200,000 people denied universal credit because of their partner’s income

Around 200,000 people were ineligible for universal credit in lockdown because the government said their partner earned too much, a new study has found, despite struggling to afford food and falling behind on bills.

The controversial benefit system “fails to support many people facing financial strain,” academics said, after a total 500,000 people were left without state support in July and August last year despite losing at least 10 per cent of their income in the pandemic.

“The benefits system targets those struggling the most – but this misses out people who are struggling, but not quite enough to be eligible for anything,” said Dr Ben Baumberg Geiger, lead author of the report and a senior lecturer at the University of Kent.

“We need to think about how to redesign the benefits system so that it both helps those most in need and provides broader support to other people that are struggling.”

As well as those denied universal credit because of their partner’s job, another 50,000 people were ineligible for payments solely due to their migration status while 200,000 did not qualify for the benefit because of their savings.

Two fifths (40 per cent) of people ineligible for universal credit faced serious hardship, such as falling behind on bills or regularly going without fresh fruit and vegetables, while half said they experienced poor mental health.

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Around 70,000 people told researchers that they were forced to skipped some meals for at least a fortnight after their income was cut in lockdown.

“The pandemic has highlighted how universal credit currently fails to support many people facing periods of financial strain,” said David Finch, senior fellow at the Health Foundation.

“These findings show the scale of the issue and the significant impact it can have on people’s physical and mental health.

“It is vital that the government takes the opportunity to reconsider social security design to better protect against shocks to income and better support health.”

People can apply for universal credit alone or with their partner, but the Department for Work and Pensions (DWP) judges a claim based on who a person lives with and how much their partner earns, even if their partner does not share their income. 

The exact amount a person can be paid in universal credit depends on their age, location and whether they have children, but their entitlement is cut by £1 for every £1 their partner earns after income tax.

The number of households claiming universal credit doubled to six million between March 2020 and this year, accounting for more than two fifths (42 per cent) of the total 12 million claims ever made since the controversial benefit system was introduced in 2013.

Most people surveyed for the report from the Health Foundation and University of Salford had not been made redundant, but faced reduced hours after the UK first locked down – including people placed on furlough – or were self-employed and struggling for work.

“Irrespective of any changes to eligibility criteria, it should be straightforward for the DWP to offer additional guidance when telling people that they are ineligible for benefits,” said Professor Lisa Scullion, project lead and co-director of the University of Salford’s Sustainable Housing and Urban Studies Unit.

“This could include information on other benefits that they may be eligible for and other sources of financial support that may be available.”