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Building a social security system that is fit for purpose

by Debbie Horne, CAS Social Justice policy officer.

This article first appeared in the Herald on 22 July 2020.

In recent weeks, my Citizens Advice Scotland colleagues have been setting out how, through decent employment and quality housing, government can put people at the heart of the recovery from COVID19.  

We believe that central to the recovery must be a guarantee that people have enough income to enable them to live with dignity and to participate in society.

Today,  I’ll look at the vital role of social security payments in supporting people through the recovery.  

We believe in a principle, almost universally shared, that no one should live in poverty; and that all people are entitled to food, warmth and shelter. The social security system should exist to prevent destitution and debt, but we believe it should also go further, with social security being paid at an adequate level to ensure a decent standard of living.

Every day, Citizens Advice Bureaux across Scotland advise people who struggle to live on the low income they have, either solely through benefit payments or combined benefits and wages. Look wider and the statistics paint the picture that our CAB advisers see every day: 1 in 5 people in the UK live in poverty, and almost 60% of those people are in work.

In the UK, the main working-age benefit is Universal Credit. Since the distant days of the early pandemic, over three million people have had to claim Universal Credit. The Department of Work and Pensions has made a huge effort to respond to this demand, which has resulted in most people receiving their first payment on time.

Even so, all of these new applicants would have been subject to five weeks of waiting before receiving a payment. The only option for any source of income during this period is an advance payment, effectively a loan repaid through deductions of your future payments. Over one million people have had to claim an advance payment since March, which creates debt when what they need is an income. The 81% surge in the number of people using foodbanks - reported recently by the Trussell Trust - demonstrates what the five week wait for a Universal Credit payment means in reality. 

That’s before we get to the people who aren’t even eligible for any Universal Credit.

The majority of students, for example, are not entitled to Universal Credit; this compounding the financial hardship of a demographic that populates the workforce of the hospitality, tourism and retail sectors. And those with No Recourse to Public Funds are completely excluded from financial support under Universal Credit - a point made directly to the Prime Minister recently when he appeared in front of the House of Commons Liaison Committee.

We need to rebuild the safety net in a way that fixes the current gaps many people fall right through.

The sudden mass income shock that COVID19 created has also meant that many people have claimed social security, predominantly Universal Credit, for the first time.

Issues with social security are one of the main reasons people come to their local CAB. Throughout the pandemic, the CAB network has been there for people, ready to provide free, independent and confidential advice services that are crucial to helping them navigate the complex social security system and access everything they are entitled to. Our footprint in communities across Scotland has shown us now more than ever that changes are needed to strengthen that safety net.

Building back better means doing things differently and being open to change.

Firstly, the five week wait for Universal Credit must end. The Government could do this by introducing a payment that does not need to be paid back during the waiting period.

Realistically, given the amount of low-paid work in our economy, it is also essential that social security helps those on low wages.

Many of the key workers whom we’ve relied upon during the pandemic - particularly those in social care - are paid at an insufficient level that means they have to claim benefits to top-up their wage. We’ve previously called on the UK Government to introduce a Work Allowance for everyone claiming Universal Credit and to reduce the taper rate to allow low-paid workers to keep more of what they do earn.

However, broader than this, we need to start a real conversation about what is an adequate amount of money to live on in 2020, and the role of social security in providing this swiftly and with dignity. This needs to happen quickly and the conversation must be followed by action – through higher wages and increased social security payments. The £20 a week increase to Universal Credit, introduced in response to the pandemic for this financial year, should only be the start of change.

We don’t believe it is radical to prevent poverty by strengthening our social security system and creating a true safety net. In fact, it’s a way of building a real post-COVID19 legacy.