Universal credit and impact on black and minority ethnic communities

Author(s): Sandhu, Kalwinder;  

Briefing series: Better Housing Briefing Paper 27

Publisher: Race Equality Foundation

Publication date: October 2016

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Universal credit and impact on black and minority ethnic communities
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Universal Credit (UC) is a means–tested, single payment for working age adults, delivered monthly to a single member of the household and paid in arrears (DWP, 2015a). The Institute for Fiscal Studies (IFS) emphasises that although the tax credit cuts will no longer occur, spending within UC will be less (Institute of Fiscal Studies, 2015).

This briefing paper summarises the details of UC, the plan for its national roll-out and the potential impact on minority ethnic communities as at January 2016.

Key messages:

  • Members of black and minority ethnic communities are likely to be disproportionately impacted by Universal Credit (UC).
  • Black and minority ethnic families are more likely to be living in poverty and therefore likely to be receiving benefits and/or tax credits. They will have lower levels of financial resources to cope with delays in payment. The move to UC will affect a disproportionate number of minority ethnic people.
  • Language barriers and higher levels of digital exclusion will mean that a disproportionate number of black and minority ethnic claimants will find it harder to apply for UC and be more likely to be sanctioned for failure to meet claimant commitments.
  • Black and minority ethnic families are larger on average, and so disproportionately impacted by UC. Consequently, reduced payments, delays in payment or sanctions will lead to an increase in the number of minority ethnic children living in poverty.
  • UC aims to incentivise people into work. However, the Work Programme has been found to be failing black and minority ethnic people. Therefore black and minority ethnic families are more likely to remain in workless households or on low and insecure employment.
Sections:
  • Context for black and minority ethnic families
  • What is Universal Credit?
  • Roll-out of Universal Credit
  • The impact of Universal Credit on black and minority ethnic communities