Category Archives: Universal Credit

What A Shambles, Lord Fraud’s Budgeting Support Trials An Embarrassing, Expensive Flop

lord-fraud-freudMinister for Welfare Reform Lord Fraud could do with some budgeting support himself after his recent trial to help benefit claimants manage their money proved to be an embarrassing flop that squandered £4 million of tax payer’s money.

Under Universal Credit all benefits will have to be claimed online, despite many claimants having no access to the internet and some having no experience of using computers.  Benefit payments are also to be made monthly and there is a minimum five week waiting period for new claims.  For the small group of claimants transferred onto the new system this in particular is already causing desperate suffering – a recent evaluation found that almost half of Universal Credit claimants were in rent arrears.

This was not supposed to be a problem according to comedy toff Lord Fraud who is over-seeing much of the introduction of Universal Credit.  A new budgeting support scheme would be set up to help the so-called vulnerable manage their money and teach them to use a computer.  Several trials were established to test how this scheme, named Universal Support, would be supplied.  These trials cost just over £4 million and the results are bleak.  An evaluation of the pilots published today found that Universal Support had “no statistically significant impact on either digital or financial capability.”

Perhaps the biggest flaw in this scheme to help those on Universal Credit manage their finances was that those involved in the trial were not on Universal Credit.  The areas in which the pilots were carried out did not include those places where Universal Credit has been introduced.  So what these trials really tested was the impact of Universal Support on people claiming benefits that are being phased out such as Jobseeker’s Allowance.  This meant that the pilots had to sort of pretend that participants were about to claim Universal Credit when they weren’t.  According to the evaluation this presented a significant barrier to people wishing to take up the support, which was offered by local councils, advice agencies and Jobcentres.  As one support workers involved in the trial said “Trying to get them to understand a system that’s not in place that may or may not apply to them at any given time is not very easy to do .”

Some Jobcentres of course managed to find a way round this reluctance amongst claimants to take part in the trials.  In a chilling example of how Jobcentre Work Coaches mislead and coerce claimants the evaluation reported that “Carmarthenshire and Dundee both reported that it was easier to encourage claimants to engage through Jobcentre Plus because they thought that the support was part of their Claimant Commitment.”  Several participants in the trials said they only took part because they thought it was mandatory.  In truth it was only in Islington that those carrying out the trial had the power to mandate claimants to attend under the threat of benefit sanction.

In the end just over half of those (51%) referred to Universal Support chose not to take it up.  Amongst those that did two key problems emerged which point to a worrying future.  The first impacted on those requiring help with using computers.  Both staff and participants involved in the trials said that many claimants depend on mobile phone for internet access, with one reporting “‘I would say the majority of the people we see have a mobile but many of them (a) can’t use it or (b) can’t pay for their broadband connection or (c) can’t pay it, don’t have the money to pay for a call or don’t have one at all.”  A further problem was that in more rural areas internet access is still limited and superfast broadband is rare.  Universal Credit is set to be ‘digital by default’.  If claimants cannot access the internet then they will not be able to manage their claim.

The second problem emerged amongst claimants accessing budgeting support.  The evaluation found that the most significant problem facing this group was not that they needed help learning to budget but simply that they didn’t have enough money.  As one person involved in managing the scheme said “It’s not a capacity issue in terms of actually being able to do the sums or being able to understand when to pay what when…what comes out is actually they just don’t have enough money to get from one of the months to the other.”

The evaluation does report that there were some ‘soft outcomes’ as a result of attending the scheme, with some claimants reporting a positive impact in areas of their lives which were unconnected to budgeting or computer skills.  This may reflect the fact many of the scheme were run as part of a wider package of support which also looked into areas such as housing, health, and of course employability.  The results of the overall evaluation of the scheme however found it made no difference in people’s ability to access IT or manage their money – although the researchers caution that only the short term effects of the scheme could be studied so far.  A cost/benefit analysis of the trial therefore showed that the £4 million spent on Universal Support was squandered, with no demonstrable benefits either to the public or the claimants themselves.

Just over 4000 people were referred onto Universal Support and actually took up the offer and engaged with services.  Many of them faced significant financial hardship and debt.  If Lord Fraud had better budgeting skills then he could have used that £4 million to chuck everybody a grand and actually give them some real help for a change.  But help is the last thing you can expect from a social security system devised by a former banker who has never been elected to anything.  Of course this will never affect Lord Fraud himself, who is a very rich man.  So the next time he wants to inflict a half-baked vanity scheme on benefit claimants he should fucking pay for it himself.

