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For all the comparisons of our predicament with war, there is no military to draft people into, no war effort to support through production, no infrastructure that suddenly needs building. Instead, most of us are to play our part by staying home. Hence, entire sectors of our service-driven economy have shut down, with millions facing unemployment and no opportunity to find an alternative job. They are now finding themselves turning to our safety net and claiming Universal Credit.

It is hugely welcome that the Government has acted and strengthened welfare provision by increasing the standard allowance of Universal Credit by a £1,000 for the next 12 months, by removing the minimum income floor for self-employed, and by increasing the housing element of Universal Credit. This will be of significant help to both existing claimants, and those who will soon be claiming it. But there is one more thing that the Government should address: the five-week wait.

Research, including our own, has shown that most claimants struggle with having to wait five weeks for their first payment. Many on low incomes have no savings and have to turn to their friends and family to get through this period, while others rely on assistance through foodbanks or even on short-term loans.

To help with this period, the Government has begun to offer advance payments, which need to be repaid, to those who request them. With these, a payment up to the size of their first award is made at the start of the five-week wait.  A majority of claimants take this up, but it is not universal, with some claimants not even aware of this option, while others are potentially concerned about having to repay their advance.

To repay, claimants are faced with deductions from their payments for many months afterwards. Considering the size of Universal Credit awards, such deductions cause significant financial issues for households in the long run, as their cash flow is reduced for many months. While the 2020 Budget has reduced the maximum possible deduction to 25% of the award and lengthened the period of payment to 24 months, this will only come to force in October 2021 and is not enough in the given circumstances.

The Government is seeking to help the cash flow of businesses, but it also urgently needs to do so for individuals newly out of work. It needs to encourage uptake of advance payments, and in the same way the Government has given businesses and individuals holidays on business rates mortgages, the Government should suspend all deductions for the repayments of advance payments from Universal Credit awards. This should be in place for the foreseeable future, and at the very least until current advice on social distancing ends.

Suspending deductions should apply to both new and existing claimants, to ensure that all claimants who now have to claim Universal Credit can take full advantage of the advance without being concerned about their finances in the months that follow, while also helping 1.3 million Universal Credit claimants who are currently dealing with deductions, primarily due to requesting an advance in the past.

While the increases in generosity of payment will be of substantial and significant help, it is also vital that claiming and managing on Universal Credit is made less painful while the crisis unfolds. Encouraging the uptake of advance payments and suspending repayments for them will allow the Government to support the cash flow of those who are out of work and these changes can be enacted at pace.

Anvar is Senior Researcher at Bright Blue. [Image: J J Ellison]