Issue date
07 Aug 2014

New research published today (Thursday) by the TUC reveals the future impact of a controversial new welfare reform – the five-week wait – on workers in North West England, with 39,000 newly unemployed people set to be hit each month.                                                                                                                                                                                                                        

Currently most workers who lose their job have to wait two weeks before they get their first benefit payment. But under new Universal Credit rules for assessing unemployment claims, most people will face a wait of more than five weeks before they get any money. This could mean going two months into rent arrears before any cash support arrives.

Across the UK, almost 300,000 people will be hit each month by the five-week wait. Despite this, recent polling by YouGov for the TUC has revealed that fewer than one in seven people (13 per cent) say they have heard of the plans. Seven out of ten people (70 per cent) say that they would be worried when asked to imagine losing their job and not being entitled to receive any benefit payments for five weeks. More than half (52 per cent) say it makes them think less favourably of the government’s welfare reforms.

The TUC’s new research reveals the monthly average number of newly unemployed people broken down by region, local authority (county and unitary) and constituency. This indicates how many people can be expected to be hit by the five-week wait when Universal Credit replaces workers’ current safety net benefits.

Across the region, Lancashire is the most affected local authority where over 5,000 people each month are expected to be hit by the five-week wait, in Manchester more than 3,600 people will be affected whilst in Liverpool just under 3,500 people will be affected(see notes to editors for other local authorities and parliamentary constituencies). These local authorities are amongst the biggest affected in the UK, ranked 4th, 9th and 11th respectively. The DWP’s own analysis suggests that the measure may increase claimants’ reliance on short-term loans.

The TUC has launched a new campaign, Saving Our Safety Net, to highlight the five-week wait and other welfare reforms that cut safety net protection for working people.

North West TUC Regional Secretary Lynn Collins said: “We know workers in the North West have suffered cuts in real earnings over the last 5 years, and will have relied on savings to get by, which means that many workers have no financial buffer if they lose their job. Help should be there when it is needed, but instead people will be left to rely on food banks and pay day loans to see them through the wait.”

“Welfare reform is one thing but the five week wait is a collective punishment for anyone who loses their job. People need to focus on finding new work, instead of being stressed-out about how they will pay the rent, feed the kids and keep the heating on.”

“Job security has got worse since the recession. Government ministers are out of touch and fail to understand the anxiety many people feel not knowing if they’ll still have work next month. If your job goes, the five-week wait puts you at greater risk of a downward spiral where you’re trapped in debt, lose your home, become ill from the stress and fall too far to climb back again.

“With these escalating bills, worsening job security and only a limited recovery in the jobs market, a 5 week wait could easily push many more families into poverty through no fault of their own. These people have paid for, and deserve, a safety net.”

“We are launching the Saving Our Safety Net campaign to expose government welfare plans for what they are – cuts to the National Insurance safety net we’ve all paid into on the understanding that it will be there when we need it.”

NOTES TO EDITORS:

- Average number of people starting JSA claims each month in the North West (averaged from JSA claims data from June 2008 to May 2014)

Local authority

Monthly JSA starts

Blackburn with Darwen

922

Blackpool

1,056

Bolton

1,619

Bury

979

Cheshire East

1,375

Cheshire West and Chester

1,541

Cumbria

1,812

Halton

850

Knowsley

1,127

Lancashire

5,427

Liverpool

3,494

Manchester

3,670

Oldham

1,394

Rochdale

1,399

Salford

1,555

Sefton

1,506

St. Helens

1,035

Stockport

1,229

Tameside

1,299

Trafford

1,022

Warrington

923

Wigan

1,745

Wirral

1,893

- A data sheet showing the average number of people starting JSA claims each month and broken down by local authority can be found at: https://www.tuc.org.uk/sites/default/files/MonthlyAverageJSAclaimsbyLA.xls  

- A data sheet showing the average number of people starting JSA claims each month and broken down by parliamentary constituency can be found at: https://www.tuc.org.uk/sites/default/files/MonthlyAverageJSAclaimsbyConstituency.xls

- A system of short-term benefit advances will operate that will allow some claimants to receive an advance payment during the five-week wait, however the qualification criteria are very narrow (with people already in financial difficulty likely to be excluded), the advances are repayable within six months, they only cover around 50% of benefit entitlement and fewer than one person in six is expected to qualify.

- Information on the new TUC campaign Saving Our Safety Net can be found at http://savingoursafetynet.org/

- A TUC commissioned YouGov poll found that the five-week wait is opposed by almost four to one (70 per cent to 18 per cent). Fewer than one in seven people (13 per cent) say they have heard of the proposal and more than half (52 per cent) say it makes them think less favourably of the government’s welfare reforms. Seven out of ten people (70 per cent) say that they would be worried when asked to imagine losing their job and not being entitled to receive any JSA for five weeks. Of those who said they would be worried, the top concerns were meeting rent or mortgage payments (69 per cent), buying food (52 per cent), and paying energy bills (23 per cent). Full poll details can be found at https://www.tuc.org.uk/sites/default/files/FiveWeekWaitPoll2014.pdf

- The TUC report Universal Credit: the problem of delay in benefit payments can be found at https://www.tuc.org.uk/sites/default/files/BenefitsDelayed2014.pdf

- The DWP explanatory memorandum on the impacts for claimants of increasing waiting days can be found here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/322731/ssac-memorandum-3.pdf

- Information on the timetable for the national rollout of Universal Credit can be found at http://www.turn2us.org.uk/information__resources/benefits/universal_credit/universal_credit_timetable.aspx

- All TUC press releases can be found at www.tuc.org.uk

- Follow the NWTUC on Twitter: @NWTUC

Contacts:

Media enquiries:
Jay McKenna   T: 0151 236 5432    M: 07788 414 578     E: jmckenna@tuc.org.uk