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Page last updated at 13:09 GMT, Saturday, 11 April 2009 14:09 UK

Stop benefit change, say Lib Dems

By Paul Lewis
BBC Radio 4's Money Box

Men standing outside a job centre in Chatham, Kent
People will be offered a loan which they can pay back over 12 weeks

A top Liberal Democrat has called on the government to cancel changes which will leave millions without their social security benefit for a week.

Lone parents, widows, disabled and unemployed people paid weekly are to move to fortnightly payments.

The Department for Work and Pensions says no-one will lose out as they will be offered a loan to cover the gap.

But Steve Webb MP says he will ask Parliament to reverse the change when MPs return after Easter.

The Liberal Democrat shadow secretary of state told BBC Radio 4's Money Box: "I was appalled when I heard the department was going to change the rules. It is driven by bureaucrats.

"The whole thing is going to cause huge disruption to people who are already having a hard time.

"There will be additional hassle as they apply for a loan to get the money they thought they were going to get anyway and then will be worse off for 12 weeks while they repay it."

For someone on basic Jobseeker's Allowance of £64.30 a week, it would mean a deduction from their benefit of £5.35 a week for 12 weeks.

'Crazy'

About 120,000 widows who are currently paid weekly in advance will be moved in two stages - first to weekly payments in arrears when they will be given an extra week's benefit to cover the gap.

And secondly to fortnightly in arrears when they will be offered the loan.

We have tried to work out a system where we are simplifying it in a way that causes minimum disruption
DWP Minister Rosie Winterton

Rosie Winterton, Minister of State at the Department for Work and Pensions told Money Box: "No-one will lose out as a result of the change but we want to make the [payment] process simpler and through that improve the service to customers.

"We are moving to how most people in work are in paid - in arrears."

And she said the loan would be affordable: "It is paid back in a very gradual way. What we have tried to do is work out a system where we are simplifying it in a way that causes minimum disruption."

But Steve Webb said: "Lib Dems will be pressing for them to stop this change. We've got two years of hassle for people and Parliament has to say 'this is crazy, stop it'".

The process of converting people began on 6 April and will continue over two years up to 31 March 2011.

The new system has applied to all new claims from 6 April 2009.

BBC Radio 4's Money Box will be broadcast on Saturday 11 April 2009 at 1204 BST.

The programme was repeated on Sunday 12 April 2009 at 2102 BST.



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