Saturday, 6 July 2013

Universal Credit and "making work pay" ....

One of the key advantages of the new scheme is that it removes the confusing overlaps between tax credits and housing benefit, which currently mean that working households can suffer high loses in net income if their wages increase. Under the present system the loss can be as high as 96p of every £1 increase in gross earnings. By combining credits and benefits, universal credit aims to ensure that working households keep at least 20p of every extra pound they earn. 

so, applying the “government spokesperson” best gloss a “fivefold improvement”; but .. 

The government has watered down the benefits to be gained from these changes by leaving council tax benefit out of the new system, so that working families whose earnings increase will still face the vicissitudes of whatever mechanisms for withdrawing council tax support apply where they live. But the majority of working families will be better off – indeed, the government's own assessment reckons that two-thirds of working families with children will benefit, against only 18% who will lose out.

1 comments:

The Stigler said...

"By combining credits and benefits, universal credit aims to ensure that working households keep at least 20p of every extra pound they earn. "

So, a single mother who gets a job at McDonalds in town is going to end up with a net extra of about £10/day, less a couple of quid for bus fare, is about £8/day.

Of course, they'll then have to arrange for someone to pick up the kids, to find the energy to make a meal and so forth. Or they can just sit at home watching TV.