27 August 2014

Analysis by the TUC shows that around 300,000 claimants will be forced to wait at least five weeks to receive any unemployment benefit under the new Universal Credit system.

And yet, debt charity Step Change found that 13 million people do not have enough savings to last a month, with 6 million currently having to borrow to make it to payday.

The TUC argues that this will hamper claimants’ path back into employment by burdening them with financial problems. General Secretary Frances O’Grady described the wait as “a debt trap that will hit hundreds of thousands of people each month.”

She said “the five-week wait is a collective punishment for anyone who loses their job. People need to focus on finding new work, instead of being stressed out about how they will pay the rent, feed the kids and keep the heating on.”

The five-week wait and the introduction Universal Credit represent a further reduction of social security, forcing the unemployed into poorly paid, precarious work and Zero Hours Contracts (ZHCs).

The issue of new stringent benefit constraints due to be introduced under the Universal Credit system is discussed in some depth in a new report from IER. Zoe Adams and Simon Deakin argue that “Universal Credit will introduce new forms of conditionality which will increase the pressure on individuals to accept casualised forms of employment”.

To find out more, Re-regulating Zero Hours Contracts by Zoe Adams and Simon Deakin is available here.