DISABLED people who move to East Lothian risk losing more than £100 a month in benefits after being moved onto the controversial Universal Credit system, it has been revealed.

The gap in payment was described by the Department for Work and Pensions (DWP) as a “by-product” of the new system during a meeting between officials from the UK Government department and East Lothian Council’s policy and performance scrutiny committee.

However, disability rights campaigners say that it is proof the Universal Credit system “is not working”.

Denise Horsfall, Universal Credit (UC) operations area director Scotland, told the council committee that the issue had been identified over the last year and work was being carried out to resolve it.

She said: “This was identified over the last year as a by-product of UC. The Secretary of State has said it will be resolved.

“If someone moves into the area and their house has been adapted to help them cope better they will lose money.”

Councillor Jim Goodfellow said that someone attended his surgery the evening before the committee’s meeting and stated this had happened.

He said: “A disabled person came to me and said they had moved into sheltered housing in East Lothian and moved onto Universal Credit and were over £100 worse off. I could not believe it.”

Michael McMahon, from Disability Agenda Scotland, said evidence has been growing that the new Universal Credit system was not working and was simply a means to cut the benefits costs.

He said: “There has always been a suspicion that the new system was about cutting the benefits bill, not as the Government claims getting people back into work.

“The employment gap for people with disabilities has not budged for a number of years.

“The system is supposed to be there to support them but, as many experts predicted, they are losing benefits without being able to find employment.

“The system is not working.”

East Lothian was the first local authority area in Scotland to roll out the UC digital service two years ago, which replaces what has been called the ‘legacy’ benefit system.

However, there were problems from the start as people found themselves waiting for up to two months for their first payment and immediately forced into rent arrears.

A report released in February revealed that two years on two-thirds of council tenants on UC were in arrears, owing nearly £1 million in total to the council.

UC was created by the UK Government as a replacement for six separate benefits: child tax credit, housing benefit, income support, jobseeker’s allowance, employment and support allowance, and working tax credit.

Payments are made directly to the individual, whereas in the past the housing benefit aspect could be paid directly to the landlord.

Ms Horsfall told the committee, which met in Haddington Town House, that some people receiving housing benefit did not realise they had to pay rent. She said: “We know some of our customers do not even recognise they pay rent, let alone that we are asking them to take responsibility for it.”