Universal Credit Payment Delays Adding to Debt Woes Nationwide

February 9, 2017

Issues with the UK government’s Universal Credit (UC) benefits system are causing significant debt and housing problems among thousands of individuals and families throughout the country.

The system is being introduced in an apparent effort to simplify and streamline the country’s benefits infrastructure but many people are reportedly being left without money they urgently need.

In fact, the Guardian newspaper claims to have established that eight in 10 social housing tenants around the country who claim UC have either added to or fallen into rent arrears since they came to rely on the new system.

A particular problem with the new setup is understood to be that claimants of UC are obliged to wait for a period of at least six weeks before they receive any associated payments.

For many people, this period without receiving payments has proven to be very challenging indeed from a financial and wellbeing perspective, with growing numbers apparently resorting to debt wherever they can access it and food banks when they’ve run out of other options.

Some people have reportedly been forced to wait as long as 60 days before receiving their first UC payments.

Issues around the effective distribution of UC payments is believed the have had the knock on effect of making private landlords less willing to accept people who claim benefits as tenants.

The National Federation of Almos (NFA), which represents various groups responsible for council housing, has said that the introduction of the UC system is pushing more and more people into debt.

“We believe the current unacceptable waiting times and errors in processing claims are causing significant financial hardship to our tenants and communities,” said Hugh Broadbent, NFA chair in a recent statement.

“The delay in claimants receiving benefit inevitably forces households to turn to other ways to survive, including family and friends, payday lenders and as a last resort loan sharks. The repayment of extortionate interest only further exacerbates a tenant’s ability to pay their rent.”

If you live in Scotland and you are struggling to cope with a worsening debt management situation then Scotland Debt Solutions can help. You can arrange a free and confidential consultation with one of our experts today.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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