Thousands of Lancaster residents set to be hit by Universal Credit 'flaw' which has been compared to Post Office scandal

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An alleged ‘flaw’ in the Universal Credit system, meaning people who pay weekly rent will have to find an extra week’s payment every leap year without any relief, has been compared to the Post Office computer scandal by Lancaster City Council.

This year, an extra week’s rent will become due in April. Thousands of people across the UK could be required to find the extra money. The issue has happened twice in the past, it is understood.

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In the Lancaster district, almost 1,500 council house tenants receive the housing element of Universal Credit. Families already on low incomes could be required to find an extra £138 without any support, Lancaster City Council heard.

The city council knows how many tenants are in its own council homes but people in private rented accommodation could be affected too, it was said. Nationally, the Universal Credit ‘flaw’ could effect half a million homes, the council heard.

Coun Joanne Ainscough. "It feels very similar to the Post Office scandal where people ignored the issue rather than fixed it."Coun Joanne Ainscough. "It feels very similar to the Post Office scandal where people ignored the issue rather than fixed it."
Coun Joanne Ainscough. "It feels very similar to the Post Office scandal where people ignored the issue rather than fixed it."

Universal Credit is calculated on a 52-week year. But in a year with 53 Mondays, it does not allow for the additional week’s rent levied by councils, housing associations and perhaps private landlords too.

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Councillors and Citizens’ Advice workers raised the issue at the latest full council meeting.

Jeni Meadows, from Citizens’ Advice in north Lancashire, said: “Last year, we helped over 7,000 residents with many issues. This year in January alone we saw over 1,300 residents, many of whom are struggling with the cost of living. That figure is the highest in five years. The service is continuing to break unwelcome records as residents on lowest incomes struggle to afford the essentials.

“We believe Universal Credit suffers a perennial administrative problem which is deeply unfair. This year is a leap year, meaning 53 Mondays. It is a quirk of our calendar system every five or six years. But for people who pay rent weekly, they have to pay an extra week’s rent not covered by Universal Credit.

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Jeni Meadows of Citizens Advice at a Lancaster City Council meeting.Jeni Meadows of Citizens Advice at a Lancaster City Council meeting.
Jeni Meadows of Citizens Advice at a Lancaster City Council meeting.

“In January, I spoke to a tenant who I’ll call Suzie, with rent arrears problems. The issues became clear. Universal Credit will not match her rent for 2024. She is a mum with young children. She is extremely worried about finding the extra money.”

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For a three-bedroom house in the Lancaster district, Jeni Meadows estimated the extra cost would be £138 for a week’s rent. She added: “That may not sound a lot. But for people on low incomes its a considerable amount to find out of nowhere.”

She added: “Citizens’ Advice is extremely worried about this and believes this is administratively unjust. It is only right that the Department for Work & Pensions (DWP) amend calculations to avoid this happening again. This issue will have an impact on wider services including food banks, which are all under pressure.

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Coun Phillip Black.Coun Phillip Black.
Coun Phillip Black.

“We’re asking the government to change the Universal Credit system through legislation. We want the DWP to take action. If Lancaster City Council and other councils can put pressure on the DWP, the more likely we are to change this unfortunate, unfair situation.”

She said Lancaster City Council’s housing department is aware of the issue. It has passed information to tenants and helped Citizens’ Advice. She supported a motion put forward by councillors.

Motion for action

Coun Caroline Jackson, council deputy leader, backed by Coun Phillip Black, the leader, put forward the motion on the 53 Mondays issue. They said residents in receipt of housing benefit are not affected.

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Coun Jackson said the Universal Credit issue was probably to do with computers. She added: “The trouble is we know this but the DWP cannot acknowledge it. This probably affects about half a million homes.

“The DWP has said councils receive funds for discretionary housing payments. Yes, we do. But we use that for other needs, such as for homeless people who need to get into private accommodation or people who suffer health problems and then cannot pay rent.

“If we used £168,000 towards these DWP things, we would then reduce the money we have to support people facing other housing crises. Robbing Peter to pay Paul, with all the other difficulties we have, is a ridiculous answer.

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“The council and housing associations are doing things to deal with this, including help to spread payments. But we want the government to change the system.”

Coun Martin Bottoms, deputy mayor, said: “Universal Credit uses a threshold system. Would getting an extra week’s rent payment take people over the threshold and create other problems? In the past, we had discretionary warm home payments which people received regardless. Maybe we could ask for discretionary payments this year, so people don’t suffer?”

Coun Andrew Gardner asked if tenants in the open property market could be impacted too. Coun Jackson thought it would be the same.

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‘Similar to Post Office scandal’

Coun Joanne Ainscough said: “I’m a computer software engineer. I know how computers work. Computers are supposed to make people’s lives easier. When it’s not happening, it feels deliberate.

“It feels very similar to the Post Office scandal where people ignored the issue rather than fixed it. I fix bugs in computers when I find them. This is not a bug. These things need to be fixed. This is a lot of money and it needs to be fixed.”

Coun Claire Cozlier said there were many issues with the benefits system including gaps between different schemes.

Coun Chris Hanna added: “The DWP has known about this since 2013. Universal Credit came into force in April 2013. Since then, there have been unusual years in 2013-14 and 2019-20. Now there’s another.

“Universal Credit was supposed to simplify things. But it did not. In 2019, the DWP realised there was a problem but the government did nothing. This has a been a problem for a decade but not a priority. We need to press MPs and government ministers for change.”

Coun Black added: “The principle of the welfare state is for people to receive meaningful contributions to help. To say that principle does not apply in one particular week is not in keeping with the principle. Furthermore, many people would find themselves in difficulties if they were asked to find a quarter of their monthly rent again.”

In a vote, the motion was passed calling on the government to alter the Universal Credit system in 2024 with a payment adjustment and changes to avoid the problem being repeated.”