A new report by the Work and Pensions Committee 'Universal Credit: the wait for a first payment', has found the current wait of at least five weeks for a first payment is causing financial difficulties for some households.
It has also found flaws in the Advance payments system, highlighting that some people are unable to afford the required repayments.
The report recommends the DWP make starter payments for new claims, and move people from existing benefits without a gap. It is also endorses keeping the £20 increase in Universal Credit introduced during the pandemic beyond April 2021.
Commenting on the report, Peter Tutton, Head of Policy here at StepChange, said:
“We welcome the call for people claiming Universal Credit for the first time to receive a starter payment equivalent to three weeks of the Standard Allowance.
"The Five Week Wait is simply untenable, with our stats showing that 92% of clients affected by it have experienced some form of hardship or financial difficulty. In many cases, the wait for Universal Credit contributes to an individual’s debt problems.
“We also support the reduction of the cap on deductions to 10% and the need to bring forward the extended repayment period for advances. Evidence shows that 93% of people affected by deductions have experienced some financial difficulty or hardship as a result, with the unaffordable rate of deductions pushing people further into debt.
“As the financial impacts of coronavirus continue to be felt across the country, it remains essential the Government undertakes fundamental reform of the Universal Credit system if we are to avoid more and more people being swept into hardship. The implementation of these recommendations would be a strong starting point.”