In amongst the broader political arguments over the rollout of Universal Credit, there’s growing concern that a specific aspect of the benefit is putting claimants at risk of financial abuse. In its current form, Universal Credit is paid to a household as a single monthly payment into a sole bank account. So, as it stands, a cohabiting couple receive their entire monthly payment into just one of the couple’s bank accounts.
 
This creates unforeseen dangers, however, as Nicola Sharp-Jeffs, Director at Surviving Economic Abuse (SEA) told QIPRO: “Universal Credit seeks to reflect the modern world of work with a single payment, paid to households in arrears. However, men and women work independently and should therefore each have access to their own income. Paying Universal Credit into one bank account sets the scene for financial abuse. Financial abuse is a common tactic used by abusers to interfere with finances through control, exploitation and/or sabotage creating instability so that they do not have the resources they need to leave. Access to an independent income is vital in order to leave an abusive partner.’
 
With a leaked document last week suggesting the full rollout of Universal Credit is to be delayed once again (to December 2023), and with criticisms mounting on both sides of the house over various flaws in the system, welfare reform is clawing its way up the political agenda. Millions of existing claimants are earmarked for ‘managed migration’ to UC from as early as next summer so the stakes for the government are rising. A range of woes are being linked to UC but this month Quids in! made the unprecedented decision to actively oppose the single household payment element of UC as a direct source of domestic (financial) abuse.

Defining Financial Abuse

In the Universal Credit and Financial Abuse Report, released in June by the Women’s Budget Group, Surviving Economic Abuse & the End Violence Against Women Coalition, financial abuse is defined as: ‘Financial abuse involves a pattern of behaviour in which one partner controls the other’s ability to acquire, use and maintain money and financial resources.’ Financial abuse rarely exists in isolation, with a joint report by The Co-operative Bank and Refuge finding that 86% of those who’d experienced financial abuse had also experienced other forms of domestic abuse alongside it. Although the term is still relatively unknown to the wider public, financial abuse is thought to have been experienced by one in five adults in the UK. 60% of those affected are women, and the likelihood of experiencing financial abuse increases amongst vulnerable groups, including those with a disability.

The Political Will

The Works and Pensions Committee’s own report into Universal Credit and Domestic Abuse, released earlier this year, was itself damning of the current system. The summary of that report states: ‘DWP claims that it has no reason to be concerned about the effects of UC on survivors, but it collects no data to enable it to know for sure. We heard compelling evidence that there is a serious risk of Universal Credit increasing the powers of abusers’.

As Frank Field, the now independent MP who chairs the Work and Pensions Committee who produced the report, said in a Guardian op-ed last week, any pause in the rollout of Universal Credit should be used to fix the kind of glaring issues with the system, of which the single payment rule is one:

‘Perhaps the most crucial change mooted in the leaked document is a further delay to the migration of millions of claimants from their existing benefits on to universal credit. The DWP must use this window of opportunity to introduce further reform.’

The Current Solution (That Makes Things Worse)

The solution to the problem, as various campaigns have pointed out, is to allow UC payments to a household to be split and paid separately. This was possible in the legacy benefits that UC is designed to replace, with Child Tax Credits, as an example, being payed (by default) to the main care giver in the household. The Scottish Government have also adopted split UC payments by default in the new social security (Scotland) bill, finalised in April this year.
 
The DWP argue that Universal Credit can be split in exceptional circumstances, but the process of doing so (requesting an Alternative Payment Arrangement) currently requires survivors to disclose the abuse they’ve been subjected to, which can put them in even greater danger. In a 2015 report into potential implications of UC on financial abuse, commissioned by Women’s Aid and the TUC, a massive 85 per cent of survey respondents agreed or strongly agreed that if they requested a split payment, the abuse would worsen when their partner found out.

The Real Solution

SEA’s Nicola Sharp-Jeffs picks up on this specific point: ‘Surviving Economic Abuse is calling for separate payments to be made as a matter of routine, not split payments as an exception. Government has a duty to ensure that they system does not facilitate abuse. They must reflect this understanding by making separate payments the default position, thereby closing down opportunities to abuse and removing barriers to leaving.’
 
This line is echoed by Katie Ghose, Chief Executive of Women’s Aid, who said in response to the release of the Work and Pensions Committee report in August: ‘We urge the government to follow the report’s recommendations to collect data and evaluate how split payments are working to ensure they are delivering a safe solution for survivors. We hope the Department for Work and Pensions will work closely with the Scottish Government to develop a ‘split payment’ by default system for the future.’
 
Clearly, as a mounting chorus of expert voices agree, the option of UC being delivered in split payments shouldn’t be provided as an opt-in, but as standard practice. It’s a small tweak that can make a huge difference to many vulnerable people.  Campaigners, now joined by Quids in!, believe it’s a necessary and humane action for the government to take.