0954 GMT December 14, 2019
A comprehensive analysis of the impact of universal credit, compiled by the Policy in Practice consultancy and shared with the Observer, found that almost two in five British households in receipt of benefits would lose an average of £52 a week, theguardian.com wrote.
They include a million homeowners currently receiving tax credits, 750,000 households on disability benefit and some 600,000 working single parents.
The scale of the impact on vulnerable groups will intensify a growing Tory rebellion, with those involved already believing they have forced a rethink. Some Conservative MPs are threatening to block the future rollout of the system unless billions are pumped into it.
It leaves Philip Hammond, the chancellor of the exchequer, walking a tightrope before what he hoped would be a low-key final budget before Brexit.
He is under intense pressure to pay for welfare and the NHS, but another wing of the party is warning that he does not have their support for big tax rises.
While universal credit has already been rolled out in some areas for new claims, a crunch is due to come next year when millions are moved from the current system to the new program, which rolls several benefits into a single payment.
Some 2.8 million homes would see their income cut under the universal credit system, according to the Policy in Practice analysis.
In a major blow to May’s early vow to help those ‘just about managing’, working homeowners currently receiving tax credits are badly hit under universal credit. According to the research, a million homeowners currently receiving tax credits will be worse off under the new system. They will lose an average of £43 a week.
Researchers found that 600,000 working single parents receiving the current tax credits system will be worse off, losing £16 a week on average. About 750,000 households on disability benefits will be worse off. Their average loss is £76 a week.
The self-employed lose out under rules in universal credit that assume a minimum income from self-employment, usually £1,187 a month. It means that 600,000 self-employed people will be worse off.
Families with more than two children suffer as a result of changes to the law that limits state support to two children. Under the tax credits system, payments are made for more than two children if they were born before 6 April 2017. As a result, 300,000 families will be worse off, losing an average of £40 a week each.
However, the data also showed that 2 million households would gain compared to the old system, but only by £26 a week on average.
Households who do well out of the new system include 900,000 private tenants in work, gaining an average of £14.52 a week. People deemed too ill to work or to prepare to work are likely to be better off or receive the same amounts. The average household in that situation will be £7.76 a week better off.
An attempt will be launched in parliament this week to force ministers to admit how many people will lose out under the new system. While transitional support is given to those moved over to the new system, this is removed the moment their circumstances change.
Deven Ghelani, the founder of Policy in Practice, said, “Problems with tax credits in 2000 and housing benefit in the 1980s were resolved by spending money. The government needs to not only allow universal credit to become more generous, but also allow the department to invest in delivery. Transition to a new system was always going to be difficult. History tells us you can’t do welfare reform on the cheap.”
A spokesman for the Department for Work and Pensions said, “Universal credit is based on the sound principles that work should always pay and those who really need support receive it. Universal credit will see an extra 200,000 people move into work from where they can progress; 700,000 more people getting an average £285 a month extra because it’s a simpler system helping them get benefits they are entitled to but were not receiving under old system, and around 1 million households with a disabled person will get around £110 more a month.
“However, we are listening and responding to concerns about how universal credit supports people and constantly looking to improve the benefit. Significant improvements have been made to the system already.
“The analysis does not take into account the transitional protections we have put in place so people we move on to universal credit receive the same or increased level of support, nor the additional protections for 500,000 severely disabled people we recently announced.”