The way Universal Credit has been designed is troubling, especially for couple households that will be paid a single monthly payment in one account.
The concerns over the length of time claimants wait before a first Universal Credit (UC) payment is well documented, but has tended to obscure another aspect of the new benefit system that could prove to be equally problematic and that is the ‘single monthly payment’.
There is little understanding about how such a radical change to the way the benefit is paid will mean for couples who live together, or what might be the wider impact.
All claimed benefits rolled together in one lump sum per couple has the effect of reversing the previous reform which allowed child tax credit and the childcare element of working tax credit to be paid to the main carer. Under UC, the only thing couples can do is to nominate an account to receive the payments. There are, however, some special circumstances where this can be changed such as proven cases of domestic or financial abuse.
If payment is not to a joint account, one member of the couple will receive the entire award which could include financial support for rent and childcare costs, which could be detrimental to the stability of some relationships. But even paying into a joint account can produce the same issues as there is no guarantee that the money paid to a couple will reach the individual partners and this could be a cause of trapping one partner in an abusive situation.
It can also be said that that having different sources and amounts of income coming into the household at different times can help with budgeting in low-income families, whereas a single monthly payment could increase the risk of debt and rent arrears which would undermine household financial security, and potentially aid in increasing poverty.
Including housing benefit into UC may increase the likelihood of eviction as money intended for rent could be withheld or spent in other ways by one of the partners, and although certain claimants can request that the housing element of UC is paid direct to a private landlord, both members of the couple must agree. Making these changes to the way couples access benefits and manage their household finances could destabilise relationships and deter lone parents from future relationships.
No one knows what the impact will be of such a radical upheaval in how and to whom in a household benefits are paid and distributed. The government’s piecemeal roll out means that the effects of UC on household financial distribution and relationship dynamics will not become apparent for some time. However, there is the potential to erode women’s financial independence more than under the current system, as merging six benefits into one and paying UC monthly into a single bank account could add significantly to the perceived risk of family dynamics.
Switching to a monthly payment regime could pose a significant challenge to couples struggling to stay together under conditions of economic austerity, and without a meaningful policy adjustment, for example enabling the child-related elements to be paid to the nominated lead carer or, as in Scotland, allowing joint claimants to split the UC payment equally, I would argue that the claim by Government that the Universal Credit System has been designed to promote personal independence, self-reliance and to get people back into work, may just have, in some cases, the exact opposite effect.