You can read the evaluation at:

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Like Feeding Time At The Fucking Zoo – Workfare Industry Hijacks In-Work Sanctions Inquiry

snouts“ERSA believes it would be more appropriate to utilise the skills and experience which exists in the employment provider community”  The Employment Related Service Association (ERSA – the trade body established to lie on behalf of the employment provider community – better known as the workfare industry)

“We strongly believe that such in-work support should be contracted out, and would suggest that the existing work-based learning infrastructure would be in a prime position to achieve the results required.”  Association of Employment and Learning Providers (also ERSA, more or less).

“Stronger alignment and integration of housing associations into Universal Support and in-work employment support would help engage those facing complex barriers and improve outcomes” – National Housing Federation who represent housing associations.

“The Government should take a holistic approach to in-work progression, ensuring that employers, skills providers and employment support organisations are all involved.” Remploy, better known as Maximus, who can handily claim to be an employer, a skills provider and an employment support organisation.

“National Numeracy can help identify, assess and address poor numeracy …  among job seekers …” – National Numeracy

“The Department for Work and Pensions should therefore look to other organisations who deliver specialist job retention and in-work services with a strong track record.” Mental health charity MIND (hint, hint)

“If Universal Credit is to be truly ‘universal’ then no claimant groups should be exempt.” – Workfare company Learn Direct

“We think that charities could play an important role in the delivery of in-work progression.”   –  lone parent charity Gingerbread

“Specialist organisations already providing support to vulnerable claimants are a key resource. “ Homelessness charity Centrepoint .

“Delivery of pilots, research, consultation and communication could be achieved in partnership with BITC and its business membership base.”  BITC (Business in the Community)

It’s like feeding time at the fucking zoo.  The above quotes come from submissions to the recent government inquiry into changes to the social security system which will see benefit sanctions for part time workers.  This means that when Universal Credit is finally introdeced then claimants without a full time job will face payments being stopped or reduced for non-compliance with Jobcentre demands to  constantly look for more or better paid work.  They could even be sent on workfare in the hours they are not working.   The Work and Pensions Select Committee, a group of MPs who scrutinise DWP policy, carried out the enquiry into these measures which are already being piloted in some parts of the UK.

The responses to the inquiry from the welfare-to-work industry  – the toxic mixture of private companies and so-called charities involved in mandatory workfare and training programmes – were united in one demand.  They all want some money in the form of juicy government contracts to run any future scheme.

This is despite them almost all acknowledging that introducing benefit conditionality for part time workers has never been tried anywhere in the world and that there is no evidence it will be effective.  It is also despite the fact that the proposed system is to be backed by a horrifying benefit sanctions regimes which will see even those with jobs living in unprecedented poverty if they are sanctioned.  And of course it ignores the stark reality that it is near certain that no part-time worker in history has ever wished they could be sent on an unpaid work scheme or mandatory CV workshop in the hours they are not working.

It is true that many charities say they are opposed to sanctions for part-time workers whilst even the more naked profiteers such as private companies like Maximus raise concerns.  ERSA, who represent the industry, have used the enquiry to lobby for all in-work conditionality to be managed outside of Jobcentres – a long standing aim from an organisation which seeks to place all DWP services in private hands.  Others call for sanctions to be fair, or to not affect those they call vulnerable too badly.

Some are transparent in their self-interest such as the National Housing Federation who want ‘stronger integration of housing associations’ into any future scheme suggesting they could act as formal contractors and sub-contractors..  Their only concerns about benefit sanctions are focussed on those with rent arrears or special rent payment arrangements who they say should be excluded from conditionality.

A few submissions call for any in-work conditionality to be voluntary such as the one from Gingerbread, who want working lone parents to be exempt from sanctions.  They also insist however that charities should be involved in running the scheme and it is this that reveals the cynicism that now exists within the voluntary sector.  Gingerbread also oppose benefit sanctions for unemployed single parents.  That didn’t stop them running a lucrative Work Programme scheme where they were contractullay required to report lone parents to the Jobcentre for sanctions in cases of non-compliance.  We hate this, they say, it is unethical and counter to our charity’s objectives.  So we want a lot of money for doing it is the real message.

