THE government must “face up to the fact” that its loan system for new benefit claimants to get them through the five-week wait for universal credit is “not working,” MPs said today. 

New claimants must wait five weeks to receive their first universal credit payments, with people turning to foodbanks and falling into debt with rent and bills during that period.  

After claimants make an initial claim they can access advance loans of up to 100 per cent of the benefit, but this must be repaid over the next 12 months, eating into already small sums of money. 

The cross-party work and pensions committee is calling for new starter payments to be made available to prevent people tumbling into poverty while they wait. 

The MPs released a report saying that the payment should be the equivalent to three weeks of the standard allowance and paid two weeks after the initial claim is made.

Committee chairman and Labour MP Stephen Timms said the government has left people “facing the toughest of choices: go without income for at least five weeks, or have repayments subtracted from their future universal credit payments — which are already barely enough to get by on.”

Research by Citizens Advice over the summer found that half of people who had applied for universal credit during the lockdown were experiencing economic hardship during the five-week wait. 

The charity said claimants had reported skipping meals and selling personal possessions to stay afloat, while many said they were “too scared” to take out an advance loan. 

Chief executive Gillian Guy said the government must provide additional security during this time, “particularly with people facing a difficult labour market.”

The MPs’ report also recommended that the £20 increase to universal credit, introduced to help people struggling during the Covid-19 crisis, should stay beyond April. 

The committee said that prior to the outbreak, the benefit payments “had become detached from the real cost of living.” 

A Department for Work and Pensions spokeswoman said: “With universal credit no-one has to wait five weeks to be paid, as urgent advances are available — since the start of the pandemic more than two million payments have been made to new claimants within days of being requested.”