[JD6]

I have just watched the 3 part BBC series Universal Credit: Inside the Welfare State. It was a very well produced series and gave what appeared to be a balanced view.

I found one aspect of Universal Credit to be completely bizarre though - the ability to borrow a large sum upfront. In episode 3, filmed in Bolton, a couple came in to apply for an advance since their regular monthly payment would start in 5 weeks. They were pretty basic - with an intellect perhaps equivalent to an average 8 year old, but they were offered an immediate advance of up to £1,261. They could choose to take less.

Unsurprisingly they took the whole sum (I imagine that most do) - the claimant explained that she needed the full amount as she had to buy her daughter a school uniform. Predictably they went out and spent it all on phones, trainers, cigarettes etc. as they felt they deserved to ‘treat themselves’. A week later they’re back asking for another advance - this time they are given five hundred and something.

When they eventually get their first Universal Credit payment, they are really upset at how small it is, since some of their advance is taken off, as well as debts from before. It appeared to me that the system, in offering them around £1,800, had allowed them to dig themselves into a hole completely unnecessarily. They had to give them something to live on, but that sort of sum is asking for trouble. It might work if you were dealing with claimants with real financial discipline, but I imagine that’s the minority. I’m not surprised that there is an increase in food bank use as Universal Credit seems to create debts.

[mikeoz]

Only watched the first episode but my wife works in the Ministry involved. Whole thing is a bit of a mess. The 5 week wait is the issue. Was 6 originally. Lots of bad press and MPs getting involved made them do the emergency loans which are now the norm. But the 5 week wait is a stupid idea to start with hence the loans. Also the IT is so old and spread across numerous systems they massively underestimated the job to bring it all under 1 system. The basic idea is a good one however.

[Lincoln61]

I don't have an issue with the concept, but the loans should be ended, as should all payday type loans. I understand that many people struggle, but people need to learn to live within their means.

I want an M8, but I can't afford one......I'm sure I could pull the money together if I tried, but I still can't afford one!

[Kal101]

Originally Posted by Lincoln61

I don't have an issue with the concept, but the loans should be ended, as should all payday type loans. I understand that many people struggle, but people need to learn to live within their means.

I want an M8, but I can't afford one......I'm sure I could pull the money together if I tried, but I still can't afford one!

Trouble is there’s a lot of people on beer money wanting a champagne lifestyle.

Plus they’re used to some one else ie the state picking up the tab and as such have very little concept of personal liability.

[JD6]

Originally Posted by mikeoz

Only watched the first episode but my wife works in the Ministry involved. Whole thing is a bit of a mess. The 5 week wait is the issue. Was 6 originally. Lots of bad press and MPs getting involved made them do the emergency loans which are now the norm. But the 5 week wait is a stupid idea to start with hence the loans. Also the IT is so old and spread across numerous systems they massively underestimated the job to bring it all under 1 system. The basic idea is a good one however.

I agree that the basis of Universal Credit sounds sensible, particularly that you can do some work and always be better off. The 5 week wait makes no sense though, as you say. Using loans to fill the gap really is asking for trouble.

While I understand the motivation, I’m not convinced that a single monthly payment is workable for many of the claimants, particularly as they are trusted to pay their rent out of it and not spend it. The whole system is an incredibly difficult thing to get right.

[isleaiw1]

Originally Posted by JD6

I agree that the basis of Universal Credit sounds sensible, particularly that you can do some work and always be better off. The 5 week wait makes no sense though, as you say. Using loans to fill the gap really is asking for trouble.

While I understand the motivation, I’m not convinced that a single monthly payment is workable for many of the claimants, particularly as they are trusted to pay their rent out of it and not spend it. The whole system is an incredibly difficult thing to get right.

Well when they get off benefits and get a job, they might have a 5 week wait (possibly 6) and will have to manage on a single monthly payment. The logic is sensible, get them prepared for work, the reality is some education and help is needed...

[JD6]

Originally Posted by isleaiw1

Well when they get off benefits and get a job, they might have a 5 week wait (possibly 6) and will have to manage on a single monthly payment. The logic is sensible, get them prepared for work, the reality is some education and help is needed...

I get why a 5 week wait seemed like a good idea when UC was being designed, but if it requires them to take a large loan, that seems like a recipe for failure. It’s probably reasonable to assume that a fair proportion those applying for UC are not good with money, so handing them a 4 figure sum and expecting them to use it wisely isn’t a great idea.

Perhaps jobs under a certain income threshold should be obliged to have an option of weekly pay, to take away the need for a 5 week wait for both the benefit and the job.

[Vasumir]

Originally Posted by Lincoln61

I don't have an issue with the concept, but the loans should be ended, as should all payday type loans. I understand that many people struggle, but people need to learn to live within their means.

