WIGAN families will face “very tough decisions” due to welfare reform.
The latest meeting of the full council heard that government changes to the benefits system will have a massive impact in the borough.
Cabinet Portfolio Holder for Housing, Coun Chris Ready, explained that claimants will be forced to wait a month for their money after registering for benefits online.
He said: “Our residents will have no money for the first month so can you imagine putting yourself in that position for one minute. No money in your pocket living on hand-outs to feed your family. I fear the next step would be loan sharks crime.”
Council tenants will face cuts to their benefits if they have spare rooms with 14 and 25 percent cuts for one or two rooms, in what has become known as bedroom tax.
The reforms aim to make the benefits system simpler by combining a range of work related benefits into one Universal Credit payment.
Wigan Council has been given pathfinder status to trial the new system before it goes national in October 2013.
Coun Ready said: “We already know that working families will be worse off under Universal Credit. Members should be reassured that people will not be worse off by being in a pathfinder pilot, they have protection.
The Labour representative for Aspull, New Springs and Whelley also outlined three anonymous case studies from Leigh, Pemberton and Ince, highlighting how each will struggle to pay for food or their bills as a result of the reforms.
He said: “In 2012 it seems unbelievable that the coalition is treating residents in this way. We now have to look at food banks as well as crisis loans.
“People who receive direct payments for care may have to make the choice whether to pay for care, housing costs, utilities, or in some cases, food.
“Individuals will have less money, they have to claim it in an unfamiliar way and need bank accounts to be paid. The council will face greater costs to collect the money and rent going direct to tenants means there is a risk we won’t get it.”