Thousands of working-age disabled people are significantly poorer after they are transferred to universal credit, a study by a think tank has shown.
The Resolution Foundation’s In Credit report has found that a single person whose disability prevents him or her from working would be £2,800 a year worse off on universal credit compared with legacy benefits.
Around six million people in the UK claim universal credit and thousands of those are people with a disability.
This is what it all means.
What is universal credit?
Universal credit is a monthly payment that helps people who are unemployed or on low incomes with their living costs. It replaced several other benefits such as housing benefits, income support and working tax credits, for example.
“[It] is more generous with a majority of households on legacy benefits likely to see their entitlement increase if they moved to universal credit,” the Department of Work and Pensions (DWP) has said.
This month it increased the amounts paid in universal credits. The monthly standard allowance for claimants under 25 has recently risen from £292.11 to £311.68. The amount for over 25s has gone up from £368.74 to £393.45.
Couples under 25 have seen their monthly payment increase from £458.51 to £489.23, while couples over 25 have seen their payment increase from £578.82 to £617.60 a month.
What has the think tank said?
The Resolution Foundation, which describes itself as an independent think tank focused on improving living standards for those on low to middle incomes, published its study this week. It commented on the projected full expansion of universal credit to all benefit claimants, which is due to be by 2030.
“By 2028, entitlements to UC will total around £86bn a year,” the think tank said. “But this is £14bn less than if the government had kept the 2013-14 benefit system. As a result, seven in 10 working-age families eligible for means-tested benefit support will be worse off under ‘universal credit Britain’ than with the pre-reform system.”
“A renting single parent who works 30 hours per week on the national living wage will be nearly £3,800 per year better off in 2024-25 than if they were on the old system,” the report added.
“Across the 2.7 million families in the private rental sector that are eligible for UC, the average gain compared to the old system is £1,200.”
What has the government said?
The DWP said: “Universal credit has proven itself as a modern benefits system fit for the future, providing a vital safety net to millions while helping people move into work faster. We boosted benefits by 6.7 per cent this month, worth £470 for 5.5 million households on universal credit.
“Work is the best path to long-term financial security and through universal credit, our £2.5 billion back-to-work plan will help over a million people – including those with long-term health conditions – find, stay and succeed in work.”
