Universal Credit claimants are being forced to forego food and take on debt because of a “design flaw” in its algorithm, a leading human rights charity warned.
A new report by Human Rights Watch found that the “poorly designed” benefit system – which is reliant on a computer algorithm that calculates benefits for people on a low income or out of work – “threatens the rights of people most at risk of poverty”.
The charity is calling on the government to completely redesign the algorithm ahead of an anticipated winter jobs crisis, with up to nine million workers at risk of redundancy as the furlough scheme is wound down.
‘Doesn’t make sense’
People on Universal Credit are entitled to receive payments based on how their earnings change. But, HRW claims, the algorithm only considers the wages people receive within a calendar month – and ignores how frequently people are paid.
Where an individual is paid multiple times in one month, as is common in many low-paid or irregular jobs, the algorithm can overestimate someone’s earnings and “drastically” shrink Universal Credit payments, HuffPost reported.
One claimant explained how he had been forced into rent arrears after receiving a lower-than-expected payment from the Department of Work and Pensions.
“You’re banging your head on a brick wall with Universal Credit,” he said. “I like work … it gives me some pride but I just don’t understand how [the payments] work out. Doesn’t make sense, does it? I am worse off going to work.”
Another said the payments she received were “random”, and she had found herself £1,000 of what she needed to pay rent and support her two kids.
“I am living on whatever I can find in my cupboard at the moment,” she said. “I skip a meal so my children can eat and to ensure that the bills are paid.”
Record numbers on benefits
An estimated 3.4 million people in Britain applied for Universal Credit between March and June, as the pandemic hit. A total of 5.5 million are now claiming it, government statistics show.
“The government has put a flawed algorithm in charge of deciding how much money to give people to pay rent and feed their families,” Amos Toh, a human rights researcher at Human Rights Watch, told HuffPost.
“The government’s bid to automate the benefits system – no matter the human cost – is pushing people to the brink of poverty.”
Dame Gillian Guy, chief executive of Citizens Advice, added: “Universal Credit has been a lifeline for millions in this crisis, but it doesn’t always fit with the reality of people’s lives.
“Those in irregular work can find themselves struggling to budget from month to month, while new claimants risk facing hardship or debt while they wait for a first payment.
“With the potential for a fresh avalanche of job losses this winter, it’s critical the government further strengthens the safety net.
“That means turning advance payments into grants to help people weather the five-week wait and ensuring the system can respond flexibly to people’s circumstances.”
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