I want an M8, but I can't afford one......I'm sure I could pull the money together if I tried, but I still can't afford one!

Completely agree with you. I've long said pay day loan companies should be completely banned. The only reason people go there is because they've been so bad with money previously that it's the only place willing to give them anything. At the ridiculous apr's that surely only puts them into more debt.

It's effectively taking advantage of vulnerable people.

[Wills2]

It's a load of nonsense, if someone qualifies for benefits and the gov is changing the payment method/process to universal credit why is there a gap of 5 weeks between the old and the new? Just change it over, giving people £1800 upfront to cover the gap and then expecting them to pay it back is a recipe for mayhem.

They have no money in the first place where the hell do they think they will get the £1800 from to pay them back?

[mikeoz]

The other issue with UC is they now give the rent payments to the claimant instead of the Landlord. The idea is they they learn to budget....obviously they spend it and the Landlord is left out of pocket...

[Marksw76]

Yes, and no doubt the extra paperwork relating to the loan is providing yet another un necessary job for an (overpaid) pen pusher within the public sector. Absolute joke.

[Lynxi2k]

Originally Posted by Lincoln61

I don't have an issue with the concept, but the loans should be ended, as should all payday type loans. I understand that many people struggle, but people need to learn to live within their means.

I want an M8, but I can't afford one......I'm sure I could pull the money together if I tried, but I still can't afford one!

You comment would suggest you do not understand how people struggle. Every system is open to abuse and will be abused, that goes for rich or poor, think Tax avoidance.

As someone who grew up in household that relied on the welfare system, I can tell you it is extremely easy to rack up lots of debt when living is beyond your means. The majority of cases aren't people racking up debt on **** and trainers, but clothes food and a roof for their kids to live under. Imagine how you would feel about loans/credit cards etc. If you replace the M8 in your scenario with keeping your kids alive and trying to not let them know they are living on the poverty line. That might change your view on living within your means, as the life afforded within your means could likely mean bedsits, poor diets for kids, and can lead to homelessness and no access to education.

Agreed the current system is a mess, and where the system can be abused, it will be in regard to short term loans. There is a real need for a welfare system, it not just about people spending your tax money on **** and booze. that attitude does not help people who really need help, and creates a huge stigma attached to claiming welfare.

[mikeoz]

Originally Posted by Lynxi2k

You comment would suggest you do not understand how people struggle. Every system is open to abuse and will be abused, that goes for rich or poor, think Tax avoidance.

As someone who grew up in household that relied on the welfare system, I can tell you it is extremely easy to rack up lots of debt when living is beyond your means. The majority of cases aren't people racking up debt on **** and trainers, but clothes food and a roof for their kids to live under. Imagine how you would feel about loans/credit cards etc. If you replace the M8 in your scenario with keeping your kids alive and trying to not let them know they are living on the poverty line. That might change your view on living within your means, as the life afforded within your means could likely mean bedsits, poor diets for kids, and can lead to homelessness and no access to education.

Agreed the current system is a mess, and where the system can be abused, it will be in regard to short term loans. There is a real need for a welfare system, it not just about people spending your tax money on **** and booze. that attitude does not help people who really need help, and creates a huge stigma attached to claiming welfare.

I think you are correct in what you say but in Lincolns defence the programme (as they always do) focuses on family's that dont do as your own family did. They choose to spend it on crap rather than real needs. Unfortunately family's that are managing better dont make good TV and the current loan system does not help those that are not managing better. People that have not experienced what you your self has can only comment on what the media are showing at a given time really.

[Lynxi2k]

Originally Posted by mikeoz

I think you are correct in what you say but in Lincolns defence the programme (as they always do) focuses on family's that dont do as your own family did. They choose to spend it on crap rather than real needs. Unfortunately family's that are managing better dont make good TV and the current loan system does not help those that are not managing better. People that have not experienced what you your self has can only comment on what the media are showing at a given time really.

Had the comment been directed at the couple in question, then fine. But it was about all payday type loans and assuming people only use them because they can't live within their means.

Payday loans pray on the most vulnerable disguised as help, and often serve to make more problems than they serve.

I think a little more compassion and a lot less condescension would go a long way.

I hope my comments have added some balance to the programme, which I have not watched, which seem to exaggerate stereotypes of those who use our welfare system.

[mikeoz]

Originally Posted by Lynxi2k

Had the comment been directed at the couple in question, then fine. But it was about all payday type loans and assuming people only use them because they can't live within their means.

Payday loans pray on the most vulnerable disguised as help, and often serve to make more problems than they serve.

I think a little more compassion and a lot less condescension would go a long way.

I hope my comments have added some balance to the programme, which I have not watched, which seem to exaggerate stereotypes of those who use our welfare system.

Agree on the payday loan. Needs to be much better regulated imo.