Welfare minister says no plans to reduce five-week wait or to turn advance payments into grants

This article is more than 4 months old

This article is more than 4 months old

Ministers and MPs have clashed over universal credit payments during the coronavirus outbreak after it emerged there were no plans to reduce the five-week waiting time or to turn advance payments into grants.

The welfare delivery minister Will Quince said administrative costs meant “it wasn’t even really considered as an option” to change the benefits structure or to turn the loans given to bridge the five-week wait into grants.

Giving evidence to the work and pensions select committee on Thursday, Quince said: “Even if we were able to secure the £2.2bn a year that would be required to do that, it is not operationally deliverable.

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“And that is the biggest reason, amongst many, many others, why it wasn’t even really considered as an option.

“We looked at the way of what can we operationally deliver, what can we get over the line, and how can we get money to the most vulnerable people in our society.”

Neil Couling, from the Department for Work and Pensions, said recovering advances from people was already built into the computer system and would need “human beings” to staff such a significant change, which would have a knock-on effect in terms of people being paid on time.

The Labour MP Neil Coyle accused the government of taking a “computer says no” attitude.

He said the government’s focus on automation meant that up to 500,000 people who had requested advance payments would suffer the same problems the committee had been hearing about for years.

“Higher food-bank use, prostitution, sex work in some cases, homelessness and even premature deaths of some of the people who will be forced into destitution as a result of not being able to pay back this money,” he said.

However, Quince criticised Labour’s previous welfare system and said universal credit – which rolls six benefits into one – was working well and paying 93% of claimants on time despite demand being 10 times higher than normal at some points in the outbreak.

In the six weeks up to 12 April, 1.5 million people applied for universal credit, and around 560,000 people have had advance payments processed since 16 March.

Quince said: “If we had the legacy benefit system, you would rightly be saying to me: ‘Why aren’t people getting paid? Why are there long queues outside jobcentres that are half closed because people can’t get the forms they need to make a claim?’ We have an online system. Thank heavens we do because it’s working incredibly well.”

The Labour MP Stephen McCabe suggested the department should consider deferring the loan repayments for the duration of the coronavirus crisis.

Quick guide UK government support for workers and businesses during the coronavirus crisis Show Hide Income subsidies Direct cash grants for self-employed people, worth 80% of average profits, up to £2,500 a month. There are similar wage subsidies for employees. Loan guarantees for business Government to back £330bn of loans to support businesses through a Bank of England scheme for big firms. There are loans of up to £5m with no interest for six months for smaller companies. Business rates Taxes levied on commercial premises will be abolished this year for all retailers, leisure outlets and hospitality sector firms. Cash grants Britain’s smallest 700,000 businesses eligible for cash grants of £10,000. Small retailers, leisure and hospitality firms can get bigger grants of £25,000. Benefits Government to increase value of universal credit and tax credits by £1,000 a year, as well as widening eligibility for these benefits. Sick pay Statutory sick pay to be made available from day one, rather than day four, of absence from work, although ministers have been criticised for not increasing the level of sick pay above £94.25 a week. Small firms can claim for state refunds on sick pay bills. Other Local authorities to get a £500m hardship fund to provide people with council tax payment relief. Mortgage and rental holidays available for up to three months.

The committee heard that self-employed people with savings of £16,000 would be eligible to claim for universal credit if they could show a portion of that money had been kept aside for paying future tax bills.

Money saved for tax would be classed as a business asset from now on and would not count as disposable income in a universal credit assessment, Quince said.

People who have saved for house deposits and weddings have complained that they are being forced to use this money and do not qualify for any government assistance.

The minister said the principle remained that those with £16,000 should be using it.

“The fundamental principle is … the state is there to support those who need it and if you have over £16,000 in savings you should be using that money to support yourself in difficult times,” he said.