Resolve the five-week wait in Universal Credit

The following briefing on the 5-week wait was prepared by the Cliff Edge Coalition.

What is the 5-week wait in UC?

The 5-week wait is the wait between a claimant applying for Universal Credit (UC) and receiving their first payment. It is one of the most problematic and widely reported design flaws with the benefit. 

While Advance Payments are available to mitigate the 5-week wait these are loans which must be repaid, reducing the claimant’s income over a period of up to 2 years and effectively starting their claim off in debt. 

A National Audit Office report identified disabled and low-income families are more likely to claim advances, further impacting the most vulnerable groups in society.

What are the problems with the 5-week wait in UC?

• The evidence shows that the 5-week wait increases poverty and hardship.

• The 5-week wait is responsible for driving up food insecurity. Trussell’s 2023 report Hunger in NI reported that the 5-week wait is one of the key drivers for the need for foodbanks.

• Housing Rights NI have showed how the 5-week wait is more likely to cause rent arrears. In 2019, when only 13% of the population had migrated to UC – the average arrears for NIHE tenants on UC were £700.05, compared to an average of £191.82 for Housing Benefit claimants.

• Research from Ulster University (2020) found that UC was repeatedly described as a driver for illegal lending particularly around the harm caused by the 5-week wait and issues with short-term benefits loans that were repaid from future benefits. This ensured that benefit claimants were often short of the funds they needed to support their household leading them to look to other means of getting the money they needed.  Women’s Regional Consortium research on Women Living with Debt (2022) found that issues with UC particularly the 5-week wait caused financial hardship which impacted on the women’s ability to meet their necessary household expenditure and encouraged debt.  The Consortium has concerns that this could drive illegal lending including lending from paramilitaries as many of the women had poor credit scores and were unable to access safe loans.

• Research from the Regional Women’s Consortium on the Impact of Universal Credit on Women (2020) foundthat 58% of the women had applied for an Advance Payment to help them get through the 5-week wait.  Of those who had taken an Advance Payment 42% were experiencing difficulties paying it back. The most common reason given by the women for not taking an Advance Payment was the fear of getting into debt/further in debt, with others reporting being afraid they could not meet the repayments. 86% of the women the Women’s Regional Consortium spoke to as part of this research had not heard of the Universal Credit Contingency Fund. 

• Christians Against Poverty (2023) research found that the most common forms of priority debts owed by clients in NI were benefit overpayments and Social Fund or Budgeting Loans – in short, debts owed to the Government. These debts are typically collected through deductions from benefits at source. There is a strong connection between debt and poor mental health. The Christians Against Poverty (2023) research found that 81% of clients said debt has affected them mentally and devastatingly, 50% of those who responded to the survey said they had considered or attempted suicide as a way out of debt. This represents a stark rise of 14% since the last survey.

“I panicked into taking the loan (Advance Payment), next thing I knew they were taking £120 a month off me.  After a few months I said this is killing me, I have kids I can’t afford to be paying this.”

“If I had known about the Contingency Fund that would have really helped me.  Now they are taking £75 a month off me and I’m really struggling and getting more and more in debt.”

What did the 2016 Welfare Mitigations Package provide and what are the shortfalls?

As part of the original mitigations package a Universal Credit Contingency Fund (UCCF) was set up through Discretionary Support to provide non-repayable grants to cover living expenses where financial difficulty occurs during the 5-week wait. 

• But there have been problems with uptake and knowledge/awareness about this Fund partly due to the opaque name of the fund. Cliff Edge Coalition acknowledges and welcomes the commitment to change the Fund’s name to “Universal Credit: New Claims Payment” but are disappointed that this has not yet been actioned despite the Independent Review on Discretionary Support making this recommendation in January 2022. A survey respondent to the Review said:

“They didn’t make me aware of it… I think they should. They should say you can get this help. Listen, all they told me was that I can get a grant that I have to pay off… That was me nearly crying because I thought by the time I’m going to get some money from Universal Credit, I would have to pay it back… So what am I going to live on? That puts you under more stress even. They never mentioned to me that you can get something like I got here [from DS].”

• The Department for Communities should urgently communicate the availability of the Universal Credit New Claims Payment (previously UCCF). It should be offered as a default option for new claimants to UC.

• The UCCF budget comes from the Discretionary Support Fund which is vulnerable to cuts. This means that if a claimant receives support from the UCCF they are not eligible for any living expenses grant. There was unanimous agreement from Advice workers and DS Operational Staff that this is unfair. Cliff Edge endorses the recommendation made by the Independent Review of Discretionary Support which pushes for the UCCF to be removed from Discretionary Support and instead located either with other mitigation measures or directly within UC.

DS operational staff: “it’s unfair when you get the UCCF that it negates the DS living expenses award and it shouldn’t be like that. It should be separate and they should still be entitled to another grant following receipt of UCCF. It totally disadvantages people… The main problem is that it’s being classed as their DS grant for the year.”

What needs to change?

• The Cliff Edge Coalition endorses the recommendations made by the Independent Advisory Panel that reviewed the Welfare Reform Mitigations in 2022.

• The budget for UCCF needs to be increased to support more of those migrating to UC and to prevent them from falling into deeper poverty.

• The guidance should be amended to enable payments to be more readily made under the Fund.

• The Fund’s name should be changed urgently to “Universal Credit: New Claims Payment”.

• There should be more active and wider promotion of the Fund by the Department for Communities – the existence of this payment should be made clear upon a UC application with an explanation that it could help claimants avoid the need for a loan (Advance Payment). 

The Cliff Edge Coalition also recognises the need to convene a working group to examine a number of alternative solutions to the UC 5-week wait, with input from those with lived experience and the advice sector.

The Cliff Edge Coalition is made up of over 100 organisations from across Northern Ireland which came together in 2018 to campaign to sustain and strengthen crucial welfare reform mitigations. These mitigations were first agreed by the Northern Ireland Executive in 2016 and were designed to alleviate some of the harshest impacts of the Westminster welfare reform agenda. As the mitigations were only due to run until April 2020, the impending ‘cliff edge’ meant that many households in Northern Ireland would abruptly lose vital support. The Cliff Edge Coalition continue to campaign for Welfare Reform Mitigations to be strengthened.

Watch a video about our #1 ask – Resolve the UC 5-week wait