Of course some submissions to the inquiry were harsh in their criticism.  Boycott Workfare say no claimants should face sanctions whether in work or not and that the record of organisations running mandatory schemes is “a catalogue of corruption, violation of work and safety standards, and abuse.”  Oxfam warn that in-work sanctions are overly punitive, fail to take into account employer behaviour and could drive people into poverty. Parkinson’s UK say that neither the voluntary or the private sector should be involved in any future scheme and slam the ‘systemic failure’ of current benefit related health assessments.  The University of York who have a team studying benefit sanctions say “in practice, in-work conditionality can be counterproductive – undermining work incentives and opportunities rather than reinforcing them.”  And the PCS Union demand that “under no circumstances would it be appropriate to sanction an in-work claimant”, adding “but don’t expect us to do anything about it”.  Actually I added that bit.

The difference between these organisation, and those mentioned previously, is that none of them have been involved in welfare-to-work programmes.  As such there is no financial incentive for them to modify their demands. They have no need or desire to sell out their principles for thirty pieces of silver from the DWP.  So they are rightly damning of these proposals which are based on some horseshit Iain Duncan Smith scribbled down on the back of an envelope one day and new Work and Pensions Secretary Stephen Crabb is too cowardly to scrap.

In-work benefit sanctions could leave those working part time abandoned to survive on just a few pounds a day, for months, or even years at a time.  They are perhaps the most vicious social security legislation yet, from this or any previous government.  Those sanctioned will face a desperate choice between eating, or paying to get to work.  Homelessness, destitution and unemployment will be the likely outcome for many.  All of the organisations that responded to this enquiry know this.  Some don’t care.  A few oppose it outright and are prepared to say so.  But most are content to whinge a bit and then use the enquiry to make sure that if this system is to be widely introduced then at least they will make some money from it.  Those whopping charity chief executive salaries won’t pay themselves after all.

You can read all the submissions to the inquiry at:

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Fraud And Error Soaring In Universal Credit And Benefit Underpayments Hit Record High


The UK’s biggest benefit scammer Lord Fraud.

Fraud and error in the Universal Credit system is soaring whilst the rate of benefits going unpaid overall has hit a ten year high national statistics released last week have shown.

Statistics examining fraud and error within the benefit’s system are released annually and this is the first year that Universal Credit has been included. Almost 250,000 people are currently claiming the new benefit which is set to eventually replace all mainstream out of work benefits along with tax credits and housing benefit. One of the reasons given by ministers for such sweeping changes to social security was that Universal Credit would help cut fraud and error within the system. Last week’s statistics show that the opposite is happening.

Over-payments due to fraud and error make up 7.3% of Universal Credit’s total expenditure – higher than any other benefit the DWP administrates. The over-payment rate for Jobseeker’s Allowance, the benefit with the nearest comparable caseload of claimants, is just 5%.

Universal Credit’s performance is equally woeful when it comes to people being underpaid their benefits with 2.6% of expenditure not going to those entitled to it. Almost all of this is down to offical rather than claimant error, and once again, it is higher than any other DWP benefit.

Underpayments across all benefits hit 1% last year, the highest figure since comparable figures began in 2005.  And in another record for the DWP, the rate of benefits claimed fraudulently also hit a ten year high – although there is more to be said about this below.

To read lying bastard Lord Fraud’s gushing press release which accompanied these statistics you would not know any of this. Fraud and error combined is at a record low according to the Minister for Welfare Reform, when the truth is that the figure is unchanged since last year. The department also points out that both claimant and official error have fallen to record lows and makes no mention of the rise in fraud that has offset this. Neither do they mention the rise in under-payments.

The truth, as the Office for National Statistics (ONS) explains, is that in 2013/14 a change in how fraud and error were recorded resulted in many cases which were previously viewed as being an error being re-classified as fraud. This is the reason that errors in the most recent period are at record lows and also the reason that fraud over-payments are at record highs. According to the ONS this change means that “results post 2013/14 cannot be directly compared with the earlier results”. Yet that’s exactly what the DWP has done in an attempt to hide the truth about fraud and error within the system.

Despite all this, what the figures show is that fraud within the benefit’s system is very low, at just 0.9% of total expenditure. And even then these figures are rigged to maximise the chances of payments being recorded as claimant fraud rather than error.

