Welcome reforms to universal credit – but more needed to make it work for homeless young people

This followed a visit from the Minister to one of Centrepoint’s south London services in December 2018, where she heard first-hand the impact of the new benefits system on young people in supported accommodation.

For Centrepoint, the speech signifies an important recognition by the Government that many features of the new benefits system simply have not been working for homeless young people.

A step in the right direction...

Plans to kick off the migration of millions of existing benefit claimants to Universal Credit this year are also to be delayed to allow for an initial pilot of 10,000 people. Homelessness charities were instrumental in forcing this government rethink, but there is still much work to be done. Read our joint briefing for further information and please get in touch with your MP to ensure no one into homelessness as a result of being moved to Universal Credit. You can find out how to contact them here.

Other changes announced include making it easier to access more regular Universal Credit payments and the creation of a private landlord portal – making it much easier for tenants in the private rented sector to have their rent paid directly to a landlord. This will help young tenants to better manage their money and give private landlords greater peace of mind that they will receive their rent in time, while reducing the likelihood of rent arrears.

The Minister also confirmed that the four year benefits freeze is unlikely to be continued past 2020. Although this won't bridge the gap between frozen benefits and rising living costs, it should stop this gap from widening even further.

....But more work to be done

However, we know there is still considerable work to be done to ensure that Universal Credit is fit for purpose and that it provides the financial support that young people affected by homelessness need, when they need it.

Our own research shows the impact of the system on young people’s access to housing, with only one in five private landlords happy letting their property to somebody on Universal Credit. Their main concerns were around delays to payments and not receiving rent from a tenant. For homeless young people, who already face significant barriers in accessing private rented accommodation, the unwillingness of landlords to go anywhere near can make it almost impossible to find a place to live.

A major issue is simply the amount of money young people on UC are entitled to receive. A reduced standard allowance for under-25s makes it more difficult to cover basic living costs such as food and transport, while restricted entitlements to housing costs make it almost impossible to find an affordable place to live across much of the country.

Centrepoint has called for an increase to the standard allowance, and alongside organisations such as Crisis, Homeless Link and Depaul is working to push the government to make sure that benefit levels actually make it possible to find an affordable place to live.

Long delays also risk pushing young people into hardship and debt, while increased conditionality and sanctions can leave them with no income at all.

The Government’s recent proposal to increase the work allowance is also good news for working families and those with disabilities. However, most young people are not entitled to any work allowances at all, and so have seen no benefit from this change. With no work allowance in place, young people will lose 63p of their UC claim for every pound earned from employment; significantly eroding incentives to take up more work.

So while we at Centrepoint welcome these new announcements, we are still campaigning for key changes to Universal Credit to better support young people. These include raising the standard allowance for young people, reinstating the work allowance for those affected by homelessness and completely overhauling the conditionality and sanctions regime to protect the most vulnerable claimants.

Next steps

We still need to make the case for further changes to the benefit system, and to do everything we can to support homeless young people currently on Universal Credit, or in the process of moving to Universal Credit.

Centrepoint has produced guides to help young people on Universal Credit understand what they are entitled to, and has worked with colleagues across the homelessness sector to campaign to ensure that the benefit system does not risk anyone losing their home or make it more difficult for them to move on from homelessness. We have also been working with the DWP to highlight the impact of Universal Credit, and continue to meet with Ministers, MPs and officials to make sure that young people’s experiences are influencing policy at every level.

These announcements show that the Government is starting to listen to the needs of low-income households and people struggling to make ends meet. However a different approach is still needed for people who are experiencing homelessness or are at risk of homelessness, as they are much less likely to have savings and financial support from family members to fall back on.

In 2019 Centrepoint will continue to work tirelessly to ensure preventing homelessness is a top priority for those in power and that the benefits system properly supports young people without a place to call home.