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Overcoming the 5 week wait: a discussion paper

Benefits and work

24 September 2024

A summary of the discussion paper is below. Click here 378 KB to access the full paper, or click here to access an editable Google doc version

The 5 week wait is a significant source of hardship. It means new Universal Credit claimants must experience a period without (sufficient) income – or take out a loan that leads to deductions from their regular Universal Credit payments.

This paper discusses options for eliminating the 5 week wait or mitigating its impact. Contact the author Craig Berry at craig.berry@citizensadvice.org.uk for further discussion.

The paper explores three main options for addressing the 5 week wait:

  • Providing new claim grants in place of loans; grants could be targeted on those most in need

  • Making up front rather than in arrears payments, either by default or through greater use of alternative pay arrangements

  • Keeping new claim loans, but expanding the repayment period

Introducing new claim grants would be the fairest and most effective way of overcoming the 5 week wait. This option would require additional public spending of around £1.5 billion each year; this represents 1.9% of 2023/24 expenditure on Universal Credit and legacy benefits.

Costs could be reduced by paying grants valued at less than the full monthly entitlement of Universal Credit, or by targeting grants on certain groups.

There are several options for overcoming the 5 week wait on a more fiscally neutral basis. The most straightforward would be to significantly extend the repayment period for new claim loans – claimants would still be subject to deductions from subsequent Universal Credit payments, if they want to avoid the 5 week wait, but deductions would be lower in value. However, it would remain far from ideal that many thousands of people each year would still be starting their Universal Credit claim in debt to the government.

Moving instead to up front payments would eliminate this problem. Allowing more people to choose weekly or fortnightly payments, from the first monthly assessment period, would have a similar impact, while allowing the principle of payment in arrears to be retained.

However, each of these cost-free options involve greater complexity – as well as risks to claimants that may require additional spending to mitigate.