Universal Credit: a catastrophe for digitally excluded people?
This week, the Wales Co-operative Centre has published “Digital Inclusion: Stronger Communities”, a policy paper that examines the impact of digital exclusion on people in Wales and argues for a continuing specific digital inclusion project. Today we look at the impact of the Universal Credit and the importance of financial inclusion, using online tools.
The new Universal Credit system is designed for working age people to make and manage claims, themselves, online. All Jobseeker’s Allowance (JSA) claimants will have to claim online unless they are deemed to be vulnerable. There is planned support for people who cannot do this but it is unclear how effective it will be.
In a benefits system which increasingly requires claimants to respond immediately to changes in circumstances or other queries about their claim, people who can’t do this online themselves will be more likely to have benefits suspended. This could have the catastrophic impact of making the already poor, poorer still.
People who are digitally excluded and who don’t have financial inclusion support are considerably more likely to reach a point of financial crisis and turn to doorstep lenders or payday loans than those who are digitally included.
For example, benefit claimants increasingly need financial inclusion support. The impact of the Bedroom Tax has been to reduce benefits for some: the planned change to single monthly payments in arrears is to come. This means that claimants will need budgeting skills that many do not have. When people do find jobs, they face a huge change in the way they need to manage their finances. This includes living through a period where they may not have any money coming in, and having to budget for new costs such as travelling to work.
The best support will include tools only available online, for example the budget planners found on moneymadeclearwales.org. People with lower numeracy skills may find these tools easier to use than paper budgeting, where they would need to do the calculations themselves. As people start to access services online, they will need continuing digital inclusion support to ensure they use the internet safely and securely; new internet users are particularly vulnerable to online fraud.
The impact of Universal Credit on digitally excluded people could be catastrophic. Wales needs a continuing, specific digital inclusion programme with a strong financial inclusion focus.