The impact of Universal Credit

Save the Children has identified an anomaly in the rules for Universal Credit. Single parents who currently receive Working Tax Credit while over 16 hours a week will lose on tapers and earnings disregards, with the effect they may be worse off.

It is difficult to be confident about any calculations. The rules for Universal Credit are still obscure; the position of Council Tax Benefit has not been settled; the tax threshold seems likely to change in the near future. There will be other changes, too: the government has signalled that conditionality may be introduced for people who work less than a full working week, which seems particularly likely to affect single parents. It would be surprising, though, if there were not more losers. The only way to reform a system so that some people are better off without others being worse off is to spend more money. The more fundamental the reform, the more it has to cost. My suspicion is that, by the time Universal Credit has been adapted and trimmed to fit, it will prove to be rather less radical than the government hopes. It will be the cuts in benefits, rather than the changing rules, that we’ll notice most.

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