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Fears Universal Credit Will Leave Tenants In The Midlands Struggling

By Leek Post and Times  |  Posted: May 31, 2014

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There are fresh concerns that people on low incomes will struggle to access the digital service for Universal Credit, according to new research from the National Housing Federation.

According to new survey of working age social housing tenants affected by the welfare reforms conducted by Ipsos MORI:

· Over a third (36%) affected by welfare reforms don’t have internet access, with nearly half 47% say they would not be confident making a benefit application online3

· More than nine in ten (93%) would prefer benefits to be paid direct to landlord rather than their own accounts2

· Over half (60%) of those who manage money on a short term basis are not confident budgeting monthly5

Universal Credit, which is due to be rolled out nationally by 2017, replaces six existing welfare benefits, including housing benefit, with a single, monthly household payment. People applying for benefits will have to apply via a new online service.

The new Ipsos MORI survey1 found that over a third (36%) do not have access to the internet and of those who do, nearly half (47%) admitted they wouldn’t be confident making a benefit application online (equivalent to 30% of all respondents).

At present, the majority of housing association residents receiving housing benefit choose to have it paid direct to their landlord rather than their bank accounts. But this choice will be removed under Universal Credit, despite more than nine in ten (93%)2 residents saying this is what they would prefer.

The switch to paying housing costs direct to tenants could end up with many families, already struggling to cope on tight budgets, falling behind with their rent. Seven in ten (72%)4 currently manage their money on a short term basis with well over half of this group (60%)5 fearing they wouldn’t be able to make the switch to budgeting monthly.

National Housing Federation chief executive David Orr said:

“We support the aims of Universal Credit to simplify the system and make work pay. We are concerned that the transition to the new system will put many tenants at risk.

“An overwhelming majority of tenants want to have the choice to have their housing costs paid to their landlord and a large proportion are faced with the additional challenge of not having access to the internet. For people living with financial stress every day, this rational choice secures your home and reduces the stress.

“With half of these people likely to struggle with monthly budgeting, there is a risk that without the right support, many could end up unable to pay for essentials and fall behind on their rent.

“If you are living on a low income, there is a huge difference between budgeting weekly and monthly. The consequences of running out of money for several days at the end of a month are much more severe than running short for a day at the end of the week.”

The survey also found that only a tenth (12%)6 know about the changes.

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