Universal Credit - Claimants to be charged

[Gay_guy1986]

Here is the latest news on the universal credit which comes into force next year !

 

http://johnnyvoid.wordpress.com/2012/12/04/is-lord-fraud-laying-a-debt-trap-for-benefit-claimants/

[LaughingGirl]

 

I don't even know what to say. I am now COMPLETELY convinced that Cameron and his chums know that they're only going to get one term, so they're going to squeeze the pips until they get the last drop out of them while they still can. It's just blatant exploitation of the poor and vulnerable.

 

Shaking my head here.

 

EDIT: From the actual tender document:

 

protection - must be able to protect against set-off from the provider and possible mis-spending by the account holder.

To protect against ‘mis-spending and ensure that essential bills and payments are met - payments could be “ring-fenced”.

 

Who will be deciding what qualifies as 'essential'?

Edited December 5, 2012 by LaughingGirl

[down'n'out]

Is it being put forward that UC must be paid into one of these financial accounts?

 

From what I see, it appears that will be probable, with only an option to move it to another financial free product.

The claimant may use the funded period as a ‘stepping stone’ to financial inclusion and choose to move on to a mainstream ‘free’ financial product.

http://ted.europa.eu/udl?uri=TED:NOTICE:296147-2012:TEXT:EN:HTML&src=0

[LaughingGirl]

I'm not 100% sure, but I'm hoping not.

 

At the end of the initial subsidised period DWP will withdraw the subsidy. The claimant will then choose whether they wish to continue using the account, with either themselves or a third party meeting the ongoing monthly cost:

 

Who exactly is the mysterious 'third party' who will be subsidising the cost?

 

Just for the sake of clarity in my own brain - are they suggesting that claimants move from using basic bank accounts, (which currently cost the tax payer nothing to maintain), to some sort of fee paying nonsense, the cost of which will be propped up by the tax payer?

 

My mind is genuinely boggled. How the hell is this reducing the benefits bill?

[down'n'out]

Who exactly is the mysterious 'third party' who will be subsidising the cost?

From reading that contract, it looks like they think that (possibly) a landlord may make a payment, to get their rent ringfenced/paid to them.

 

Just for the sake of clarity in my own brain - are they suggesting that claimants move from using basic bank accounts, (which currently cost the tax payer nothing to maintain), to some sort of fee paying nonsense, the cost of which will be propped up by the tax payer?

I remember one of the possible problems put forward about UC payments, was that a lot of claimants do not have a bank account. That they only had a post office account and drew cash. So that was a problem. Due to the fact many may be unable to open a bank account, they proposed these "services"

The big question now is, will it be mandatory to have such an account [from these services].

 

My mind is genuinely boggled. How the hell is this reducing the benefits bill?

It is just another diversion of more money to the private sector. Just another typical day.

[osdset]

I don't think it's worth getting too worked up about this, there are a lot of if's, butts, and maybe's, not least the notion that UC won't get off the ground anytime soon, if the shambles that's Universal Job match is anything to go by then UC is a long way off.

 

It seems to me that Lord Fraud is laying the foundation for companies to offer a 'buffer' service for claimants that can't budget on monthly benefit payments the DWP would offer to pay benefits to Elastic Ltd ('we can stretch your money further!') who would then conveniently pay the claimant weekly, free for the first year. Anyone taking up this offer would quite rightly need their brains testing!

[LaughingGirl]

In the sense that I think it's unlikely to happen, no - it's probably nothing to get worked up about.

 

What bothers me is that it looks very much like another blatant scheme to squeeze more money out of poor people and divert it to the usual suspects.

 

I can't believe we have to wait two years until we vote in a different colour of self-serving muppets. This lot are getting boring and predictable.

[osdset]

What bothers me is that it looks very much like another blatant scheme to squeeze more money out of poor people and divert it to the usual suspects.

 

I think that pretty much goes without saying.

[LaughingGirl]

Look on the bright side...they'll probably balls up the tender process so badly it will end up not getting implemented until Labour get voted in at the next election - then Comedy Ed can give it a new name and repackage it as 'lending with a social conscience' or something.

[down'n'out]

I don't think it's worth getting too worked up about this, there are a lot of if's, butts, and maybe's, not least the notion that UC won't get off the ground anytime soon, if the shambles that's Universal Job match is anything to go by then UC is a long way off.

 

Ah, you mean the shambles Universal Job match that they put out anyway. The one that some JC appear to be mandating Jobseeker to, the one that also appears to be putting out automatic doubts about claimants, that shambles Universal Job match!

 

Why would the government be concerned if UC is broken when it is out. It will be the recipients of benefits who will have the main problems.

Edited December 5, 2012 by down'n'out

[worried33]

to me its designed to do 2 things.

 

make life hell for claimants by removing freedoms.

make profit for the private financial sector.

 

number 1 rule of budgeting is dont pay unneeded costs, which this is.

