Last month we took a more in depth look at universal credit (UC). The scheme which looks to oust existing benefits was set for an initial winter rollout. With pressure from her own MPs however, Theresa May now has to decide whether to stay put or roll it back.
Risk Management
The reason for the current opposition is in regards to timing. Intending to make benefits and payments much simpler, there are positives to UC, but more work is still needed.
What many were worried about was the planned switchover during an already tight financial period. Christmas can be a difficult time for families. Managing credit and income to still have an enjoyable time is not easy.
It has already had negative effects on some trialling UC. Some reports suggest it to be a key factor in rent arrears for those trialling it. While the government believes they are close to getting the balance right, MPs are asking for more time.
Teething Problems
With issues ranging from payments arriving 6 weeks late to people being denied rooms because of the scheme, changes are needed before it is widely available.
The group of MPs asking for a pause,
led by Heidi Allen, are championing advance payments rather than loans on the current scheme.
This would eliminate some strain of waiting to pay rent or other debts.
The same group has also asked to
remove the charge for calling the UC helpline.
* This concession on call costs has now been made by the government,
with a promise that calls to the UC hotline will be free within a month.
The government has yet to give an official response to the movement but with pressure mounting, could it be a matter of time until we get the pause many want?
Best for both
With a pause in the rollout, creditors and debtors would have adequate breathing space to balance finances. Debtors would have more time to plan and resolve existing debts. Creditors adversely will benefit from the potential of more regular payment, rather than going unpaid for longer due to lack of funds for debtors. When it comes to monthly payments like rent, this can make all the difference. Having a grace period around Christmas could greatly benefit both sides.
Forcing a rollout and creating a bigger gap in existing consumer debt could spell numerous problems. While the idea behind UC is positive, it seems appropriate to tweak current plans while there is still time.
For more information on our work with both debtors and creditors take a look at our service pages including consumer debt collection and mediation. Follow our blog for more on the universal credit situation as it happens.