Mayor of Tower Hamlets steps in to protect vulnerable residents waiting for Universal Credit

universal credit logo Rabia

  • £370,000 in rent arrears accumulated by Tower Hamlets residents on UC
  • The council to offer up to £1m over the next two years to give essential support
  • In house advice team to offer advice and support

Residents facing potentially serious hardship and poverty as a result of the roll out of Universal Credit (UC) are being offered a lifeline of advice and financial support by Tower Hamlets Council.

Universal Credit replaces a number of “legacy benefits” such as Housing Benefit, Income Support and Job Seekers Allowance in one payment. The entire claim is now administered by the Department of Work and Pensions (DWP) and not the Council.

Under the new system, UC will be paid to the recipient monthly and they are expected to pay their rent directly to landlords - rather than by the council as previously was the case under the housing benefit system.

Delays by the DWP in processing UC payments, which sometimes takes up to 12 weeks, combined with some residents not being able to claim online as they do not have the internet, have left people in financial hardship.

Tower Hamlets Homes, the council’s arm’s length housing management organization, reports that £371,796 of arrears has been accumulated by 300 of its tenants currently on UC.

At its cabinet meeting last night, Mayor John Biggs’ plans were approved plans to roll out support to residents going through the transition phase to UC. It will include financial support from the Mayor’s £5m Tackling Poverty Fund, of which over the next two years £1m will be set aside to help residents affected by UC.

Residents on low incomes who are self- employed and receiving UC will also be offered support. Those who already qualify for the Local Council Tax Reduction Scheme will also be able to access additional support to help grow their business or find alternative work.

Since the roll out of UC in Tower Hamlets on an incremental basis starting in 2013, local organisations working with UC claimants have reported increased demand from food banks and an accumulation of rent arrears.

The Council is undertaking further work with the Child Poverty Action Group and the Chartered Institute of Housing to collect information on impacts to present to the DWP.

John Biggs, Mayor of Tower Hamlets said:

“The introduction of Universal Credit is pushing Tower Hamlets families into poverty. I recently visited a foodbank in the Borough who told me they have seen a rise in people coming to them for help due to delays in Universal Credit payments.

‘’This Government policy means people are struggling to pay bills and put food on the table, which is simply not acceptable’’. 

“I believe in supporting our most vulnerable residents and that’s why I have set aside £5 million for a Tackling Poverty Fund, including £1 million to provide assistance to those affected by Universal Credit”.

The council will provide additional funding to and work in partnership with independent debt advice, employment support and other agencies to implement the new support scheme.

Residents, who due to issues such as mental health challenges, domestic violence or language barriers are more likely to find applying for UC a complex process, will be targeted to receive specialist support.

Rabia Khatun of Poplar

Rabia Khatun has been claiming Universal Credit and has had assistance from Tower Hamlets’ Homes welfare reform team.

Rabia, who  lives in Poplar in a council property  with her daughter aged 11 and son aged nine  says:

“I got help from the Universal Credit team at Tower Hamlets Homes  after falling into rent arrears.  I can usually pay all my bills on time but I was finding it hard to manage my money. 

“Mohammed in the team was brilliant and once I had sorted out my rent arrears he helped me to work out a repayment plan that I could afford.. Universal Credit is paid monthly and there’s a six week waiting time before you get your first payment.  This means that you could have bills coming in but no money to pay them which is stressful.

“Mohammed dealt with the whole process for me.  He was friendly, stopped me from worrying and was only ever a phone call away.  It really makes a difference to get practical help like a breakdown on what to budget for monthly.

“Not having to worry as much about money means I can get on with the important things in life like getting my qualification as a sports instructor. This kind of support is essential in a stressful period.

Posted on Friday 1st December 2017