[estellyn]

I can see a benefit of having a system whereby, for vulnerable claimants, an agreement could be made with their bank for x amount of their universal credit payment each month to be ringfenced to a direct debit fund for paying bills, and x amount into another ringfenced pot for weekly expenses, which x amount is released for the account holder to access on, say, each Monday . It would be an easy thing for the bank to be able to set up. Having dealt with vulnerable people who cannot manage their money, and were it paid in one monthly lump sum, including housing benefit, it would all be gone in two days. There are so many people out there like this - usually people with mental health issues, milder cognitive problems (mild undiagnosed learning difficulties) or addiction issues. For these people it would be well worth paying a small fee - say £5 to £10 a month for a facility like this, to ensure that they keep their homes and keep their bills paid, and don't end up having no money for food for 3 weeks of every month. There is no way of teaching these people to budget as you and I would, and I've seen support workers have to go to extreme lengths to ensure that these peoples' money goes where it should.

 

some people can budget, but also 'know' themselves and know that if that money were just sitting available for them until it was due to be paid for a bill or rent, they would be tempted to spend it.

 

I have no problem paying someone to provide a needed service, as long as the cost is reasonable and the service is not mandatory for all. But assistance and advice will be needed to set up these arrangements. Customers would need to be very clear on what they were signing, and there would need to be an agreement made as to what is required to cancel the service, or change or add to it. So that the vulnerable - say someone who is bipolar, can't just go in the bank and cancel the agreement when they are in a manic phase, access all the funds and spend it. Personally I would also make it so that no dodgy payday loan companies can get a DD from any account with this set up on.

 

The issue I do have is if these products also include any form of lending to get people over the difficulties of switching from two weekly to monthly payments. In my opinion, the fund should be set aside by government to allow a one off interest free payment to be made, to those who need it, that is then recovered from the benefit over an extended period of time - in the same way a budgeting loan would be. And no lending facility on any of the accounts.

Edited December 5, 2012 by estellyn

[debt4get]

i actually saw this idea like this being muted at this years cons conferrence at a fringe meeting starring our very own IDS, when it was suggested by a major credit card institution that they be the main provider of cards for UC claimants, now they are not going to be doing this for 'charity' they are going to charge for the privilege, and they also wanted to control what claimants could buy with the cards, this was not to include items like alcohol and fags, but claimants would only be able to purchase necessary items!!!....

[estellyn]

i actually saw this idea like this being muted at this years cons conferrence at a fringe meeting starring our very own IDS, when it was suggested by a major credit card institution that they be the main provider of cards for UC claimants, now they are not going to be doing this for 'charity' they are going to charge for the privilege, and they also wanted to control what claimants could buy with the cards, this was not to include items like alcohol and fags, but claimants would only be able to purchase necessary items!!!....

 

Well, that is unacceptable. Help with budgeting, yes. Taking away freedom and treating adults like naughty children - no.

[LaughingGirl]

i actually saw this idea like this being muted at this years cons conferrence at a fringe meeting starring our very own IDS, when it was suggested by a major credit card institution that they be the main provider of cards for UC claimants, now they are not going to be doing this for 'charity' they are going to charge for the privilege, and they also wanted to control what claimants could buy with the cards, this was not to include items like alcohol and fags, but claimants would only be able to purchase necessary items!!!....

 

I actually remember this being debated on a BBC breakfast programme now that you mention it. I don't remember who took part in the debate, but there was one commentator who was obsessed with the idea that the unemployed spent all their money on cigarettes, beer and porn, of all things. *rolls eyes*

 

Estellyn, you're the voice of reason, and I do agree with you to an extent. There have been times in my life when I would have given my right arm for someone else to take the reins on my money. The problem is, whenever there's someone else doing it, they aren't doing it for free. I'm unemployed at the minute, and I couldn't afford to pay £10 a month (or even £5, come to that) for someone else to make my payments on my behalf.

 

I think what's sending my hackles up is the fact that it's another marriage of Government and Private Industry, and I don't think it's right. Private businesses have one aim only, and that's to make a profit. If people have conditions that make them unable to manage their cash, then I am very leery about placing them at the mercy of a corporation that is unlikely to care about anything other than the money that they can extract from them. It's open to massive abuse, in my opinion.

[Nystagmite]

i actually saw this idea like this being muted at this years cons conferrence at a fringe meeting starring our very own IDS, when it was suggested by a major credit card institution that they be the main provider of cards for UC claimants, now they are not going to be doing this for 'charity' they are going to charge for the privilege, and they also wanted to control what claimants could buy with the cards, this was not to include items like alcohol and fags, but claimants would only be able to purchase necessary items!!!....

 

And what's classed as "necessary"? Is me getting taxis 2-3 times a week necessary? Yes,, I can walk; but it's not safe.

[osdset]

Government control of every aspect of our lives (if you happen to be at the bottom of the food chain), if you want to know just how the system works for the privileged in society watch this http://www.bbc.co.uk/iplayer/episode/p010jx3m/Why_Poverty_Park_Avenue_Money_Power_and_the_American_Dream/

 

Swap Park Avenue with Belgravia, swap the American dream with the Condems 'work ethic', look at the parallels between what has happened to the unions in the US and here, the US and the UK are thousands of miles apart geographically but with a shared ideology, it's a brave new world for the 1%

[Farbramble]

As a side note; do claimants have to pay back hardship allowance under UC?

