Universal Credit misery has barely begun as more than half of claimants are still on the old benefits

The chaos and misery caused by Universal Credit has hardly begun, new figures show.

There are 72,000 people in the North East claiming Universal Credit - but another 175,000 people in the region are still claiming older benefits and will be moved on to Universal Credit in years to come.

And MPs warn today that many claimants who move to the new system suddenly find their benefits have been cut, with an average loss of £59 a week or around £3000 a year.

A report by the House of Commons Work and Pensions Committee said: “Some of the groups affected include: families with a disabled child, who stand to lose £30 a week; some disabled claimants will see a drop in entitlement of £70 a month; and the self-employed, who stand to lose as much as £8000 a year.”

New benefit claimants now receive Universal Credit instead of benefits such as Housing Benefit, income-related Employment and Support Allowance (ESA), income-based Jobseeker’s Allowance (JSA). Child Tax Credit. Working Tax Credit and Income Support. However, the number of people still receiving the older benefits is far higher.

Some people find that they have been switched to the new benefit when their circumstances change. And the MPs warned that in some cases this led to a “cruel” cut in income when people were vulnerable.

They said: “For example, a disabled claimant who moves home could lose their disability premiums, even though their disability remains the same.”

People could also moved on to Universal Credit because their wife, husband or partner had died, which is classed as a change in circumstances.

And the MPs warned: “While some people are entitled to more money under Universal Credit than they would have received in the previous benefits system, many will be entitled to less.”

They said: “Many claimants will see a drop in their entitlement under UC compared to the legacy system, with an average loss of £59 a week or around £3000 a year.”

Some claimants, however, will find their incomes increase under the new system. For example, working people who rent their home tend to gain.

MPs also highlighted a comment made by a senior Department for Work and Pensions official who revealed the department has a policy of ensuring that once a person is on Universal Credit there is no way back on to the older benefits - and calls this the “lobster-pot” principle.

Work and Pensions Secretary Amber Rudd last week admitted Universal Credit was pushing some people into debt, said claimants should receive their money faster.

In an interview with website Politico, she said: “I want to make sure that people who need benefits, particularly people who are coming onto Universal Credit from other benefits — so they are already dependent on a monthly pay — can have access to the money as soon as possible.”

North West Durham Labour MP Laura Pidcock, who has led campaigns against Universal Credit, said: “At last the Secretary of State is finally recognising that the 5 week wait for Universal Credit is too long, when people at the sharp end of the system have been saying for years now that the repayment of advances is causing extreme hardship.

“Now we need firm proposals on how and when people will receive a payment and how they will be protected from the worrying frauds and scams recently reported.

“The 5 week wait is only one of the many serious flaws of Universal Credit; the rate of deductions is a disgrace, the earnings rules are confusing and inflexible, the threat of sanctions is used to instil fear and fundamentally, many people, especially young people and disabled people, don’t even have enough money for the basic essentials. The whole system is not fit for purpose.”

A Department for Work and Pensions spokesperson said: "Universal Credit helps people into work faster than the old system and provides targeted support.

"Around one million disabled households will gain an average of £100 more a month, and changes to work allowances mean 2.4 million households will be up to £630 per year better off."

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A number of bodies have highlighted the problems caused by Universal Credit.

A report from Gateshead-based charity Changing Lives, which conducted a study of sex work in Durham and Darlington and found that some of the women interviewed “work to supplement their benefits in exchange for drugs and alcohol and to secure accommodation, however precarious.”

The problem was also raised by a United Nations inquiry into poverty in Newcastle and other parts of the UK.

Professor Philip Alston, United Nations Special Rapporteur on extreme poverty and human rights, said in a shocking report: “I have talked with people who depend on food banks and charities for their next meal, who are sleeping on friends’ couches because they are homeless and don’t have a safe place for their children to sleep, who have sold sex for money or shelter.”

His findings were based on visits to Belfast, Bristol, Cardiff, Edinburgh, Essex, Glasgow, Jaywick, London, and Newcastle.