The architect of the troubled universal credit (UC) system says it could take “decades” to get it working at its most effective level.
Lord Freud defended the system to MPs holding an urgent session over fresh concerns many claimants were being pushed into rent arrears and eviction.
UC collapses all benefits into one and is being rolled out in Britain.
Work and Pensions Committee chairman Frank Field said some claimants were having their lives wrecked by UC.
He challenged Lord Freud over his claim that many UC claimants who were in rent arrears after being transferred from old-style benefits had brought their arrears with them.
Mr Field said: “People are waiting an extremely long time to get their first payments, and really bad things are happening to people.
“I do see people who have always been managers being reduced to tears.
“These are people who are have never been in this situation before and have found universal credit is wrecking their lives.”
Lord Freud, who stepped down from his post in December, said the Department of Work and Pensions had spent the past nine months tackling these issues with housing payments.
And he acknowledged that previously tight deadlines had already slipped by several years. Work began on the programme in 2010.
But Lord Freud said the system had to be introduced in order to tackle the fact that the benefit system was an “over-comfortable safety net” that kept families trapped on benefits and those who were working “wondering why they were bothering”.
He said once the “machinery” of UC was in place, it would be possible to “play with the parameters” and get more people working.
But he added:: “I think it will take some decades to optimise what we are building.
“We have once in a generation chance to do something like this, and if you do, you have to try to do it, because I think we have an impossible legacy system.”
A letter to Employment Minister Damian Hinds from the committee said evidence suggests “there remains much to be done before universal credit is working well for claimants and those organisations working with them”.
“We were concerned to hear that universal credit claimants living in rented accommodation are more likely to be in rent arrears than other tenants,” it added.
“Croydon Council told us that rent collection for council tenants in receipt of universal credit has declined from 98% to 72%.
“Whereas under 10% of tenants are claiming universal credit, they account for 38% of Croydon’s total rent arrears.
“Similarly, Halton Housing Trust reported that 920 of its 1,058 tenants claiming universal credit were in arrears.
“And while 9% of tenants claimed universal credit, they account for 37% of Halton’s rent arrears.”
The letter also expressed concern about delays in payments being made, with the average wait in Croydon being 12 weeks.
The committee said the slow pace of change was highlighted by the fact 430,000 people were claiming UC as of December 2016, despite the government originally forecasting it would be six million.
Full rollout of the benefit is now forecast in March 2022 – 11 years after it was first announced.
Shadow Employment Minister Margaret Greenwood said people struggling to make ends meet could not afford to wait for the Conservatives to get UC right.
“Universal Credit is failing to make work pay, pushing people further into rent arrears and leaving them vulnerable to eviction from private landlords.
“Ministers must get a grip on this failing project as a matter of urgency. They should start should by reversing cuts to in-work support that will see some working families worse off by £2,600 a year.”