Up to 700,000 miss out on universal credit after coronavirus emergency applications, figures suggest

Around 700,000 people who applied for universal credit as the coronavirus emergency hit their livelihoods have not received any money, figures suggest.

One third of applicants for the much-criticised benefit were rejected, or withdrew applications – a rate that will have “shocked and appalled” those turning to the government to tide them over, a Labour MP says.

However, a minister accused Labour of a “feeble attempt to denigrate universal credit”, insisting more people than ever before have received help on time.

The row follows the Department for Work and Pensions (DWP) being deluged with an unprecedented two million claims for the benefit since the pandemic struck.

Claimants protested that the website ground to a crawl and that they were unable to get through on a phone line – which received a staggering 2.2 million calls on one day alone.

Now the DWP has revealed that one-third of the 800,000 applicants in the first two weeks of the emergency were unsuccessful, which means around 260,000 have received nothing.

The claims were either “closed due to ineligibility”, withdrawn, or rejected because the person had some earnings.

The DWP says it is unable to provide statistics for April and May, when – if the same rejection rate continued – the numbers missing out would have grown by around 450,000.

Officials argue some people will have “put in speculative claims”, since withdrawn, while others will have subsequently gone onto furlough schemes, making them ineligible.

But redundancy payments are counted as income, a potential reason for rejection, while savings of £16,000 disqualify people from universal credit altogether.

Critics of the benefit, which merged wage top-ups, out-of-work benefits and housing benefit into a single payment, say many first-time claimants will have been shocked at how ungenerous it is.

“Of the first 800,000 people to seek help from universal credit since the crisis began, a third got nothing. Not a penny,” said Neil Coyle, the Labour MP for Bermondsey and Old Southwark.

“This will have shocked and appalled the people claiming help, who have been working and contributing through taxes and national insurance.

“Working people deserve to know that they can rely on a functioning social security system for support if they need it. Sadly, universal credit will only continue to let them down.”

But Will Quince, the minister for welfare delivery, said: “This is yet another feeble attempt to denigrate universal credit.

“Of course, for a range of reasons, not everyone will qualify at the moment they apply – it is, however, too simplistic to jump to the conclusion that they are not supported by our safety net welfare system.”

The minister insisted universal credit was “confounding its critics”, adding: “A record proportion of those eligible for support received it in full and on time.”