Universal credit: the potential winners and losers

Part-time workers could lose benefits under universal credit if they don’t seek longer hours, according to a report by the Resolution Foundation think tank.

The aim of universal credit is to make work pay, but those earning less than £212.80 could be forced to seek increased hours, find a better paid job, take on an extra job or lose benefits. Up to 1.2m part-time workers could be affected, according to the think tank’s report Conditions Uncertain.

The Department for Work and Pensions says that people’s individual circumstances will be taken into account and no-one with caring responsibilities will be penalised, but the decision will be down to Job Centre advisers.

Sam Royston, a policy adviser at the Children’s Society, says the problem is that the Government has not published any detail on how advisers will make these decisions. “They have said, for instance, that people working over 16 hours should be expected to be considering how they can progress in their employment and take on more hours. The rationale is that young single people could do more hours, but the worry is that it will affect people who have got part-time jobs to fit in with their childcare.”

There is also concern about stipulations around how far from home you work. Most people looking for work will be expected to accept a job anywhere up to 90 minutes commute from home or lose benefits. “This could make a huge difference to many people with childcare responsibilities,” says Royston. “The Government says it will take individual circumstances into account, but who makes the judgements? Some are very complex. How do you ensure the system is fair?”

The Children’s Society has recently done an analysis of childcare support for working families under Universal Credit. It says 100,000 of the UK’s poorest families stand to lose as much as £4,000 a year in childcare support.

This is because they can currently claim tax credits of up to 70% of costs and cover an additional 26% of costs through housing benefit and council tax benefit. Under universal credit the money they get through housing benefit and council tax benefit will disappear. Government statistics show that around 100,000 families (about 20% of those who receive help with childcare through the benefits and tax credits system) receive this additional support.

There will be winners too under universal credit. The Children’s Society says single parents working less than 15 hours a week and couple working less than 24 hours a week will gain additional entitlement under Universal Credit.

But for those who look likely to lose out, the Society is recommending changes to universal credit, such as raising to 80% [90% for disabled children] the amount of childcare costs people can claim back through tax credits. It is also calling for a higher level of support for families living in areas of high childcare and housing costs. For a full list of the Society’ recommendations, click here.

Another concern is access to free school meals. The abolition of key benefits currently used to calculate entitlement to free school meals means that a complete new system of entitlement needs to be put in place before October 2013, it says. “This provides a key opportunity to extend free school meals to all low income, working families,” it states, arguing that the poorest people in the UK are mainly the working poor rather than those whp are wholly dependent on benefits.

Are you worried about the potential impact of universal credit on you? If so let us know by taking part in our Workingmums.co.uk poll on the WM magazine home page.

Comments [1]

  • Anonymous says:

    "They have said, for instance, that people working over 16 hours should be expected to be considering how they can progress in their employment and take on more hours."

    And who will look after my children and clean/tidy my house and do the shopping, cooking and laundry, if I am out at work 9-5, Monday-Friday? Lone parents have no-one to share these tasks with. Utterly stupid, I'm more likely to reduce my hours to under 16 than try to work 37.5 and die of exhaustion.

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