BIRKENHEAD MP Frank Field has described the Government's refusal to ditch a policy making the recently unemployed wait up to six weeks before receiving a benefit payment as "lunacy."

A report published today by the Social Security Advisory Committee warns Universal Credit will deal a "demoralising blow" to people who have just lost their job.

Based on "persuasive and compelling evidence" presented to the committee, it recommends the proposal to introduce a waiting days rule should not proceed.

The Government said it does not accept the recommendation.

Frank Field warned the coalition last year that introducing the waiting measure would make it a "recruiting sergeant for payday lenders and food banks" by pushing hundreds of thousands of people into hardship.

He urged the Department for Work and Pensions to seriously rethink the proposal and to improve the administration of working-age benefits.

He said: "The idea that people are able to wait six weeks for their first benefit payment after losing their job or being made homeless is lunacy.

"Today’s report presents a colossal weight of evidence showing why nobody could seriously justify making people wait so long at a time of need.

"The Government must take a long, hard look at this report and immediately act on its findings, to prevent serious hardship occurring down the line."

The report warns if the "seven day rule" goes ahead it will have the following consequences before a payment arrives:

People may have used any savings that they had. For them, having to serve waiting days will come as a further "demoralising blow."

The self-employed and the homeless are particularly likely to experience hardship.

The impact of losing the entirety of one’s benefit for a full week, coupled with an initial wait of up to six weeks for a first payment, would require "serious mitigating measures."

Having to serve waiting days for a benefit that includes other costs, in particular housing, puts the measure "beyond reasonable justification."

The Government responded: "The committee is particularly concerned about the effect of serving waiting days on people who don’t have resources to fall back on.

"The Government shares this concern and this is why we have focussed the policy on those claimants who are coming from the world of employment and who will enter the 'All Work Related Requirements Group' [unemployed and capable of work] and who are likely to have earnings to fall back on.

"The regulations include a number of important exemptions to safeguard vulnerable groups who would otherwise be affected by this measure."

It said the fundamental principle behind the waiting days policy is that social security is not designed to provide cover for moving between jobs or brief spells of unemployment.

The rule will generate estimated savings of around £150m per year once Universal Credit has been rolled out. 

These savings will fund measures to get people off benefit and into work "and will particularly help those who are likely to be long-term benefit recipients."