The Welfare Trap: How Universal Credit Keeps the Poor in Their Place

The Welfare Trap: How Universal Credit Keeps the Poor in Their Place

The UK’s welfare system is often presented as a safety net, a way to support people in difficult times. In reality, it is a system built on humiliation, suspicion, and control. Universal Credit (UC) and other benefits are not designed to help people escape poverty - they are designed to make them feel ashamed for needing help in the first place.

The Culture of Suspicion

From the moment someone applies for Universal Credit, they are treated with suspicion. The application process is invasive and often dehumanising, requiring claimants to prove again and again that they are truly in need. The assumption is not that people require support due to structural inequality, job precarity, or disability, but rather that they must be scrutinised in case they are attempting to defraud the system.

According to GOV.UK, the 2023–2024 financial year welfare fraud accounts for only around 2.8% of benefit expenditure, yet the government spends disproportionate resources on surveillance, means-testing, and punitive enforcement. This culture of suspicion is reflected in the media, where right-wing newspapers frequently push misleading narratives about ‘scroungers’ and ‘fraudsters’, fuelling public resentment towards welfare claimants.

Sanctions and Conditionality: Keeping the Poor in Line

The system of sanctions within Universal Credit is one of its most punitive features. If claimants fail to meet the rigid expectations set by the Department for Work and Pensions (DWP), they can have their payments reduced or stopped altogether. People have been sanctioned for reasons as absurd as being five minutes late to a meeting, attending a funeral, or missing an appointment due to hospitalisation.

According to a 2021 report by the Trussell Trust, sanctions and delays in Universal Credit payments are among the leading causes of food bank use in the UK. Over 2.5 million emergency food parcels were distributed in that year alone, with families left destitute due to bureaucratic cruelty. Rather than recognising that financial stability is essential for securing employment or improving one’s situation, the government seems determined to make people suffer for needing help in the first place.

The Fundamental Flaws of Universal Credit

Universal Credit was introduced with the promise of simplifying the welfare system, merging six benefits into one. However, in practice, it has created a bureaucratic nightmare, disproportionately harming those who need support the most. Here are some of its biggest flaws:

1. The Five-Week Wait: Pushing People Further Into Poverty

One of the most criticised aspects of Universal Credit is the mandatory five-week wait before receiving the first payment. This delay forces many people into rent arrears, debt, and food insecurity, as they have no other financial support during this period. A 2019 study by the National Audit Office found that nearly 57% of claimants had experienced hardship due to the wait, with some turning to loan sharks or high-interest credit to survive.

The government claims that advance payments are available, but these are loans that must be repaid, trapping people in an endless cycle of financial instability. By forcing claimants into hardship as soon as they enter the system, the government ensures that those who rely on benefits are immediately placed at a disadvantage, making it even harder for them to recover.

2. Rigid Monthly Payments: Unlike the previous system, Universal Credit is paid monthly, which does not reflect the financial realities of those who are used to budgeting on a weekly or fortnightly basis. This has left many struggling to make ends meet between payments, exacerbating financial instability.

3. The Benefit Cap and Two-Child Limit: Policies that penalise low-income families

Policies such as the benefit cap, two-child limit, and the welfare cliff effect exacerbate financial hardship, particularly for larger families and single parents. The benefit cap restricts the total amount of benefits a household can receive, regardless of their actual living costs. This has led to widespread rent arrears and homelessness, with families struggling to afford basic necessities.

The two-child limit, introduced in 2017, denies additional child tax credits or Universal Credit support for third or subsequent children born after April 2017. This policy disproportionately impacts low-income families and has been widely condemned for pushing more children into poverty. The Child Poverty Action Group estimates that the policy has affected over 1.5 million children, worsening child poverty rates across the UK. Despite widespread opposition, the new Labour government has refused to scrap the two-child limit, maintaining a policy that entrenches child poverty. Additionally, Labour leadership removed the whip from MPs such as Zarah Sultana for voting against the policy, demonstrating their commitment to fiscal conservatism over social justice. This decision reflects a broader political shift, where both major parties increasingly prioritise austerity measures over meaningful welfare reform, leaving vulnerable families without support.