The fraud and error statistics are collected by carrying out ‘benefit reviews’ on a small percentage of claimants and then using the outcomes of these reviews to calculate an approximate figure across the entire benefits system. What this means is that a claimant will receive a letter and then be expected to attend an interview where they will be interrogated about their benefit claim. These reviews are carried out at random, so if you get a letter about it don’t shit yourself and try to establish if this is a fraud ivestigation or a benefit review. Fraud investigations are usually carried out under caution, whereby anything you say may be used against you in a court of law.  You should be informed of this.

Two of the more common outcomes to these reviews are that the claimant is untraceble or found to be abroad. This is automatically viewed as being fraud when it could simply be that the claimant has moved house, informed the DWP and it has not been correctly recorded. It could also mean a landlord is still picking up housing benefit payments for a tenant that has long since moved out. Not all benefit fraud is carried out by benefit claimants.

Sometimes when a claimant is scheduled for review they report a change in circumstances or end their claim during the process. Again this is automatically recorded as fraud when it could just be a coincidence and simply mean they got a job. The same applies when there is a ‘loss of claimant contact’ meaning the benefit review is not completed for some unspecified reason. For the purposes of these statistics, an outcome of fraud does not mean someone has been prosecuted, or that a fraud has been admitted. It simply means that benefits were reduced or stopped as a result of the review and the DWP believes that the claimant was deliberately acting fraudulently.

Even with this calculated book-cooking the statistics show one stark fact. The total amount of money lost through fraud in 2015/16 was £1.6 billion and this is less than the amount of benefits which were underpaid which stands at £1.8 billion. Someone’s getting shafted alright, but it’s not the DWP, it’s us. Check your claim, make sure you’re getting every fucking penny you are entitled to.

Read the most recent Fraud and Error statistics and the background notes on how they are calculated (pdf).

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The True Horrors Of In-work Benefit Sanctions Have Not Yet Been Understood

sanction-sabsSo called hard-working people will soon be abandoned to unprecedented poverty when payments intended to cover housing costs are sanctioned for the first time under sweeping reforms to in-work benefits.

When Universal Credit is fully introduced (stop laughing) part-time workers on a low income will be expected to constantly look for more, or better paid work as a condition of receiving vital in-work benefits.  Any failure on the part of claimants to prove that they carried out constant job searching in the hours they were not working will mean benefits are sanctioned.

For claimants who are unemployed the sanction system will remain largely unchanged under Universal Credit.  Those without health problems who are sanctioned will lose all of their personal benefits except what is required to pay for housing costs or children.  This will mean a childless claimant will have no money at all once they have paid their rent – although they may be eligible to apply for emergency Hardship Payments of around £40 a week.  It is this nasty regime that has led to the explosion in foodbanks and been linked to a growing number of suicides.

If this same claimant is in part time work then they may not receive any additional benefits other than the housing element of Universal Credit – the replacement for what is now known as Housing Benefit.  And so, for the first time, it is this benefit which will be sanctioned should they fail to carry out Jobcentre demands to look for additional work.

Working claimants who are sanctioned will lose the same amount as those who are unemployed  – the equivalent of a current weekly dole payment of £71.70.  That means if some is working on a low income and claiming help with their housing costs then £71.70 will be deducted from their benefit.  To see the full horror of how this will play out in some people’s lives then you have to do some sums.

Take a single, childless person in Bristol working at the current minimum wage for 20 hours a week and paying £120 a week in rent – the local housing allowace rate in the area for a claimant over 35.  Under Universal Credit this person will have a weekly income of £244 made up of £144 a week in wages and £100 a week in benefits.  Once their rent is paid this will leave them with £124 a week.  If they are sanctioned however they will lose £73.10 leaving them with just £50.90 a week to live on.  That’s over £20 a week less than the current dole and just £10 a week more than Hardship Payments.  Universal Credit will therefore not make work pay for those who have been sanctioned.  It will however make work compulsory.

The claimant will not be able to leave their job without risking a disallowance – meaning no benefits at all.  In the hours they are not working they will still be expected to carry out work related activity to look for a better job, which under current rules, could include some form of workfare.  The meagre income they receive means they will be unlikely to qualify for additional Hardship Payments.  And astonishingly they are also likely to have to pay Council Tax out of that sum.
In Bristol they would be expected to pay around £9 a week in Council Tax assuming they lived in the lowest possible band.  This brings their weekly income down to about £42 a week – and they are working.

