One third of claimants still on 'old' benefits

Thousands of people in South Tyneside are still receiving ‘legacy benefits’ as the Government aims to complete the switch to Universal Credit in two years, new figures show.

By Andrew Dowdeswell
Friday, 25th March 2022, 3:01 pm
Universal Credit figures.
Universal Credit figures.

In the South Shields Parliamentary constituency, 9,259 households were claiming Universal Credit (UC) in February after being transferred from older benefits, such as Employment Allowance, Income Support and Jobseeker’s Allowance – with an estimated 4,725 (34%) remaining on the old system, according to House of Commons library figures.

In the Jarrow constituency, 7,177 were claiming Universal Credit – with an estimated 3,911 (35%) remaining on the old system.

Debt charity StepChange said many claimants are still being pushed into hardship by having to wait more than a month for their first UC payment after migrating from older benefits.

The charity says moving to UC – which rolls six means-tested benefit payments into one monthly deposit – is challenging because new claimants must wait five weeks for their first payment, meaning some people need an advance, while others can be pushed into debt.

Ed McDonagh, StepChange senior public policy advocate, said: "Overall, UC can work to support people, but it also has features that can cause real hardship and can actually worsen people’s debt."

Nationally, 4.8 million households were claiming UC in February – 66% of the total number receiving benefits – leaving 34% on legacy benefits despite the rollout starting in 2013 and due to be complete by 2024.

In his spring statement, Mr Sunak announced £12m would be provided to reduce tax credit error and fraud – “in turn” supporting a smoother transition to UC.