MORE people will end up using food banks and relying on loan sharks, because of a planned change in how people receive benefits, Derby City Council has warned.
A report from the Labour-led authority states that it "fundamentally disagrees" with the Coalition Government's proposal, which would see people having to wait seven days after their claim before they receive benefits. That gap is currently three days.
The move comes as the Government introduces Universal Credit, which involves bringing together working-age benefits, such as jobseeker's allowance, into one single monthly payment for each household.
It will be rolled across the country from February next year but it is not yet known when exactly it will be introduced in Derbyshire.
In the meantime, the Government is consulting its seven-day gap plan which it says will save £200 million a year from 2016-17 onwards.
In its response to the consultation, the city council says the proposals "would have a severely detrimental effect on claimants".
It says: "Anticipated impacts would be increased levels of indebtedness and poverty in the community, increased use of food banks to cover the waiting period, and an increase in the use of payday lenders and loan sharks in order to get money to cover basic living costs."
The council also says that the delay would mean an "increase in the non-payment of Council Tax and rent" and that "money put aside to pay for these priority bills could be spent instead on basic living costs".
The authority recommends that the list of groups exempt from the seven-day gap is extended to include "those in receipt of Personal Independence Payments or Disability Living Allowance and those in the support group of Employment and Support Allowance."
The council also believes the delay will mean more costs for local government as already stretched systems have to deal with the impact the cuts are having.
The DWP spokesman said the changes were brought in because of a need to "make work pay" and that applicants could get advanced payments in some cases.
He added: "Universal Credit is a vital reform that will simplify the benefits system and make work pay.
"The seven-day waiting period for benefits is not limited to Universal Credit but will apply to out-of-work benefits under the current system too.
"People can apply for an advanced benefit payment if needed.
"Paying benefits monthly is an important part of Universal Credit because it replicates the world of work and makes the transition to employment much smoother."
