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Universal Credit to leave working families worse off


The introduction of Universal Credit (UC), which will combine six different types of benefits into one monthly payment, will leave working families worse off, according to the Institute of Fiscal Studies (IFS).

UC was intended to leave families better off than they would be under the current system, but the IFS has claimed that cuts to the programme mean that the average working family will have less money.

The IFS research has shown that UC will leave 2.1 million families with an average loss of £1,600 a year, while 1.8 million will gain £1,500. Working single parents will lose an average of £1,000 per year.

The UC’s single payment will replace six current benefits, including Jobseeker's Allowance (JSA) and Employment and Support Allowance (ESA). It is being introduced across the country to help encourage people back into work, but the IFS have claimed that it may deter people from seeking employment.

Single parents have less of an incentive to work under UC, and in the case of a couple, UC encourages just one of them to find employment, rather than both.

Shadow work and pensions secretary Owen Smith said:
"Everyone can now see that successive cuts to Universal Credit have destroyed many of the work incentives that were supposed to be the very reason for the scheme, hitting single parents particularly hard".

A spokesman for the Department for Work and Pensions said:
"Universal Credit will make work pay and increase financial incentives for people to work more, while also bringing the welfare bill under control.
"Universal Credit also includes a wide range of additional benefits - including increased childcare and more support from a dedicated work coach both things that were ignored in the IFS's analysis."

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