Universal credit could make working less appealing for some, report claims

Ashley Kirk
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Iain Duncan Smith addresses delegates at the 2013 Conservative party conference (Source: Getty)

The government's reforms to Britain's welfare system may in fact be making it more attractive for some in society to not work, according to a new report.

Research conducted by the Resolution Foundation indicates that universal credit, the Tories' flagship benefits programme, may mean that some groups find it more attractive to reduce the number of hours they work.

The report concludes that for these groups - especially women - the reduction in their employment earnings would largely be cushioned by benefits.

Read more: Universal Credit: What you need to know about the benefits scheme being rolled out today

The report says that "multiple changes" since the policy's conception have changed its expected impact, including changes to the legislation as well as a budget that is lower than expected.

Single parents and second earners in two-income couples, the report claims, need more help under the system, since they are most likely to respond to work incentives. It says that a second earner making £10,600 would see a 65 per cent reduction in the rise in their net household income under universal credit.

The report says:

The proposed large-scale extension of conditionality to the working population on low incomes is completely untried and untested, with little international evidence to support its design.

And even if – after much development, which is only now starting at a small scale with simple JSA-equivalent cases – it proves effective at stopping people working too few hours, it makes no attempt to encourage or help people move beyond minimum wage jobs. In our view, a different approach is required.

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