Benefits card plan explained: who could lose Universal Credit and how does booze and fags ban work?
Some Universal Credit claimants could be blocked from spending benefits on alcohol, cigarettes and gambling under new Conservative plans. Here’s who could be affected and how the proposed card would work.
Benefits claimants could face a 30% cut in payments and be blocked from spending welfare money on alcohol, cigarettes and gambling under new Conservative plans.
The eye-catching proposals are designed to help the Tories set the political agenda ahead of their annual conference opening in Birmingham on October 4.
But the plans would not apply to everyone on Universal Credit – and none of these changes is currently in force.
So who could actually lose money, who would get the proposed benefits card and who would be exempt?
What are the Conservatives proposing?
Under the plans, someone who loses their job could receive the full standard rate of Universal Credit for six months while looking for work.
After that, entitlement to the full rate would depend on their previous work record. The Conservatives say every two years spent working would earn an additional year at the full rate.
People who had not built up enough qualifying years could instead receive a new “subsistence allowance” worth 70p for every £1 of the full standard payment – effectively a 30% cut.
Would benefits really be put on a card?
Yes, for people moved onto the proposed lower rate.
Their money would be loaded onto a “back to work” pre-payment card which could be used for food, everyday essentials and bills.
But it would block spending on alcohol and cigarettes, gambling transactions and cash withdrawals.
Who would be exempt?
The Conservatives say people who are disabled, off work because of illness or claiming Universal Credit while working would not be affected.
Universal Credit is not simply an unemployment benefit. Under current rules, it can also be claimed by people who are working or unable to work because of a health condition.
Is this happening now?
No. These are Conservative Party proposals, not the current Universal Credit rules.
Claimants can already have payments reduced through sanctions if they fail to meet agreed work-related requirements without good reason, but that is different from the proposed restricted spending card.
How many people could be affected?
The Conservatives estimate around 350,000 people could move onto the lower allowance and say the reforms could save £538 million a year.
Those are party estimates, rather than confirmed savings from a policy already in force.