A weeky bus pass in Bristol costs £23.80.  Claimants must be prepared to travel at least 90 minutes on public transport to their job so in most cases this will be a necessary expense.  This will mean hard working people surviving on less than £20 a week for food, clothes, basic hygiene costs and bills.  That of course assumes they aren’t subject to the Bedroom Tax in which case they will get no money at all in some cases, just a steadily increasing debt.

The only real option for most will be to dig into money intended to cover rent.  For working claimants a sanction will mean inevitable rent arrears – and as a sanction can last up to three years – for many it will mean homelessness.  And therefore eventual joblessness.  And with no benefits because losing their job will have been deemed to be their own fault.

This system is designed to ‘incentivise’ people to look for more, or better paid work.  So imagine, by some fucking miracle, that an in-work benefit sanction doesn’t destroy someone, it motivates them.  That they pull their socks up and by some other fucking miracle manage to find an additional job which doesn’t clash with their existing hours.  Let’s say they gain an additional 10 hours a week work on the Minimum Wage.  Will it make any difference?  Barely, because the sanction will still apply unless they have been working full time for a period of six months.

Much of their additional wages will be eaten up by housing costs as their already sanctioned claim is reduced the more they earn.  So somebody working 30 hours a week, with a sanction, in the cicrumstances described above, would receive a total of £207.68 a week in wages and no Universal Credit at all.  After rent and Council Tax is paid that will leave them with £77.  Less than a fiver more than the current dole.  For working 30 hours a week.

There is nothing particularly special about this claimant’s circumstances other than that they live in the south of England where rents are higher.  In London and other areas many will fare even worse.  There should be no doubt about what these sanctions are intended to do.  This is the bureacratic annihilation of an individual as a message to everybody else that if you do not comply – that if you do not constantly strive – the government will destroy you.  It is like nothing that has been seen in UK legislation since the horrors of the workhouse.

According to the DWP benefit sanctions are only used as a ‘last resort’.  There have been 1.6 million ‘last resorts’ since the system was toughened in 2012.  In work benefit sanctions are already being trialled in some parts of the UK with desperate results.  The extension of this brutal regime will create in-work poverty that has rarely, if ever, been seen before in the UK.  People working for pennies, with no quality of life at all. Those already living in the cheapest possible accommodation that can be found in most of the country facing homelessness.  Some of these people will be ill, wrongly found fit for work by Atos or Maximus.  Some will be left with no money at all depending on if they are subject to the Beneift Cap or Bedroom Tax.  Others will have debts they will never hope to pay back whilst sanctioned and so will just get bigger and bigger.

An in-work benefit sanction for many will be a life sentence, especially for those who are older and carry any debts incurred into retirement.  For others it will be a death sentence as the strain of extreme poverty, hard work and constant Jobcentre harassment pushes some over the edge.  DWP ministers are happy to accept this collateral damage as part of their attempt to dicipline the working class into accepting a life of hard-working drudgery for poverty pay.  The only question that now remains is will the trade unions, charities and others that have cowardly accepted vicious welfare refoms continue their co-operation when it is their own workers and members who are subject to this torment?

You can read the current rules for Universal Credit, and many other benefits at:

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Universal Credit Will Be Worse Than Tax Credits Says Think Tank Run By Tory


How Universal Credit won’t make work pay for many (click to enlarge)

The DWP is attempting a defence of Universal Credit as criticism of the bungled reforms to the social security system grow ever louder.

The Resolution Foundation, a think-tank run by a former Tory minister, have slammed Universal Credit today warning that it will no longer make work pay for many claimants due to savage cuts.  According to a report published by the group the changes to the benefit’s system will “on balance be less generous than the tax credit system for working families”.   Those hardest hit are likely to be second earners and working lone parents.  These impacts will still be felt despite the rise in the minimum wage and cuts to income tax.  This will leave a suspicion that Universal Credit has become “a simple exercise in cost cutting” warns the organisation.

Making work pay was the official reason for Iain Duncan Smith’s sweeping changes to the social security system.  The original plans for the reform did indicate that many of those in work would receive a small rise in income – particularly those working a small number of hours per week. Then along came George Osborne who realised that widescale changes to social security were an opportunity to disguise the most savage cuts to the working poor’s benefits in decades.  And so the amount of money that people will receive when Universal Credit is finally introduced has been stealthily cut away to the point where it is now less generous than the current system.  As such the carrot – the term used by wankers who work in think tanks to mean any improvements in benefit levels – has disappeared.  Universal Credit now is just a big fucking stick designed to beat the poor into a lifetime of low paid endless toil.

