Fewer working hours are better for some on universal credit
The Resolution Foundation have found that universal credit is increasing work disincentives as many see little change in income halving their work hours.
A review has found that welfare reforms are making it more attractive for some people to work shorter hours, reports the Guardian.
The review found that the universal credit system’s flaw particularly affect single parents, second earners and those who work without having children dependent on the,.
The interim report, overseen by Mike Brewer, professor of economics at Essex University, says UC’s primary focus is on reducing joblessness within households. “It does little to encourage increases in hours or earnings beyond what the current system provides. Indeed many will face slightly blunter incentives to work or earn more.”
The report highlights that recipients who receive help towards rent find that their work allowance runs out at very few hours of work. If paid the minimum wage, this will be after no more than nine hours. After that point they will only keep a maximum of 35p of each extra £1 earned.
Brewer said:“The integration of six benefits into one under universal credit will be a major benefit to households. It should help to get more people into work and smooth the transition for those moving in and out of employment. More needs to be done to safeguard and strengthen the welcome simplification of the benefit system under UC.”
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