Universal Credit could leave millions of families up to £3,000 per year worse off due to welfare cuts, the Resolution Foundation has warned.
Universal Credit was designed to “transform welfare” by simplifying benefits payments and offering incentives to get people to return to work more quickly. It is designed to unify income-based Jobseeker’s Allowance, income-related employment and support allowance and income support into a single, less complicated monthly payment.
However, the Resolution Foundation has warned that any improvements and efficiencies made to the welfare system by the unification of the payments into a single scheme are being negated by “the government’s desire to secure further savings from the welfare budget”, which they have “taken too far”.
The foundation, which is chaired by former Conservative minister David Willetts, said that 2.5 million families would be worse off with Universal Credit, with some families £3,000 per year out of pocket.
The findings come as the government announces a further expansion of the scheme, with a full roll-out planned by 2021.
Iain Duncan Smith resigned as work and pensions secretary earlier this year in protest of the government’s continued ‘salami-slicing’ of the welfare budget, which has taken money away from those most in need.
Labour’s shadow work and pensions secretary, Owen Smith, commented:
“This announcement shows Stephen Crabb thinks working families should put up the bunting to celebrate the rollout of Universal Credit cuts that will see 2.5 million an average of over £2,100 a year worse off.
“Only a Tory Government with as warped a sense of priorities as this one could issue a statement lauding the rollout on the same day an independent expert report from the Resolution Foundation shows Tory cuts will completely undermine work incentives in the programme.
“The Tories should stop slapping themselves on the back for delivering cuts to working families right across the country and instead listen to Labour’s calls for an urgent U-turn.”
