recognise some groups of claimants were more likely to be experiencing arrears in both surveys. These were:

• Those with a household income of less than £10,000
• Those with a long-term health condition
• Those renting from social landlords
• Those who have received an advance payment from Jobcentre Plus in the last three months prior to the second survey
• Those with an APA in place.

All those in arrears were asked whether the arrears began before or after their UC claim.

Overall, nearly two thirds (65%) said their arrears began after their claim, while 34% said they were already in arrears before they started claiming.

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