Friday, 12 July 2013

Is it true? Will Universal Credit make work pay – so that people are better off in work than claiming benefits?

A much repeated claim made by Iain Duncan Smith, Lord Freud and junior ministers at the DWP is that it will - Universal Credit will make work pay – so that people are better off in work than claiming benefits. Embodying two, well what do we call them, promises, pledges, commitments, or assertions?

Increasingly, people who investigate the small print of UC and the "taper" methodology under UC for removing benefits as people increase the hours they work suggest it would be best to regard them as "assertions". That includes the Joseph Rowntree Foundation which has now published the results of a study by Donald Hirsch and Yvette Hartfree - Does Universal Credit enable households to reach a minimum income standard? - which concludes that:

" UC strengthens work incentives for some, but in many cases provides little or no incentive for additional work" and points out that people within certain "target groups" - lone parents and second earners on the minimum wage - "working 30 or more hours a week will reduce disposable income compared with working fewer hours. Above this level, working extra hours triggers higher childcare bills and reduced UC payments, and brings income into taxation".

To tie in with this week's appearance before the select commitee in the House Of Commons of Iain Duncan Smith and Lord Freud to discuss Universal Credit implementation a DWP Press Release published the same day once again said "Universal Credit is one of the most fundamental reforms to the welfare system since 1943, and will roll 6 benefits and tax credits into 1 to simplify the system and ensure people are better off in work". It also said that a further "6 Jobcentres will begin to take new claims to the benefit on a roll out programme from October 2013, continuing the safe and well tested approach to reform delivery".

So, will the "new claims" being accepted in these further pilots include the sorts of claims that will possibly throw up the evidence that that long standing assertion doesn't stand up, as Donald Hirsch and others are trying to point out, or will they too be confined to the sort of claims which are unlikely to?

With the full implementation now having been put back to October 2017 it isn't as if IDS doesn't have some time in which to revisit that assertion and make sure UC actually delivers on it, rather than just keep saying it will, whilst ignoring all carefully calculated and researched suggestions that it won't.

Update: 13th July.  Katie Schmuecker, policy and research manager at the Joseph Rowntree Foundation, has a piece up at the NS Without childcare support, low-paid workers will lose out under Universal Credit