Hundreds of thousands of low-income working families will be worse off, and in many instances cannot improve their condition by increasing the hours they work, under the government’s flagship universal credit scheme, a report has said.
The Chartered Institute of Housing said on Thursday that 400,000 of the country’s poorest families – among them those in poverty and on the minimum wage – will have less income in 2015 than they did in 2010, despite ministerial assurances that no one would lose out under its plans. The CIH calculations show that “the government’s aim for households to be better off in work than out of work under universal credit is not the case for all families.”
Universal credit, which will replace six of the seven main means-tested benefits and tax credits for those of working age, is due to be rolled out over the next five years. Pilot projects will start in spring and it is planned to start nationally next autumn. The report says households that earn £247 or less a week will see a fall in real income in 2015, and lone parents with up to three children will always be worse off if universal credit remains in its current form.
Grainia Long, CIH chief executive, said: “This is a critical time – 400,000 of the lowest earning working households in the UK could see a real drop in income under universal credit. Changes to address this need to be made now. The principles underpinning universal credit are the right ones, but as our report sets out, it is imperative that the detailed design of universal credit ensures that low-income working families are not disadvantaged.”
22nd November 2012