The Resolution Foundation’s report acknowledges this saying ominously that  the success of Universal Credit now rests on the shoulders of ‘in-work conditionality’.  This is the elaborate system of benefit sanctions and Jobcentre harassment that is about to be inflicted on part time workers to force them to constantly seek to obtain more, or better paid work.  The implications are chilling.  It will no longer matter that you are working already.  It will not even matter if the job the Jobcentre wants you to take will make you worse off.  You will have no choice.  Do what your Work Coach tells you, or face benefit sanctions.  This system is already being piloted in some parts of the UK with devastating results.

Until now much of the DWP’s strategy has been based on the warped concept that unemployed people are responsible for unemployment.  And so they claim Iain Duncan Smith’s brutal welfare reforms worked, unemployment is currently relatively low. All those sanctions, the lives demolished, soaring homelessness, the deaths, have all been worth it.  This is ‘tough love’.  Sure some people die but for everyone else, well they get a job in Poudland on the minimum wage.

But even this horrifying mirage is untrue.  When the Tory government weren’t elected back in May 2010 the UK was emerging from a bleak recession and unemployment was high.  When growth returned, however slight, the jobs market picked up. It had nothing to do with Iain Duncan Smith’s endless crazy schemes, it’s just what hopefully happens after a recession.  If it hadn’t former millionaires would be stabbing each other over tins of tuna by now.

It’s there that the good news ends however.  Much of the rise in employment has been due to part time or temporary work and an increase in self-employment.  The number of working households claiming Housing Benefits because of low pay has doubled to over a million in the last six years.  That’s why the government are turning their attention to working benefit claimants.  So now it is not just that unemployed people are responsible for unemployment, but those who are low paid are also to blame for getting shit wages.

The Resolution Foundation say that simply harassing part time workers to get a second job will not be enough to ensure the success of Universal Credit as even the recently increased minimum wage will not provide a genuine living wage for most.  Instead they are calling for measures to be introduced to ‘help’ people earn more, although they suggest these should be outside of a conditionality regime.  The report notes that in some sectors, such as care or retail, almost half the workforce are paid at the level of the new minimum wage. Even if these people are working full time they will still need benefits to survive and so they must be encouraged to earn more says the report.

It is here that this think-tank stops thinking.  Just like the DWP they seem to believe that all of these low paying jobs would magically disappear if people stopped being so unaspirational.  That we could all have fantastic full time jobs with generous salaries and free fucking vol-au-vents everyday like think-tank workers do.  It is a middle class fantasy that assumes capitalism would be so nice for everyone if only the poor would just stop being so poor. Everyone can do a non-job and sit at a desk all day for thirty grand a year if they try hard enough.  The bins will empty themselves after all.

It does not take much to find the truth behind this happy clappy facade.  Whilst the DWP gushingly announce to claimants that Universal Credit will help them earn more money they are telling bosses that the new system will allow them to fill ‘any job’ and help manage the ‘peaks and troughs’ of their business.  That it will help employers “identify opportunities for flexible working” and increase competition for vacancies.  That does not sound like a reform intended to help workers raise their wages or increase job security.  The Resolution Foundation are wrong, and they know it.  They are simply too committed themselves to half-baked ideology that blames the poor for their plight to call for the obvious solution to the problems they raise in their report.

Universal Credit should be scrapped, tomorrow.  It has barely even been implemented anyway.  There is no computer system currently capable of handling the scale and variety of claims it will need to process, just a trial going on in a couple of Jobcentres.  Only the simplest claims, single newly unemployed people without kids, are currently being asked to claim Univeral Credit in most parts of the country and these are being administered in almost the exact same way as current unemployment benefits.  As one DWP insider put it, “it’s still exactly the same just under a different name.“

Iain Duncan Smith has gone and good fucking riddance.  Now is the perfect time to end this shambles.  Don’t hold your breath though, new Work and Pensions Secretary Stephen Crabb is a dick.  Worse, he’s an ambitious dick without the brains to back it up.  The financial security of millions of people now lies in the hands of some God-bothering chipmonk who once saw an episode of The Office and decided that David Brent would make a good role model.  We’re fucked.  Nothing left to lose and might as well have a revolution fucked.  Start buying tins of tuna.  And pitchforks.

