Juliette Flach, CAP’s Policy and Public Affairs Manager, dives into the realities of the problematic policy — the five-week wait for Universal Credit.
I am often asked, ‘if CAP led the government for the day, what policy change would you make?’ The five-week wait is definitely one of the policies we would love to address. The five-week wait is the period new Universal Credit claimants must wait for their first payment.
The logic of the policy seems flawed. If someone is entitled to Universal Credit, there is a recognition that they need more financial support. Without this vital social security support, their financial situation will look precarious.
Going into the 5‑week wait with already spiralling debt
The application process itself can be hard to navigate and requires time, computer literacy and the ability to collate all the information required. There are charities that can help for those who are digitally excluded or who are not able to apply independently. But support may require travel expense to get to, or only available on an appointment basis–leading to further costs and delays even before this five-week period starts.
To make matters worse, people may be only applying for Universal Credit when their financial situation already looks dire. For example, when someone loses a job, they may first focus on finding a new one. If they have savings, they may be relying on these, but as highlighted in our recent report, Drowning in debt without a saving buffer, many are pulled into debt. If they don’t manage to get another job quickly, then by the time they start to apply for Universal Credit, they have already burnt through any financial buffer they may have had, or faced mounting debts. People are left to survive the five weeks without a safety net.
1 in 10
people have no cash savings at all
21%
have less than £1,000 to draw on in an emergency
Financial Conduct Authority (FCA): Financial Lives May 2024 survey
The harm of the five-week wait
Essential expenditures don’t pause for five weeks, people still need to eat and pay their rent, yet the system is built in a way that means they are forced to navigate five weeks without the financial income from Universal Credit to pay for essential outgoings.
There is a scheme called an ‘Advance Payment’ which someone can apply for to cover this five-week period. But, what is not always successfully communicated is that this is a loan, a form of ‘debt’. The advance will still need to be repaid and this is usually done through deductions from future Universal Credit payments. This is not just a one-off deduction; it usually happens over 24 months (two years), so people have years without receiving the full entitlement. So, although there may be financial support over this five-week period, this will reduce the already small income someone will receive when their Universal Credit payments start.
Although it is positive that the maximum percentage that can be deducted from someone’s Universal Credit standard allowance recently changed from 25% to 15%, 15% less per month can still have a significant difference. As highlighted by the work of the Guarantee our Essentials campaign (which CAP is part of), even in full, the income from Universal Credit is not high enough for people to afford essentials.
As one of our past clients shared with the Minister for Social Security and Disability, Sir Stephen Timms during his recent visit to CAP’s Central Support Hub, the delay in receiving the support and the deductions to pay back the advance payment perpetuated her spiralling debt situation. The policy had a detrimental personal impact, forcing her into an impossible situation where her finances became unmanageable and she was trapped with debts racking up and having to go without.
And the final blow is that the five-week wait is the minimum delay people face. The reality can be longer. At a minimum, the delay is a full calendar month plus seven days, and this is assuming all goes smoothly. We have spoken to clients who have been wrongly accused of fraud or caught in administrative issues, who have faced further delays in receiving this support.
People’s autonomy and control of their finances is taken away as they have to wait until the ‘system’ enables them to access the vital support they need. People are forced to go without and see their debt rack up until their Universal Credit payment comes in.
So, for those who do have the power to make change, at CAP, we encourage you to acknowledge the pain caused by the five-week wait and address this problematic policy.
