The introduction of Universal Credit was started in 2013. The government hopes that it will bring together a range of working-age benefits into a single payment. Universal Credit is intended to:
- encourage people on benefits to start paid work or increase their hours by making sure work pays
- make it easier for people to manage the move into work
- simplify the system, making it easier for people to understand, and easier and cheaper for the government to administer
- reduce the number of people who are in work but still living in poverty
- reduce fraud and error
However, it has been fraught with problems from the beginning,
In June 2015 a court ruled that shambolic new payments for disabled people had led to unlawful delays. Iain Duncan Smith’s role as the face of harsh welfare cuts has also eroded his once-bold claims to be a champion of the poor. But despite all the wear and tear, his single biggest reform – the universal credit – is something which all the parties and pundits continue to buy into in principle. Much of the media continues to swallow, entirely uncritically, Mr Duncan Smith’s claims that this one bold move can, once and for all, make work pay for everybody.
Despite this, there is a worrying tendency for the planned reforms to operate to the disadvantage of working women. Universal credit expends considerable resources on allowing the main earner in couples – still most often the man – to keep more of what they earn, even though these are people who will often work full time irrespective of benefit rules. By contrast, a family’s second earner – still typically the woman – will often gain less than now from entering work at all, and then again for putting in an extra hour. Further special problems will dog single parents, which overwhelmingly means single mothers of course, with rent to pay. Families with large childcare bills are another problem. The Resolution Foundation invokes a non-exotic example case in which a tangle of tax, universal credit and nursery bills would reduce the effective minimum wage rate for an hour to just 20p.
If you want to find out more information, please contact our welfare rights team on their dedicated phone number +44 2871 226 550 or via our contact page.