All these policies reflect a broader capitalist agenda to keep wages low and ensure a desperate workforce. By making welfare a barely livable option, the system pressures people into accepting exploitative, low-paid jobs, further enriching corporations and reducing labour bargaining power. Poverty is not an accident of capitalism but an essential feature that ensures there is always a vulnerable underclass willing to accept insecure, underpaid work rather than risk destitution. Additionally, the welfare system creates a perverse disincentive to earning more: as soon as individuals start earning above the benefit threshold, they face a sharp increase in tax, loss of tax credits, and additional expenses such as full rent payments or childcare costs. This 'welfare cliff effect' traps many in a cycle where taking on more work results in a net loss of income, keeping them reliant on low wages and insecure employment.

4. Complex Application and Management System: Universal Credit’s online-only application process has left many struggling to access the support they need. Those without digital literacy skills or reliable internet access are often left behind, creating an exclusionary system.

5. Harsh Sanctions and Work Requirements: Many claimants have had their benefits stopped for failing to meet stringent work search requirements, even in cases of illness, bereavement, or lack of available jobs.

The Digital Divide: A System Designed to Exclude

Universal Credit is a digital-first system, requiring claimants to manage their accounts and communicate with the DWP online. This excludes those without reliable internet access, digital literacy skills, or the ability to regularly access a computer. Older claimants, disabled people, and those in rural areas are disproportionately affected, as they struggle to navigate an impersonal and unforgiving system.

By making benefits difficult to access, the government creates yet another barrier that ensures many people simply give up or fail to complete their applications, further entrenching poverty and financial insecurity.

The Role of the Media: Manufacturing Contempt for the Poor

The media plays a significant role in shaping public attitudes towards welfare claimants. Newspapers such as The Sun and The Daily Mail regularly run stories demonising those on benefits, often focusing on extreme or misleading cases. Programmes like Benefits Street have contributed to the narrative that claimants are lazy, workshy, or undeserving.

This serves the interests of the wealthy and powerful in several ways:

1. Distraction: By making the working class resent those on benefits rather than the billionaires hoarding wealth, media narratives divert attention from real economic injustices.

2. Justification for Cuts: By portraying claimants as undeserving, the government can justify slashing welfare while cutting taxes for the rich.

3. Reinforcement of Class Divides: Keeping the working class divided between ‘strivers’ and ‘scroungers’ prevents collective action for fairer policies.

The Political Consequences: Entrenching Capitalist Inequality

The deliberate cruelty of the welfare system serves a broader political purpose: it keeps the poor poor and the rich rich. By ensuring that benefits claimants remain in a constant state of financial insecurity, the government makes it harder for people to organise, demand higher wages, or seek better working conditions. Employers benefit from this system, as desperate people are more likely to accept exploitative work out of necessity.

Meanwhile, corporate interests and wealthy individuals continue to receive tax cuts, subsidies, and loopholes that allow them to hoard wealth. According to the Institute for Fiscal Studies, the richest 10% in the UK benefit disproportionately from government tax policies, while welfare cuts disproportionately impact the poorest households. This is not a flaw of capitalism. It is how capitalism is designed to function. The rich need a permanent underclass to exploit, and welfare policies help maintain this imbalance.

The Psychological Toll: Making People Feel Worthless

The constant stress, surveillance, and precarity built into Universal Credit take a serious psychological toll. People are made to feel like criminals for being poor, as if their need for support is a moral failing rather than the result of structural inequality. The anxiety of sanctions, the pressure to prove worthiness, and the humiliation of struggling to meet basic needs all contribute to severe mental health issues, including depression and anxiety.

Instead of creating a system that empowers people to move out of poverty, the government has built one that keeps them trapped in it, financially, socially, and psychologically.

Conclusion: A System in Need of Overhaul

Universal Credit does not function as a genuine welfare system; it functions as a punishment for poverty. Every aspect of it, from sanctions to stigma, from digital exclusion to the five-week wait, is designed to make people suffer. Rather than supporting those in need, it reinforces class divides and ensures that poverty remains a cycle that is difficult to break free from.

If the government truly wanted to help people, it would replace Universal Credit with a system that prioritises dignity, security, and financial stability. Until then, the welfare state will remain what it has become: a tool of capitalist control, a source of shame, and a mechanism to keep the poor in their place.