Refugees in the UK are being driven into “almost inevitable destitution” as the roll-out of universal credit fails to work with the current asylum system, a major charity has warned.

The British Red Cross said the government’s flagship welfare reform was leaving newly recognised refugees facing an “inescapable trap of destitution and indignity” as the built-in payment delay is longer than the period they are given to leave asylum accommodation and apply for mainstream benefits.

The Home Office currently gives new refugees only 28 days to vacate asylum accommodation, known as the “move-on period”. Universal credit meanwhile has an inbuilt delay of 35 days between an application being submitted and the first payment.

The charity is urging the government to extend the “move-on period” for refugees from 28 days to 56 days, so that refugees are given the chance they need to build a life in Britain and contribute to society.

Alex Fraser, director of refugee support at British Red Cross, said: “The design of our current asylum system, and its incompatibility with universal credit, leaves newly recognised refugees facing an almost inescapable trap of destitution and indignity instead of a positive journey towards integration and independence.”

The warning marks the latest in a string of concerns about the new benefit system. A recent report revealed that people with disabilities and other vulnerabilities had been driven to severe hardship and anxiety – and sometimes suicidal thoughts – after their support was docked.

Last week a report warned the universal credit system was leaving claimants dependent on charities for their food and putting them into rent arrears.

Southwark Council said radical steps should be taken by ministers to fix the problems.

A government spokesperson said it was committed to supporting refugees and asylum seekers and that it would carefully consider the recommendations of the report.

“We want to ensure the move to universal credit is as smooth as possible and the Department for Work and Pensions (DWP) and the Home Office are working together to ensure necessary benefits can be claimed promptly,” the spokesperson said.

“We are working on a number of initiatives to secure better outcomes for refugees within the 28-day move on period. And we welcome the report’s findings that the majority of refugees find accommodation through local authorities after asylum support ends.”

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