Still for now at least we can trash the DWP’s facebook campaign singing the praises of Universal Credit.

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Astonishing: Working Benefit Claimants To Face Financial Penalties If Their Boss Files Tax Information Late


OOB refers to the requirement that payroll data is submitted On Or Before the date employees get paid.

Chaos is on the way for the lowest paid workers as new rules come into force which link payment of vital in-work benefits to employer’s compliance with providing tax information on time.

From this month almost all employers will finally be expected to provide payroll data to HMRC every month as part of the Real Time Information (RTI) system. This change has already been introduced for larger employers but businesses with nine or less employees had been given a 12 month ‘easement period’. That ran out on April 6th this year.

For those on low incomes this payroll data will be used to calculate their entitlement to Universal Credit.  If this information is not filed on time then bosses are warned by the DWP that their workers may: “receive too much or too little Universal Credit”.  This means those with irregular hours and earning patterns, such as people on zero hour contracts, could be left up to several hundred pounds short at the end of the month. For workers dependent on benefits to meet rent payments this could prove devastating. Try explaining to your landlord that you can’t pay the rent because your boss didn’t file their tax return on time this month.  Of course some claimants could also end up receiving too much Universal Credit and not know why – or even that they have – calculations are already breath-takingly complicated.  This will lead to involuntary debt and unforeseen repayment demands in the future.

Perhaps the most chilling problem is that many bosses just don’t care about their employee’s in work benefits. Research published by HMRC late last year found a small number of ‘micro’ businesses had no intention of changing their payroll systems to meet the new requirements – as the quote above this post demonstrates. Many more employers were still confused about the changes, or were not even aware that Real Time Information was being introduced. Others said they could’t afford updated IT equipment to run the software required to manage this reporting system. Some claimed that only one person does the payroll returns and if they are off sick then it doesn’t get done.

When it was pointed to these non-compliant businesses that late reporting would affect the payment of in-work benefits to staff the employers fell into two groups according to the researchers. There were those who said they would strive to comply with the new system so as to not affect their employee’s income. And there were those that were ‘unconcerned’.

In a meagre effort to make them more concerned HMRC have introduced a penalty system for employer’s who don’t provide payroll information on time. It is, as you might expect, a bit of a joke. Employers will not be fined if it’s the first time they’ve filed late that year. Even then they will be able to appeal due to ill health or IT difficulties. And the fine is just £100 for the smallest employers and a trivial £400 for those with over 250 employees. This is likely to be considerably less than the financial penalty that workers could face for their employer’s negligence.

Despite several HMRC reports into the introduction of Real Time Information there appears to be little information being published on how many businesses are compliant with the scheme all of the time. If only a tiny percentage of employer’s file information late – because they are careering out of business anyway for example – then this could impact on the impact of tens, or even hundreds of thousands of people. Errors in the system alone are likely to lead to significant suffering and confusion. For anyone who’s ever had a real job or had to deal with inept Jobcentre busy-bodies the end result is easy to imagine. When payments aren’t correct the DWP will blame your boss and your boss will blame the DWP. The worst kind of employers may just sack workers who get too uppity about PAYE information being filed late. And then possibly lie to the Jobcentre about why they left and cause them to lose eligibility to benefits completely. It is an astonishing amount of power for an employer to hold over their workers.

In the mind of bungling toff Lord Fraud, the unelected Minister for Welfare Reform who helped design this new system, bosses are all wonderful people who would never abuse their staff and always pay their taxes on time. Recent revelations about the UK’s own Prime Minister shows what bollocks that is. But so entrenched is the capitalist class’s delusion of their own fucking wonderfulness that they are now designing administrative systems that depend on this honourable behaviour amongst the rich.

You don’t get rich by behaving honourably though. You get rich by using every tool you can find to dominate and exploit those surrounding you. And as more people are slowly transferred onto Universal Credit then they will be more vulnerable to exploitation and abuse by their employers than working class people have been in generations. Behind all the lies about making work pay and incentivising hard work, that is the real reason for the Tory government’s welfare reforms.

