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Universal Credit: Can we Bank on it?

Since Universal Credit was rolled out in Newcastle, we’ve been collecting data and working with the Department of Work and Pensions to help improve the system for the people who are most in need, through the ‘test and learn’ process. In this series of blogs, we’ll be following the experience of one of our clients, John*, as he enrols onto the new system with the help of his Fulfilling Lives Navigator.

John has been a Fulfilling Lives client since June 2016. When John was referred to us in February 2016, he was living with his father and claiming Employment and Support Allowance (ESA). Between February and June, when he was accepted onto our programme, John’s father was admitted to hospital and John was made homeless. Because John couldn’t access his home whilst his father was in hospital, he missed a letter inviting him to attend a medical assessment and consequently missed his appointment, meaning his ESA benefits stopped.

When our Navigator first met John, he had been without any payment or support for three months. The first thing John’s Navigator did, after engaging with John, was to submit an application for Universal Credit.

One of the first problems we encountered when supporting John to access Universal Credit was bank accounts. Unlike the previous benefits system, Universal Credit cannot be paid into Post Office accounts: claimants must have a bank account to receive their entitlement. This is proving a huge challenge as our clients don’t usually have bank accounts and our experience is that it is difficult to open a bank account, especially where there is no ID available.  This sees even further delays in getting payments made on top of the existing system of monthly payments and payments in arrears.

This was the case for John. There was a delay in making the short-term payment of Universal Credit as John did not have a bank account. This payment offers a lifeline to people who have been without money for a long period, who otherwise would have to wait up to six weeks for a payment.

John’s Fulfilling Lives Navigator spent six weeks trying to open a bank account for John, but as John was currently homeless and had no ID, it was impossible. We were told that Universal Credit couldn’t be paid into someone else’s bank account either, so we had hit a brick wall.

It took a total of 60 days for a bank account to be set up for John, meaning he had no money coming in for over five months in total – three months before joining Fulfilling Lives, and then two months since – and was surviving from the food parcels we could provide through our personalisation budget and our partner organisation, Age UK Newcastle.

A year later, this barrier in the Universal Credit system is still preventing people like our clients from accessing payment as soon as possible. Job Centres are now accepting Post Office accounts for Universal Credit payments, but it has been made clear this can only be a temporary measure. In John’s case, we were able to get his first payment paid into his father’s account (after first being told this wouldn’t be possible) and have since been able to set up a bank account. John is still suffering from the knock-on effects of the delay in payments, 9 months later, and we’re working with the DWP in Newcastle Gateshead to come to a solution so other people don’t suffer in the same way.

*name changed for anonymity