Poverty crisis concern as number of Scots claiming benefits doubles during pandemic

It means that even without the government's job retention scheme around six per cent of Scotland's working population is relying on state benefits.

And Citizens Advice Scotland (CAS) has said that their research has revealed that one in three of those who seek help from them about Univesal Credit are actually in work.

They are today warning that working people in Scotland will face an income shock if the £20 increase to Universal Credit is not made permanent.

The soaring reliance on state benefits has come despite the fact that the furlough scheme aimed at supporting workers temporarily laid off due to the coronavirus crisis has been extended to the end of April 2021, meaning some jobs will be subsidised by the taxpayer for over a year.

Nearly 10 million jobs have already been claimed for under furlough, which pays employees placed on leave up to 80% of their salary, up to a maximum of £2,500 a month.

The scheme was due to close in October, last year and then extended to the end of March, a year after it was first introduced to support workers during lockdowns brought about by the coronavirus pandemic.

It had been extended in November at short notice, leading to complaints that employers had been forced to lay off people they might have been able to keep.

The scheme was due to close at the end of March, a year after it was first introduced to support workers during lockdowns brought about by the coronavirus pandemic. Charities and anti-poverty groups have been pushing for the Chancellor to retain a £20 per week increase to the value of Universal Credit, first announced in March, 2020, as the nation had its first taste of the coronavirus lockdown.

The support is due to come to an end from April, and CAS is among those who have called for the uplift to be made permanent.

An analysis of “complex” debt cases – where someone owes a large amount of money in relation to their income or has multiple debts – shows 58% of people in this situation are unable to meet their living costs even with the additional £20 a week.

But if the extra payment is taken away, this would rise to 80%.

CAS says that the £20 uplift was " a lifeline for people on the payment" while their analysis shows that a third of those who seek help on Universal Credit from their network are actually employed.

Since April, the network issued over 6,500 pieces of advice about Universal Credit to clients who are in part-time or full-time work.

And 2020 also saw more homeowners than usual seek help from the Citizens Advice Bureau network with Universal Credit in addition to those in social or private sector tenancies.

CAS say that mortgage payers are not entitled to any support with housing costs until 39 weeks of claiming Universal Credit. And for this group the current additional £20 a week will be making a vital contribution to covering housing costs.

The CAS analysis shows that 28 per cent of new CAB clients seeking help with Universal Credit are owner occupiers.

The charity is calling for action to both strengthen the Universal Credit system and ensure workers get a fair deal at work through adequate wages and secure hours.

CAS social justice spokesperson Nina Ballantyne said: “Universal Credit is a key element of our social security system, and the decision last spring to increase the payment by £20 a week has been a lifeline for many people during the Covid-19 pandemic.

“It’s now essential it’s retained permanently, otherwise there is a real risk more people on Universal Credit will face an income crisis, unable to meet their living costs, while our shell shocked economy is still dealing with the fallout of the pandemic.

“Universal Credit should be a safety net for people on low incomes who are in and out of work, with 1 in 3 people who come to the Citizens Advice network for help with the benefit currently in work."Cutting the increase will remove around £1,000 per year and contribute to a crisis of in-work poverty when we need to build back better.

“We already face unacceptable levels of poverty in our society, this cut could see even more people swept under the tide. Keeping the £20 a week increase, boosting pay and delivering more secure work for people will grow the economy in a fair way.

“There is still time for the Government to keep this lifeline permanently, and give people the security of knowing that their incomes will be protected beyond March 2021.”

Chancellor Rishi Sunak had been due to review the employer contribution element of the furlough scheme this month but this was brought forward.

It meant unlike earlier this year when the government started to scale back the furlough subsidy and asked companies to put in more to cover wages, they will still have to pay only national insurance and pension contributions.

Mr Sunak also announced that government-backed loan schemes designed to support stricken firms through the coronavirus crisis - which had been due to close at the end of January - would continue until the end of March.

Figures show the government's spending on the furlough scheme had risen to £46.4bn so far.

The Treasury has said that so far, the furlough scheme, officially known as the Coronavirus Job Retention Scheme (CJRS) scheme has protected 9.6 million jobs across the UK.

It also said that more than £68bn had been provided to businesses under the government's loan schemes.

But unemployment has been rising during the pandemic, with UK figures showing the jobless rate climbing to 4.9% in the three months to October and redundancies hitting a record high.

The unemployment rate in Scotland is higher for men with almost 5% looking for work from July to September, figures show.

The rate for women is 4.2% while the overall rate in Scotland remains steady at 4.5%, according to the Office for National Statistics (ONS).

Employment rose slightly to 74% over the quarter.

But the Scottish government said the figures still did not reflect the full impact of Covid-19 on employment.

A tracker of publicly-announced job cut announcements shows hospitality, retail and aviation have been the worst affected parts of the economy.

A UK government spokesman said: “We have always been committed to supporting the lowest-paid families. That’s why we have provided billions of welfare support this year, including the £170m Covid Winter Grant Scheme to help children and families stay warm and well-fed during the coldest months, and spent hundreds of billions to safeguard jobs across the UK.”