The planned tightening of the benefits system is “deeply concerning” and could have “serious negative consequences” on claimants’ mental health, according to a leading body representing psychologists in the UK.

The warning from the British Psychological Society (BPS) comes after work and pensions secretary Therese Coffey last month hailed a new government target to get 500,000 jobseekers back into work by June.

Under the existing benefits rules, individuals claiming universal credit while looking for work are given three months to find a job in their preferred sector – or face the possibility of sanctions.

But under changes expected to be ushered in next month, claimants will have to apply for roles outside their area after just four weeks. They risk having their benefits cut if they are deemed not to be making “reasonable efforts” to secure a job in any sector.

Ms Coffey said the move would ensure people can get “any job now” while critics warned it would force some skilled workers to accept insecure, short-term employment.

The devolved governments in Scotland, Wales and Northern Ireland have called on the UK government to rethink plans to end the universal credit uplift.

Chancellor Rishi Sunak plans to stop the extra £20-a-week payment in October – saying it is only temporary measure to help people through the pandemic.

But there are growing calls for it to be extended or made permanent.

Ministers from Holyrood, Cardiff and Stormont have raised concerns about the impact the cut will have on poverty.

They wrote a joint letter to Work and Pensions Secretary Therese Coffey, describing the change as the “biggest overnight reduction to a basic rate of social security since the modern welfare state began, more than 70 years ago”.

Prime Minister Boris Johnson said last week he wanted the focus to be on better paid jobs, rather than welfare. He was speaking after two Tory MPs joined calls for the uplift to be made permanent.

MPs have launched an official inquiry into universal credit amid growing concerns that design flaws in the new benefits system are leaving thousands of low-income claimants facing eviction and reliant on food banks.

The Commons work and pensions committee said it was compelled to launch a full investigation after mounting evidence that built-in payment delays and administrative blockages were creating severe problems for claimants and landlords.

A Guardian investigation this month found widespread evidence that thousands of tenants on universal credit were running up rent arrears and debts because they could not manage the minimum 42-day wait for a first payment.

Landlords have also criticised the system, with private landlords warning that they will not let to universal credit claimants because of the high risk of rent arrears and problems navigating byzantine official bureaucracy.

Surveys by housing associations have found that up to nine in 10 tenants on universal credit either run up rent arrears or increase the level of pre-existing arrears because so few are equipped to cope with long waits without income.

Frank Field MP, chair of the work and pensions committee said: “Huge delays in people receiving payments from universal credit have resulted in claimants falling into debt and rent arrears, caused health problems and led to many having to rely on food banks.”

The government’s universal credit scheme has once again slipped behind schedule and will now not be completed until 2022, five years behind its original projected finish date, officials have admitted.

Critics said the latest rescheduling – which adds 12 months to the last published planned completion date and is the seventh reset since 2013 – raised the question of whether the much-criticised welfare programme was fit for purpose.

Ironically, the delay will have the effect of providing temporary respite for millions of claimants who stood to lose thousands of pounds a year when they were removed across to universal credit from the tax credits system after July 2018.

Around 2.5 million families currently receiving working tax credits will be between £41 and £46 a week worse off under UC as a result of cuts introduced last year by the former chancellor, George Osborne, according to estimates by the Resolution Foundation thinktank.

Tackling financial exclusion effectively requires a broad range of preventative measures, including encouraging residents to join credit unions. Liverpool Housing Trust, for example, has just invested £50,000 in two credit unions and wants its own staff to join them, enabling the unions to offer as many loans as possible. In south Wales, many housing associations have adopted Moneyline, which offers affordable loans to people on low incomes, as well as basic bank and savings accounts.

Housing associations can also minimise tenants’ outgoings by helping them shop online to find the cheapest energy supplier or, in the case of Golden Gates Housing Trust, introducing solar panels to 1,500 properties to reduce energy costs.

The work can be challenging, however. In rural areas and the south Wales valleys, many bank and post office branches have closed, making it physically difficult for residents to gain access to a bank account, says Langley. Libraries where residents might use computers to access online accounts have also closed down. Some Welsh housing associations have responded by lending residents tablet computers to access the internet. Digital inclusion and financial inclusion are so closely linked.

Lack of broadband and dispersed groups of individuals makes this a more acute issue in rural communities than many people might suppose!

The government’s official independent auditors have challenged claims by the work and pensions secretary, Iain Duncan Smith, that IT problems associated with that new universal credit scheme have cost taxpayers only £41m.

The National Audit Office points out that the DWP has been forced to write down a further £91m of software assets three times more quickly than was previously envisaged.

The department said it had increased its initial write-off of its failed IT system for universal credit up to £41m. However, it said it was justifiable to declare a remaining £90m of IT software as being written down, rather than written off, because its value would be drawn down over a five-year period, by which time universal credit would have been introduced.

The NAO auditor general, Amyas Morse, said this represented “a major change in accounting treatment” and said £90m of assets were now having to be written down at a pace of £18m a year instead of the previous estimate of £6m a year.

The NAO also raises serious doubts about whether plans to introduce a new core digital software will work, or even ever grow to any size quickly