Universal credit: Labour pledges to scrap welfare scheme

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Jeremy Corbyn will say the welfare scheme has been an “unmitigated disaster”

Labour leader Jeremy Corbyn is to pledge to scrap universal credit, calling the welfare scheme “inhumane”.

Universal credit is a benefit for working-age people which merges six existing benefits into one payment.

Mr Corbyn will promise an interim payment after two weeks across the UK to replace the five-week waiting period currently in place.

But the government said Labour’s plans were “reckless” and amounted to “political point-scoring”.

Universal credit, which is being introduced in stages across the UK, combines six separate benefits for working age people into one payment.

Supporters of the welfare reform say it helps to simplify the old complicated benefits system – and ensure no-one would be better off claiming benefits than working.

But it has been controversial since its introduction in 2013 and critics say it has made life harder for people receiving it.

Plus there were IT issues, massive overspends and administrative problems with the benefit.

Some women have described being forced into sex work because of the failings of the scheme, while landlords have said tenants have slipped into rent arrears since being put on universal credit.

A loophole in the online system has been exploited to make fraudulent applications and claim advance loans, with millions of pounds stolen as a result.

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Media captionJade Thomas was left hundreds of pounds out of pocket by a universal credit fraudster

Mr Corbyn will promise that a Labour government would introduce “an emergency package of reforms” including:

  • scrapping the two-child limit, whereby families only receive welfare support for the first two children of a family
  • suspending sanctions whereby a claimant’s support can be reduced if they miss appointments

His party also wants to drop the benefit cap which limits the amount of benefit a person can receive.

Mr Corbyn will make his announcement on Saturday at a rally in Chingford and Woodford Green – the Greater London parliamentary seat of Conservative MP Iain Duncan Smith, who originally implemented the universal credit scheme when he was work and pensions secretary.

The Labour leader is expected to criticise the welfare project for being “over-budget” and “inhumane”.

“Social security is supposed to give people dignity and respect, not punish and police them, make them wait five weeks for the first payment or fill out a four-page form to prove their child was born as a result of rape,” he will say.

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Officials say claimants can get paid urgently if they need it

Labour also says it would drop the system’s “digital-only” requirement, arguing that it excludes those who do not have access to the internet.

The Department for Work and Pensions says claimants can get paid urgently if they need it.

Work and Pensions Secretary Therese Coffey said: “This is totally irresponsible from Jeremy Corbyn, who now admits he would happily scrap financial support for vulnerable people with no plan as to what Labour would replace it with.”

The Joseph Rowntree Foundation said it would welcome significant reform “but any changes need to avoid further upheaval for those who depend on it”.

Food bank charity the Trussell Trust welcomed the end of the five-week wait proposed by Labour but warned that the party’s plans could create further problems.

It said that “scrapping universal credit may only result in further upheaval”.

How does universal credit work?

  • Universal credit combines six “legacy benefits” into one monthly means-tested payment. The legacy benefits are working tax credits, child tax credit, jobseeker’s allowance, income support, employment support allowance and housing benefit
  • A single universal credit payment is paid directly into the claimant’s bank account each month
  • More than 1.5m people across Great Britain currently receive benefits through universal credit

Source: House of Commons Library