Scrap the £20pw Universal Credit ‘uplift.” (Short Version) Yes I am being serious!!

The £20 per week uplift to Universal Credit from April 2020 directly places one million more men, women and children in poverty and at acute risk of homelessness! That can’t be right can it? Yes it is and here I say why.

I am not being sensationalist or contrarian I am detailing why the £20 per week uplift does more harm than good to those it aims to help and its continuation should not take place UNLESS the overall benefit cap policy is scrapped.

By August 2020, the latest Overall Benefit Cap (OBC) figures released, a further new 90,000 households had their welfare income deducted by the overall benefit cap policy with the average OBC-capped household size is 3.62 persons per household so once 276,243 households are capped and 200,000 more than before the £1,040 per year UC uplift began it means one million more men, women and children are directly placed in real poverty by the pernicious overall benefit cap policy.

It is 7 February 2021 and more than 5 months after the latest official data of end of August 2020 and I maintain that a further 150,000 households will be capped making 318,000 households in total caped and they are cautious figures unfortunately, and for reasons I now explain.

The way the OBC operates is £20 more per week in other benefits means the maximum amount of housing benefit receivable reduces by £20 per week. The policy is zero-sum and deliberately reduces housing benefits as its first point of call and is thus designed to create eviction and homelessness in the offensive way it operates.

The 90,000+ new households capped and having their monthly benefit income reduced by £274 and £3,288 per year is in one way very surprising.

  1. IF the household previously worked for 12 months before losing their job which is common in this pandemic then they are OBC exempt for a 9-month grace period.
  2. IF the household contains an adult or child in receipt of ESA / UCLCW (incapacity) or DLA / PIP (disability) benefits they are also OBC exempt.
  3. IF the household has an adult working 16 hours per week at national minimum wage they are also OBC exempt

The 90,000+ increase in households capped means that none of the above three points was present is the surprising issue.

An unknown number as yet will have had this 9-month grace period and so will not have been OBC capped. It means those households who lost their jobs before end of April 2020 are now outside this 9-month grace period and will be capped. I suspect at least 2 households will have ‘enjoyed’ this grace period to every household that didn’t and probably more yet this means a further 45,000 per month will have been capped in September, October, November, December and January adding a cautiously estimated 225,000 new households added to those OBC-capped since the end of the latest data – a figure that would be a total of 393,394 renting households capped by end of January 2021 seeing the OBC policy directly place 1.42 million men, women and children in poverty and at acute risk of eviction and homelessness due to the OBC directly and firstly targeting housing benefits.

The OBC policy is the problem due to its zero sum nature and the fact it’s cap or limit is 42% lower in real terms (24% in London) than when it began its national rollout in October 2013. Then it was £26,000 per year and now it is £23,000 in London and £20,000 er year in the rest of the UK.

IF the OBC cap had been index-linked (CPI) the cap limit would be £28,423 per year today and would increase to £28,566 in April 2021 – UNLESS the OBC cap is increased to £28,566 per year from April there is no point in continuing with the £20 per week UC uplift in simple yet offensive terms. The other option is to scrap the OBC policy altogether yet both these only options are highly unlikely.

For now and in conclusion I am just putting the figures out there as we have the usual hyperbole from the usual sources saying the £20 per week Universal Credit uplift must continue and must and can only be a good thing. The figures above reveal this not to be the case at all and only reveal the superficiality and abject moralism that so many give to the reality of benefit issues and how they affect low income households and how such advocates either conveniently or ignorantly miss out the facts. Nothing new there then!

When new OBC data emerges I will detail how the policy means that in 2021 it is a case of no job no home and how every social not just private landlord will be operating No DSS practices as standard as this is what the policy has always meant and the pandemic and recession has hastened this on.