The new system means that the young people supported by Depaul UK have to wait at least five weeks for their first Universal Credit standard allowance payment. During this time they often have to choose between having no money whatsoever, and taking on debt which would leave them unable to meet their basic living costs for months to come.
Depaul UK’s Policy and Public Affairs Manager Daniel Dumoulin said: “Universal Credit should be making it easier for young people with whom we work to get back on their feet, but instead it is trapping them in debt or leaving them with no money at all.
“The Government should urgently address these fixable problems by changing Universal Credit so that young people have to wait less time for their first payment.”
Depaul UK warns in the briefing that the current system may lead young people to engage in risky behaviours such as crime, begging or harmful relationships in order to survive.
At present, someone who applies for Universal Credit must wait at least five weeks to receive their first standard allowance payment, designed to support non-housing basic living costs such as food, energy bills and transport.
Although claimants can request a budgeting advance loan from the Department for Work and Pensions, this must be paid back from future Universal Credit payments which have been capped at £58 for people under-25 since 2016.
It is challenging for people to live on £58 a week, and there is no slack from which to repay debt while meeting essential living costs.
One young person supported by Depaul UK budgeted just £12 a week for food while in receipt of Universal Credit.
George, 20, said: “Trying to live off £58 per week is unbearable, trying to live off less than that to repay a loan would be impossible, at least without getting into more debt or going hungry. It would also lead to isolation and depression. As a country we should empower not embarrass young people.”
Depaul UK recommends in the briefing that the Government reduce the waiting time for Universal Credit payments to two weeks. This would mean funding three additional weeks of Universal Credit payments, equating to a cost of around £175 per new claimant aged under 25.
The total cost of this measure would be far less than the billions of pounds of savings generated each year by the Government’s benefits freeze. Depaul UK believes that the Government should reinvest some of these savings to ensure that we have a functioning safety net for young people.