Universal Credit: effectiveness during coronavirus pandemic
This time is different – Universal Credit’s first recession
Universal Credit (UC) was always intended as a benefit to support the unemployed, but due to the effects of the pandemic it is now facing its first experience of a major economic downturn. In this report, Resolution Foundation evaluate how well UC is coping with the crisis, and how well families are coping on UC.
Claims for UC began to grow on 17 March 2020, the day after the Government advised people not to go to pubs or restaurants, to work from home and to avoid non-essential travel. A week later, the lockdown was announced, and UC claims ran at nine times their pre-crisis rate. The rate of claims has fallen since, but was, as of 12 May 2020, still running at twice the pre-crisis average. The number of excess new starts on UC in the first four weeks of the crisis is equivalent to the number of excess Jobseeker’s Allowance claims over the first nine months of the previous recession. Although DWP’s initial estimate of the volume of claims have not all led to a new start on UC, the number of people in receipt of UC rose by 40%, or 1.2 million, in just four weeks.
Researchers found that UC has successfully handled the exceptionally large volume of claims that this crisis has brought so far, and their recommendations aim to put it in the best position to overcome future challenges.