[estellyn]

I actually remember this being debated on a BBC breakfast programme now that you mention it. I don't remember who took part in the debate, but there was one commentator who was obsessed with the idea that the unemployed spent all their money on cigarettes, beer and porn, of all things. *rolls eyes*

 

Estellyn, you're the voice of reason, and I do agree with you to an extent. There have been times in my life when I would have given my right arm for someone else to take the reins on my money. The problem is, whenever there's someone else doing it, they aren't doing it for free. I'm unemployed at the minute, and I couldn't afford to pay £10 a month (or even £5, come to that) for someone else to make my payments on my behalf.

 

I think what's sending my hackles up is the fact that it's another marriage of Government and Private Industry, and I don't think it's right. Private businesses have one aim only, and that's to make a profit. If people have conditions that make them unable to manage their cash, then I am very leery about placing them at the mercy of a corporation that is unlikely to care about anything other than the money that they can extract from them. It's open to massive abuse, in my opinion.

 

It would be an easy enough thing for banks to set up as part of a basic bank account, and frankly if a bank set it up using the £145million of government money, there would be no need to charge for it - it is just setting up a very basic system of ringfencing money within an account, and thinking about it, surely it would pay for itself - imagine being the main provider of UC ringfence accounts, lots of people with post office accounts will be transferring and maybe others from other banks - and they won't be taking all the cash out on the day it goes in, they actually want the bank to hold the money for specified periods of time - all that extra money for the bank to get a return on. Though knowing the government, they won't award the contract to the provider who can make it free to access, but to the provider wo can do it for the least amount of money to the government - isn't that how they award these things, not the best, but the cheapest.

 

But yes, it is open to abuse, particularly if they go with a card system, and include a lending facility, or start giving creditors guarantees - for instance instead of authorising ringfencing with the provider, you sign a form with a creditor. Now this is fine for essential payments like electric, gas, water, council tax - but if you then start giving this facility to companies like payday loan companies or brighthouse or others like them, then vulnerable people are going to be without money to buy food. And don't get me started on the concept of controlling what people can purchase! Though I don't see how that would work, as they would still need to allow people to access cash, and then could buy what they want with cash. And what about payments from the card account? I just hope it won't be like current pre paid cards where the person is charged for every transaction, that would be so, so bad.

[LaughingGirl]

Funny you should mention the pre-pay cards, because that is exactly where I bet this is going. Claimants will have to call their 'bank', probably using an 0845 number in order to have whatever cash they have left after the ring fenced payments are taken, loaded onto their card. Then you can add on the monthly management fee, probably around £5.00.

 

I can see it coming, I really can. There's no way someone isn't going to cream an excessive profit off this - they've got a captive audience.

[estellyn]

Funny you should mention the pre-pay cards, because that is exactly where I bet this is going. Claimants will have to call their 'bank', probably using an 0845 number in order to have whatever cash they have left after the ring fenced payments are taken, loaded onto their card. Then you can add on the monthly management fee, probably around £5.00.

 

I can see it coming, I really can. There's no way someone isn't going to cream an excessive profit off this - they've got a captive audience.

 

Only politicians could take a good idea that could help people and be free to access, and turn it into a profit making enterprise for a private company to the individual's detriment.

[LaughingGirl]

God forbid everyone suddenly become solvent and free of worry, eh? Only banks and Governments are allowed to sleep at night when they owe everyone and their dog money.

[estellyn]

God forbid everyone suddenly become solvent and free of worry, eh? Only banks and Governments are allowed to sleep at night when they owe everyone and their dog money.

 

So true!

[worried33]

estellyn I have money in my bank the majority of the time, so eg. having one monthly payment instead of 2 fortnightly payments wont make any huge difference, because i can budget.

 

in a month or so I will be relying on help for food due to 1/3 of my housing benefit been taken away (not because I cant budget).

 

if the day comes where any benefit I am entitled to has to go via some kind of financial company as ceases to be under my control that will be the day when the DWP beat me and I wil close my claim, I wont be treated like an infantile.

 

No idea what I will do to survive if that happens most likely I expect my sister taking me in.

[estellyn]

estellyn I have money in my bank the majority of the time, so eg. having one monthly payment instead of 2 fortnightly payments wont make any huge difference, because i can budget.

 

in a month or so I will be relying on help for food due to 1/3 of my housing benefit been taken away (not because I cant budget).

 

if the day comes where any benefit I am entitled to has to go via some kind of financial company as ceases to be under my control that will be the day when the DWP beat me and I wil close my claim, I wont be treated like an infantile.

 

No idea what I will do to survive if that happens most likely I expect my sister taking me in.

 

I don't think they can make the product mandatory, anf if turns into a version of a prepaid card with fees, then it's going to be useless anyway.