Government moves towards new monthly benefit system

Work and Pensions Secretary Iain Duncan Smith wants the new Universal Credit to be delivered monthly, replacing mainly fortnightly payments.

Key Points

• DWP wants monthly benefits system

• New universal credit to replace existing payments

• Aim to prepare jobless claimants for work

The change is part of a raft of extra detail about the implementation of a major shake-up of the system being unveiled as the House of Lords starts to examine the legislation.

It is likely to further inflame opposition to the cost-cutting crackdown being planned by the coalition in an effort to slash £5.5 billion from the welfare bill in real terms over four years.

The legislation's centrepiece is the creation of a new universal credit to replace a complex range of existing payments such as child tax credit, housing benefit and income support.

It also imposes tougher sanctions on people who refuse work and replaces the disability living allowance with a new personal independence payment.

Serious opposition

Parts of the package have sparked serious opposition from disability groups, childcare campaigners and anti-poverty experts who claim many vulnerable people will be among the worst hit.

The Children's Society warned recently that a planned cap on the total benefits households can claim could make more than 80,000 children homeless and push many thousands more into poverty.

That came after evidence emerged of concern at a very senior level within the Department of Communities and Local Government that the move risked making 40,000 families homeless.

The Government says the aim of the Welfare Reform Bill is to "make work pay" and clamp down hard on benefit cheats, a cause Prime Minister David Cameron has personally championed.

He highlighted the changes as one of the means to tackle the causes of the recent riots in London and other English cities, suggesting they could be furthered toughened.

"With 75% of people in work being paid monthly, ministers believe it is sensible that benefits are paid in the same manner, helping claimants to get used to managing their money and bills over a four week basis to smooth the transition into work," a DWP spokesman says.

The change is likely to prove unpopular however, with experts suggesting many people are paid weekly or fortnightly and questioning whether low-income families will cope.

Writing in the Guardian last week Ruth Lister, emeritus professor of social policy at Loughborough University, said: "Research shows that many low-income families already struggle to manage inadequate budgets. To be required to do so on a monthly basis will only make it harder."