Homelessness and Universal Credit: research report

A range of literature indicates that various features of Universal Credit can result in homelessness and a number of correlations between homelessness and Universal Credit can be observed in the data.

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1. Scottish Government, May 2019, Housing and social security: follow-up paper on welfare reform; Scottish Government, January 2020, Welfare reform - housing and social security: second follow-up paper

2. These are Income Support; Income-based Jobseeker's Allowance (JSA); Income-related Employment and Support Allowance (ESA); Housing Benefit; Child Tax Credit; and Working Tax Credit. Contribution-based versions of these benefits have not been affected.

3. Scottish Government, August 2020, Homelessness in Scotland: 2019-20, page 8

4. Scottish Government, December 2020, Housing statistics quarterly update, Chart 3

5. Shelter, July 2019, The impact of arrear security in Scotland

6. Cheetham M, Moffatt S, Addison M, et al., 2019, Impact of Universal Credit in North East England: aqualitative study of claimants and support staff, British Medical Journal

7. Wickham, S. et al., 2020, Effects on mental health of a UK welfare reform, Universal Credit: a longitudinal controlled study, The Lancet Public Health

8. Respondents can only select one main reason for making a homelessness application, whereas they are able to select multiple additional reasons for failing to maintain accommodation prior to making an application.

9. Scottish Government, September 2019, Housing statistics 2019: key trends summary

10. Crisis, February 2019, The homelessness monitor: Scotland 2019, page 82

11. Dwyer, P., 2018, Punitive and ineffective: benefit sanctions within social security, Journal of Social Security Law

12. Crisis, 2015, Homeless people's experiences of welfare conditionality and benefit sanctions (2015), page 20

13. Frontline Network, 2020, Annual Frontline Worker Survey 2019, page 14

14. Centre for Analysis of Social Exclusion, February 2021, The Conservative Government's Record on Social Security: Policies, Spending, and Outcomes, May 2015 to pre-Covid 2020, page 62

15. North East Homelessness Think Tank, 2015, Benefit sanctions and homelessness, pages 28, 32

16. Resolution Foundation, June 2019, An intergenerational audit for the UK

17. To the extent that the correlation does reflect a causational link from UC to homelessness, it could also be driven by other aspects of UC. However, the correlation between homelessness and receipt of UC is less strong, and not statistically significant even at a 90% confidence level. By contrast the correlation between UC sanctions and homelessness is statistically significant at a 95% confidence level.

18. The correlation coefficient on Figure 7 is 0.41, compared to 0.51 on Figure 8. Both are statistically significant at a 95% confidence level (the correlation in Figure 8 is also significant at a 99% confidence level).

19. Crisis, February 2019, The homelessness monitor: Scotland 2019, page 53.

20. JSA is arguably a superior comparator since sanction rates under UC are highest for those searching for work.

21. Based on data from Stat-Xplore. The projection for 2020/21 uses figures on number of new claimant households and average payment amounts up to October 2020 (the latest month of data) with November 2020 to March 2021 estimated based on average figures between June and October. The assumption here is that the spike in the UC caseload in April and May was exceptional and will not be repeated before April 2021. Note that for households moving onto Universal Credit from Housing Benefit, the impact of the five-week wait is partially offset by a two-week run-on payment.

22. Trussell Trust, September 2019, Five weeks too long: why we need to end the wait for Universal Credit

23. Trade Unions Congress, November 2020, Universal Credit and the impact of the five week wait for payment

24. Centre for Analysis of Social Exclusion, February 2021, The Conservative Government's Record on Social Security: Policies, Spending, and Outcomes, May 2015 to pre-Covid 2020, page 56

25. House of Commons Work and Pensions Committee, October 2020, Universal Credit: the wait for a first payment, page 12

26. Scottish Government, January 2020, Welfare reform - housing and social security: second follow-up paper

27. Shelter, February 2020, Briefing: Westminster Hall Debate on Local Housing Allowance (LHA) rates and homelessness, page 3. The UK Government has however introduced exemptions from the 'Shared Accommodation Rate' for groups at risk of homelessness, enabling rough sleepers aged 16-24, care leavers up to the age of 25, and victims of domestic abuse and human trafficking to live on their own.

28. DWP, Stat-Xplore.

29. This estimate has been produced with the UKMOD microsimulation model, based on the latest three years of the Family Resources Survey, the latest macroeconomics forecasts from the OBR, and the latest policy announcements made by the UK and Scottish governments at the time of writing. For a more detailed description of the model, see Centre for Microsimulation and Policy Analysis, September 2020, UKMOD/EUROMOD Country Report.

30. Social Security Committee, June 2019, Social Security Support for Housing, page 25

31. Scottish Government, November 2020, Discretionary Housing Payments in Scotland: as at 30 September 2020

32. House of Commons Work and Pensions Select Committee, August 2018, Universal Credit and domestic abuse

33. Johnsen S and Watts B, July 2014, Homelessness and poverty: reviewing the links

34. For example, a single person in the UK who had been unemployed for three months would receive only 34% of their previous income, assuming they were earning the average wage. This is one of the lowest 'replacement rates' in the OECD, with only Australia and Greece offering lower rates, and significantly below the OECD average of 58%. OECD, Net replacement rates in unemployment

35. Brewer M and Valentinova Tasseva I, June 2020, Did the UK policy response to Covid-19 protect household incomes?

36. Scottish Government, October 2020, Ending homelessness together: updated action plan

37. Resolution Foundation, February 2021, Getting ahead on falling behind: tackling the UK's building arrears crisis

38. Institute for Fiscal Studies, June 2020, The mental health effects of the first two months of lockdown and social distancing during the Covid-19 pandemic in the UK. See also the ongoing Covid-19 Social Study by University College London


Email: spencer.thompson@gov.scot

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