Universal Credit is "fundamentally flawed" according to a new report from the Trade Union Congress (TUC) - which says the benefit needs a major overhaul.
Some 21 changes have been put forward in a revolutionary shake-up of benefits for the Department for Work and Pensions ( DWP ).
The changes include more help for disabled and vulnerable claimants and an overall increase in payments for claimants that work.
However, the ideas are just suggestions and the DWP does not have to take them up. The TUC said it wanted to see an increase to payments and work allowances.
The union body also wants an end to sanctions and the removal of the Minimum Income Floor applied to self-employed claimants.
Since the coronavirus pandemic began the number of people claiming Universal Credit has soared by astound 90% to 5.6 million. Four years ago the TUC demanded that Universal Credit be scrapped altogether.
The TUC wanted it to be replaced with a new system that ends poverty, helps with the additional costs of childcare, disability and housing, and allows people to work the hours that fit their family circumstances.
The TUC said: "Achieving these principles requires many more changes to our current social security system than simply replacing Universal Credit.
"In particular, it is difficult to fully achieve these aims within a predominantly means-tested system of social security. Means-tested benefits are a major part of the social security system in the UK.
"Around 60% of all working-age benefits are now means tested."
The report also highlights issues with switching all existing legacy benefit claimants over to Universal Credit, which has recently started up again and will carry on until the end of 2024.
It says: "Claimants will be contacted to migrate; the process requires claimants to end an existing claim and make a completely new claim.
"It is not automatic, and the responsibility is transferred to the claimant, resulting in stress and anxiety for them."
The full list of TUC recommendations is below:
The 21 key changes needed to Universal Credit
The full list of recommended changes in the TUC report is as follows:
1. Reduce the Universal Credit taper rate further and look at options for different taper rates for different groups.
2. Work allowances need to be increased and extended to those not currently entitled to them. The second earner should have their own independent work allowance too.
3. Basic level of Universal Credit and legacy benefits, including Jobseeker's Allowance (JSA) and Employment and Support Allowance (ESA), should be raised to at least 80% of the national living wage (£260 per week).
4. Financial support for some disabled people is much lower in Universal Credit. DWP needs to offer more than the current 'transitional protection' to ensure disabled claimants get at least the amount they would have done on legacy benefits.
5. Mixed-age couples where one partner is not yet a pensioner can only claim Universal Credit, which pays less than Pension Credit. The older partner being of State Pension age should entitle the couple to be able to get Pension Credit.
6. Non-repayable grants should be available during the five-week wait for the first payment of Universal Credit, rather than advances that have to be repaid from future benefits.
7. Remove the 'punitive' Minimum Income Floor for self-employed people, which bases their benefits on the assumption they are always working 35 hours a week at the National Minimum Wage even if their earnings fluctuate.
8. Sanctions must be scrapped in favour of proper support to genuinely help people into decent work.
9. Stricter conditions on claimants who are working should be dropped in favour of investment in training and development "rather than wielding the stick of conditionality and sanctions."
10. There should be more options for claiming Universal Credit than online applications and communications, including widely available access to jobcentres for those not comfortable with IT or who do not have access to IT facilities.
11. Managed migration onto Universal Credit from other benefits should be the responsibility of the Secretary of State rather than claimants being required to carry out the transfer process themselves.
12. Transitional protection - to keep benefits at the same level when moving to Universal Credit - should be uprated rather than being frozen so it loses its value over time.
13. Employ more staff at jobcentres and service centres. The DWP announced in March 2022 it planned to close 41 sites, putting thousands of jobs at risk.
14. Review the current rules of monthly assessment periods and introduce an 'earnings disregard' into Universal Credit so that income can go up a certain amount without affecting benefit payments.
15. Introduce a three to six month assessment period to provide more stability and certainty for claimants.
16. Employees should be compensated for any errors by employers in submitting earnings details to the tax office, which can affect their Universal Credit award adversely if PAYE data is submitted late or incorrectly
17. Free school meals should be available to all those on Universal Credit. At present there is an earnings threshold in Universal Credit of £7,400 per year, creating a cliff edge.
In the long term, every child in compulsory education should be provided with free school meals.
18. Claimants should have options to be paid Universal Credit twice or four times per month to allow them to budget to suit their circumstances, rather than these being exceptional temporary arrangements.
19. Review the way Universal Credit is claimed and assessed on a household basis, rather than per person, to ensure access to the cash for both partners and the prevention of financial coercion.
20. The childcare payment system needs to be redesigned to allow the cash to be paid upfront and directly to the provider. Currently, the claimant must pay the provider themselves and get it reimbursed. In the long term, childcare needs to be free at the point of use.
21. Remove support with childcare costs from the Universal Credit amount. Attempts to simplify the system with entitlement all lumped together in one benefit payment can result in hardship if there are any problems with the claim. Also, look into which other elements can be taken out of Universal Credit and dealt with separately.
