People will be able to call the government’s universal credit helpline without being charged, within weeks.
Prime Minister Theresa May said she had listened to criticism of the charges, which can be up to 55p a minute, and decided it was “right” to drop them.
But she again rejected calls by Labour leader Jeremy Corbyn to “pause” the roll-out of the controversial benefit amid fears it is causing hardship.
MPs are currently debating Labour’s call for a rethink.
Universal credit, which rolls six working-age benefits into a single payment, is designed to make the system simpler and ensure no-one faces a situation where they would be better off claiming benefits than working.
But it has faced a backlash from a dozen Conservative MPs, who fear payment delays risk pushing families into destitution.
Mrs May met a group of concerned MPs in Downing Street ahead of the Commons debate, amid speculation they could vote with Labour.
Any vote will be purely symbolic and not binding on the government but it could increase pressure on Mrs May to do a U-turn.
At Prime Minister’s Questions, Mr Corbyn said he was glad the PM had “bowed to Labour pressure” by scrapping the hotline charges.
But he added: “The fundamental problems of universal credit remain – the six week wait, rising indebtedness, rent arrears and evictions.
“Will the prime minister now pause universal credit and fix the problems before pressing ahead with the roll-out?”
Mrs May prompted cheers from Labour MPs as she began her reply with “yes”, before urging them to “listen to the whole sentence I was going to make”.
She said universal credit was “a simpler system”, that “encourages people to get into the workplace – it is a system that is working because more people are getting into work”.
The universal credit hotline will become free to use “over the next month”, the government has said, and that would be followed by all DWP helplines by the end of the year. The government says it makes no money from the 0345 number.
Universal Credit has been introduced in stages to different groups of claimants over the past four years, with about 610,000 people now receiving it.
Almost a quarter of all claimants have had to wait more than six weeks to receive their first payment in full because of errors and problems evidencing claims.
But the government recently approved a major extension of the programme to a further 45 job centres across the country, with another 50 to be added each month.
How does it work?
There is no limit to the number of hours you can work per week if you get universal credit, but your payment reduces gradually as you earn more.
Under the old system many faced a “cliff edge”, where people on a low income would lose all their benefits at once as soon as they started working more than 16 hours. In the new system, benefit payments are reduced at a consistent rate as income and earnings increase.
A six-week wait is built into the system.
Because universal credit is based on how much money you have each month, it is paid in arrears – people claiming the benefit receive money for the last month worked, not for the month ahead.
That means everyone has to wait at least four weeks, and the rest of the time is because of the way the scheme is administered.
The Department for Work and Pensions says its latest data, from last month, indicates 81% of new claimants were paid in full and on time at the end of their first assessment while 89% received some payment.
Cases of non-payment, it said, were due to claimants either not signing paperwork, not passing identity checks or facing “verification issues” such as providing details of their earnings, housing costs and childcare costs.
BBC Newsnight’s political editor Nick Watt said he understood ministers were giving “serious thought” to cutting the initial waiting period for payments from six to four weeks around the time of next month’s Budget.
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