The climbdown on universal credit is painfully inadequate

The budget battle lines have been drawn between the Treasury, the Department for Work and Pensions and millions of people on low incomes.

Within hours of ministers taking a pasting from MPs over the rollout of universal credit, a document was leaked with a raft of proposed changes to the design and delivery of the benefit. It was hardly a coincidence, so hopefully the DWP is trying to rally support behind this reform package, in an attempt to counter Treasury resistance and gain the additional funding it will need to implement the changes.

But how much of an impact would these changes have on claimants’ living standards, and particularly those of the poorest? Not much. On first glance, while they represent a move in the right direction, that movement is far from complete. The minimum terms that need to be met, before the rollout of universal credit can continue without pushing families deeper into poverty, would not be met in full by these changes.

First, the DWP is planning to extend the payment of some benefits – income support, jobseeker’s allowance, and employment and support allowance – for two weeks after a claim for universal credit has been made. A failsafe move must be to extend these existing benefits right up to when a universal credit claim is in payment.

Second, the cap on how much the DWP claws back from claimants to repay debt on advance payments – the loans paid to cover the minimum wait of five weeks for universal credit to be paid – may be lowered from 40% of a monthly payment to 30%. This is welcome but still falls painfully short of addressing the unjust rate of repayment that tips too many people into destitution. Once the repayment of historic social security debts is factored in, the whole of a claimant’s monthly income could still be wiped out under this reform as it is now. The DWP must seek instead to agree a longer-term manageable repayment plan with each claimant over the whole of their social security debt.

Third, there may be some movement to protect the living standards of low earners in self-employment. The work and pensions committee has drawn up minimum terms of support for this vulnerable section of the workforce. Anything that falls short of those terms would again leave too many self-employed people at risk of financial ruin.

Likewise, the DWP must ensure that working parents who are eligible for childcare get that payment upfront, and that low-paid workers who are paid weekly, fortnightly or on a fluctuating basis through a zero-hours contract are protected. And it must guarantee that no disabled claimants are worse off – through the loss of severe disability premium, for example – once they have moved safely on to universal credit.

Perhaps the most crucial change mooted in the leaked document is a further delay to the migration of millions of claimants from their existing benefits on to universal credit. The DWP must use this window of opportunity to introduce further reform.

In particular, it must address the rigidity of the system itself, perhaps through the creation of a citizens’ bank, so that people who manage on a daily or weekly basis, or need to share payments between different members of the household, can draw universal credit payments down in a manner that reflects the way they live, work and save. Anything less risks further destroying their living standards. As a women’s organisation in Birkenhead recently explained to me, and I relayed to the House of Commons on Monday, universal credit has now become the main reason for some women having to work on the street.

• Frank Field is Labour MP for Birkenhead and chair of the Commons work and pensions committee