Universal Credit ‘fails to help nine in 10 families’

Chancellor George Osborne. Picture: AP

Chancellor George Osborne. Picture: AP

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Most families will gain nothing from the government’s new Universal Credit, with ministers overstating the generosity of the benefit, a new report claims today.

The Trades Union Congress (TUC) and Child Poverty Action Group said the new single benefit payment, which is currently undergoing trials in parts of the country before being introduced across the UK, was in danger of failing to deliver on its key objectives.

The two groups said that although Universal Credit will improve some aspects of the benefits system, its ability to lift families out of poverty and remove barriers to working will be “severely undermined” by the government’s wider tax credit and benefit changes.

Nine out of ten families will gain nothing overall from its introduction, with any benefits offset by recent social security cuts, it was claimed.

Requiring people to claim online and make joint claims with their partners will also make the process more complicated at a time when advice services are being cut, said the report.

TUC general-secretary Frances O’Grady said: “Universal Credit is not bad in principle, but taken together with the other benefit changes introduced by the government, it will make most people worse off. For all the claims of simplicity, in practice it is such a complex system that the government has been forced to delay its roll-out.

“We are also concerned at the impact Universal Credit will have on disabled workers, as well as its plans to take away benefits from second earners as soon as they find work.

“Ministers must not turn a blind eye to these problems or Universal Credit will fail to help those very people it has been designed to support.”

Child Poverty Action Group chief executive Alison Garnham said: “Universal Credit lets itself down on many fronts. It introduces new complexities into the benefits system such as joint payments and new rules on savings. In addition, the financial gains for many are underwhelming, and the new system will rely as much on the stick as the carrot to incentivise claimants into work.

“Universal Credit is also blind to conditions outside of the benefits system: a lack of suitable jobs, the high costs of housing and expensive childcare to name a few. Taken in isolation, Universal Credit may increase some households’ incomes, but what financial gains they receive are more than wiped out as a result of the government’s broader programme of cuts.”

Citizens Advice chief executive Gillian Guy added: “We have concerns that weekly to monthly payments, direct housing benefit payments and making payments to households rather than individuals will be a significant and in some cases unmanageable shift for families on tight budgets.”

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