MPs warn of 2013 welfare nightmare

Work and Pensions Secretary Iain Duncan Smith has placed the scheme at the centre of his welfare "reforms" - code for cuts - and wants it brought in next October.

But the scheme has been dogged by problems.

Now MPs on the Commons work and pensions committee have raised "serious concerns" that thousands of vulnerable people will be unable to cope with the switch from a range of weekly benefits to a single monthly payout.

Many will have problems getting to grips with the planned online system to receive the credit, MPs added.

And they warned that, with housing benefits one of the payouts being rolled into the "universal" credit, thousands of claimants could fall behind with their rent when the plans come in.

That's because the cash for rent will be paid in full into claimants' bank accounts instead of going straight to landlords as currently happens.

National Housing Federation chief executive David Orr demanded the Department of Work and Pensions delay its plans to give people the choice of continuing to have their rental payments made directly to landlords.

He said: "Our research shows that one million social housing residents risk falling into debt if all their benefits are paid to them directly in a single monthly payment and will need extra support to manage their budgets when universal credit is phased in next year."

Work and pensions committee chairwoman Dame Anne Begg also said the plans needed "significant furhter work" and advised the government to consider delaying their launch.

A DWP spokeswoman said steps would be taken to ensure that vulnerable people do not suffer.