Council finance chief’s warning over monthly hand-outs trial

Photo: Darren Robinson

Councillor Abdul Jabbar.

SPEND Universal Credit payments wisely, or run the risk of losing your home says Oldham Council’s finance chief Councillor Abdul Jabbar.

He was speaking as the borough became one of the country’s pilot areas for a trial of the Government’s new centralised benefits scheme.

Universal Credit — initially to be paid only to single jobseekers — is a single payment to replace Jobseekers’ Allowance, Employment and Support Allowance, Income Support, Working Tax Credit and Housing Benefit.

But Councillor Jabbar says certain elements of the way the system works will put people at risk of struggling with their debts.

Claimants will receive their money monthly rather than fortnightly, and housing benefit will no longer paid directly to landlords but instead into the bank account of the claimant.

This means someone under 25, who will usually receive £112 of Jobseekers’ Allowance every two weeks, might now receive £464 a month, depending on rent. Over 25s could receive £524 a month.

Councillor Jabbar said: “The Government’s reasoning is that if people can get used to spreading their money over four weeks rather than two, they will be more prepared for budgeting when they eventually find employment.

“Clearly this is going to create problems: people aren’t prepared for managing a higher budget over a longer period, so instead might spend it on themselves. Then they might get into arrears and risk losing their home.

“This is why Oldham opted to be one of the pilot schemes for Universal Credit — we want to make sure people are learning how to manage their budgets and making the most of the support and advice we can offer them.”

The council has created a number of personal budget services, which it hopes will show residents how to be cautious and stay on the right track.” There are also several locations with access to computers and basic IT lessons, since claims must be made online.

“We felt it was important to put some investment in now and teach people about saving so they won’t get into trouble.

“It is important to remember this is a pilot scheme at the moment — only certain people are eligible to apply, and Universal Credit is just testing the waters for a change in the way the system is run. We want to make sure it works for everyone.”