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Over Half Of All Businesses Launched On Government Enterprise Scheme Would Be Shut Down Under Universal Credit

Precariously self-employed?  The Minister of Death is coming for you.

Precariously self-employed? The Minister of Death is coming for you.

Over half of all small businesses launched under the DWP’s flagship New Enterprise Allowance (NEA) scheme will be ruthlessly closed down when draconian new benefit conditions for self-employed people are introduced as part of Universal Credit.

New Enterprise Allowance (NEA) is the Jobcentre scheme under which claimants receive a small allowance for starting a small business for the first six months as long as they agree to occassional harassment from some dickhead advisor from the local welfare-to-work company.  It has been a huge success according to a gushing press release published by Minister of Death Priti Patel today, who claims that 80% of those who started out as self-employed on the NEA are still trading, with nine in ten of them having been in business for over 12 months.

Patel was responding to a survey carried out amongst NEA participants examining the success of the scheme.  A total of 1,500 of those who had taken part were questioned and the vast majority had been sucessfully self-employed for over one year.  The so-called support offered by NEAs was not so popular however.  Of those still trading at the time of the survey 70% had not accessed any help from their provider after the initial launch of their business.  They appreciated the money though, despite it being the miserly amount of £65 a week for the first three months on the scheme and then falling to just £33 for the remaining period.  This is because skint people need money, not lectures from some DWP busy-body whose entrepreneurial flare is so astounding that they ended up working in the fucking Jobcentre.

According to the survey the majority of these businesses were sole traders, with some of the most common sectors including cleaning, health and beauty, IT repairs or gardening.  In other words these are largely precariously self-employed workers, struggling to get by from week to week.  And this is reflected in the amount of money they are making.  Over half of small businesses (58%) questioned at the time of the survey had a monthly turnover of less than £1000, and for 37% it was under £500.  Almost of all these businesses will be forced to close when Universal Credit is fully introduced.

Savage new rules for in-work benefits are soon to mean that after one year self-employed people will be expected to be earning the equivalent of the national minimum wage for 35 hours a week if they have no young children or health condition.  That means profit, not turnover, of at least £985 per calender month at the current minimum wage rate – and as that rises this will become ever more difficult for self-employed people to achieve.  Those who do not meet this threshold will not be classed as ‘gainfully self-employed’ by the Jobcentre and so will be forced to claim mainstream unemployment benefits*.  They will then be expected to carry out ‘work related activity’, which means looking for a job, for up to 35 hours a week.  Self-employed activity may not be counted towards this and they could be stopped from doing it at all and forced to attend full-time unpaid workfare instead.  From budding entrepreneurs starting out as their own boss  to benefit scroungers at the stroke of DWP Minister’s pen.

For those with monthly profit at or close to the threshold and passing the test for ‘gainful self-employment’ then the situation will be little better.  These claimants will then be assumed to be earning the minimum wage rate for full time work when their in-work benefits are calculated.  This will include benefits intended to cover housing costs as well as the replacements for both Child and Working Tax Credits.  So should someone self-employed go through a lean patch for a couple of months they will not only suffer through lack of earnings but their Universal Credit will not reflect that loss of income.  The only solution will be to go back on the dole in an effort to restore housing benefits, and that’s assuming the Jobcentre lets them and doesn’t suspend their claim for giving up gainful self-employment.  This is what Minister of Death Priti Patel secretly has in store for all those small businesses she is cheering on today.  Financial destitution and bureacratic chaos.  And once they on their knees, sanction their benefits for not trying hard enough.  Build’ em up and knock ’em right back down.  She hasn’t had so much fun since she was working in PR for the tobacco industry encouraging poor people to take up smoking.

*Such is the shambles in the delayed roll out of Universal Credit that there is a crass attempt being made to bolt this kind of conditionality onto the current Tax Credit system.  As reported in the trade journal Nursery World (h/t @stukisu) many child miners are being inundated with demands from HMRC to prove that their small businesses are genuine and that they are striving their hardest to make a profit.  Perhaps most appallingly, as this is being done before Universal Credit has been implemented, they are threatened not just with loss of their current in-work benefits but a demand for a repayment of all benefits to date – potentially plunging some into thousands of pounds worth of debt.  That’s child minders, working all the hours God sends for shit money, being persecuted and driven into unescapable debt for not making quite enough profit or being able to produce detailed business plans and advertising strategies on demand to government bureacrats.

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