Universal credit fictions
A family’s ability to get universal credit is often based not on their actual circumstances, but on a fictional version of their circumstances.
What do I mean by that?
Well, the two-child limit is one example. That policy means that families with three or more children will be treated as though they only have two, because the government has made a choice to only support two.
And there’s the ‘bedroom tax’. Universal credit doesn’t help with ‘real’ rent, if your council house has more rooms than the government thinks it should. It only recognises, and helps towards, a meticulously-calculated percentage. That’s regardless of how long you’ve lived in your home or how slim your chances are of finding another one.
I work on CPAG’s Early Warning System, which hears about emerging issues in the benefits system. Let me tell you about a working family hit by not one, but two, universal credit ‘fictions’.
Firstly, the couple has been given imaginary earnings. They are treated as earning the amount that the government thinks they should earn – which is twice as much as their real income. This fiction is called the minimum income floor, and the family is affected because the father is self-employed, working in an industry that crashed during the pandemic.
The second fiction means the couple and their children do not get help with their real rent. Instead, they get help only up to a certain monthly amount, set by the government, called their local housing allowance. You could describe it as their ‘dream’ rent – it’s the maximum that the government thinks they should be paying their private landlord, and the couple might strongly agree – but that dream bears no relationship to the reality. The family is simply expected to pay the difference, which means they may not be able to afford other things they need, or may go into debt. Local housing allowance has been frozen at 2020 levels, but private rents have been rising at record rates.
What do you get when you pretend that a family has higher income, and lower outgoings, than it actually does? Insufficient support from universal credit and an inability to pay the bills.
When support for families doesn’t match their needs – as we also see with the benefit cap – families go without. These are some of the policies driving child poverty, and they need to be addressed urgently.