THOUSANDS of people will be plunged into debt under a new system that pays all benefits as a monthly lump sum, a Sheffield financial expert claims.
The Government’s proposed universal credit will see households receive one payment to cover all outgoings.
It will replace jobseeker’s allowance, tax credits, income support, employment and support allowance and housing benefits.
At present many benefits are weekly or fortnightly and paid directly to organisations like Sheffield Homes.
But Jackie Hallewell, of Sheffield Credit Union, says the ‘fallout is going to be massive’ as people with little or no financial experience, chaotic lives or learning difficulties suddenly have to manage their money.
“Evictions and homelessness will increase, many more people will depend on food banks, there will be a huge increase in people falling into rent arrears.
“It’s making people very worried and very scared. We already know how difficult some people find it now – it will have a massive impact. The whole advice sector in Sheffield has huge concerns.”
Universal credit is set to come in for new claimants from October 2013 and all existing claimants will be transferred by 2017.
But since April, housing benefits have been paid directly to some claimants, with all receiving them by next April.
Ms Hallewell said non-payment was already rising and landlords were expecting the problem to grow’hugely.’
Sheffield Credit Union, on Commercial Street in the city centre, is a not-for-profit savings and loan co-operative. Call 0114 2760787.