Universal Credit cuts will leave some people in work worse off

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Despite Ian Duncan Smith’s persistent claims that “nobody loses a penny” under his flagship Universal Credit reform, the Department for Work and Pensions (DWP) has contradicted him and admitted that some claimants will be worse off. There seems to be a pattern emerging. Whenever the word “reform” is used by the Conservative government, it is always as a euphemism for “cuts to lifeline support.”

Guidance released this week by the DWP outlines how some working people will lose almost £900 a year. The memo supplies guidance on legislative amendments made in 2015 to the regulations which provide for the amount of earned income that is deducted from the Universal Credit maximum amount.

From 11.4.16 the range of work allowances available to Universal Credit claimants is reduced from seven to two (some rates are also reduced and some are removed completely). Consequently a work allowance will only be available where the claimant or either joint claimant is responsible for a child or qualifying young person and/or has limited capability to work (LCW).

On page three, the memo uses a case study – “Bella” – a 26-year-old shop worker who is single and lives with her parents. She works eight hours a week and earns £50, according to the DWP example. But at an hourly rate of £6.25, Bella apparently earns less than the legal minimum wage, which is £6.70 an hour for workers aged 21 and over. From April 1, the minimum wage is rising to £7.20 for employees aged over 25. The DWP guidance admits Bella, who is fictional, will see her monthly UC award plunge from £253.70 to £181.55 – a loss of £72.15 adding up to £865.80 a year.

There is no transitional protection for Universal Credit claimants whose work allowance is reduced or removed by this change.

The Shadow Work and Pensions Secretary Owen Smith said: “Iain Duncan Smith has spent months trying to pretend that ‘no one is going to lose a penny’ as a result of his Universal Credit cuts.”

“That’s now been blown out of the water by his own officials, who’ve produced a guidance note for DWP staff on how to implement the cut.

“Duncan Smith should read his own department’s guidance and call on the Chancellor to drop the Universal Credit cuts in the Budget.”

A DWP spokesman said: “Universal Credit (UC) is revolutionising welfare, with claimants moving into work faster and earning more than under the previous system.”

“As part of moving to a high-wage, low-tax society we are simplifying the work allowances under UC and giving those affected extra help to progress in work and earn more.”

“Even after the changes, UC claimants will know they are better off in work.”

The Poor Law Amendment Act of 1834 was based on the “principle of less eligibility,” which stipulated that the condition of the “able-bodied pauper” on relief be less “eligible” – that is, less desirable, less favourable – than the condition of the very poorest independent labourer. “Less-eligibility” meant not only that the pauper receive less by way of support than the labourer did from his wages but also that he receive it in such a way (in the workhouse, for example) that made pauperism less respectable than work – to stigmatise it. Thus the labourer would be discouraged from lapsing into a state of “dependency” and the pauper would be encouraged to work.

The less eligibility principle “made work pay”, in other words.

The current government is going even further, and applying the same punitive approach to people in low-paid employment, presumably to serve as a deterrent to poor wages. Personally, I think unions do that much better through collective bargaining, by addressing those actually at fault – exploitative employers, rather than poor, exploited employees.

This post was written for Welfare Weekly, which is a socially responsible and ethical news provider, specialising in social welfare related news and opinion.

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8 thoughts on “Universal Credit cuts will leave some people in work worse off

  1. Wake up everyone ! You are still asleep. You sleep walked into this at the last election. Its too late now you have nothing. No welfare. No human rights, No legal aid. You’ve only got yourselves to blame.You will do it again at the next Election.
    You should see it in the EU referendum Iain Duncan Smith pulling his puppet Boris strings.

    Liked by 3 people

  2. The minimum wage rising to £7.20 is being called a ‘living wage’ by this current government:
    “From 1 April 2016 workers in the UK aged over 25 earning the minimum rate of £6.70 per hour will see a 50p increase. The National Living Wage supports the government’s vision of a higher wage, lower welfare, lower tax society.” REF: https://www.gov.uk/government/news/new-national-living-wage-to-give-living-standards-boost-to-over-a-million-workers

    The real national living wage should be £8.25 (outside London). It is notable to see that the difference per hour between the government’s standard minimum wage (set by the government funded Low Pay Commission) and the national living wage (as calculated by Centre for Research in Social Policy) has an increased shortfall from £1.12 per hour to £1.55 between 2011 and 2015!
    REF: http://www.livingwage.org.uk/calculation

    In this statistical context I read ‘lower welfare’ as lower wellbeing, anything else is illogical!

    Liked by 1 person

  3. Cuts cuts and more cuts it’s barbaric but the government are to get a pay increase the latest is the change to personal independence payment they are going to save millions whilst we are on the poverty line I can’t even bear to see pictures of Ian Duncan Smith I hope one day he’s exposed for what he is……

    Liked by 1 person

  4. Reblogged this on wgrovedotnet and commented:
    I despair of this idiot government who refuse to invest in employers, jobs and people and insist on making sure the wealthiest are “better off”. Universal Credit is going to cost £20 billion to roll out over the next 4-5 years.
    Meanwhile IDS continues to lie through his teeth, as do most Conservative parliamentarians it would seem.

    Liked by 1 person

  5. Many thanks Kitty Sue, for yet another eye opener into the levels of incompetence (giving the Tories the benefit of doubt) this current government is capable of. Thanks also for exposing even further, the barrage of lies consistently offered up by the PM and his cabinet members.

    Liked by 1 person

  6. couldn’t believe this almost chocked on my aldi own cornies??? still these heartless conservatives would have a good laff over there line caught salmon and duck egg kedgeree washed down with earl grey T!!!
    they may have eeked their way in thru the pigging OOOOPS) SOZ MRc will b offended I 4got he adores piggies does he not???
    this /these benefits are NOT LIKE THE DOLE THEY WERE AND AS I UNDERSTAND IT STILL ARE SUPPOSED TO HELP DISABLED PEOPLE CONTINUE TO EXIST ON AN EVEN PLAYING FIELD WITH THOSE NOT FORTUNATE TO BE CLASSED AS DISABLED.
    THEY GOT IN BY THE BACK DOOR AS THEY SURELY KNEW THET WOULD(AGAIN HOW WE ASK OURSELVES) WHEN MOST OF BRITAIN VOTED ANYTHING BUT BLUES???

    HAVE JUST WATCHED THE NEWS ON ITV @ 6PM and its worse than I could even imagine.

    now I see that they begrudge anyone who already has adaptations fitted to assist them???

    INCREDULOUS. IN YOUR FACE CAMI KNICKERS.I AM SURE EVERY DISABLED PERSON AND GROUP WILL FIGHT THIS TILL ONCE AGAIN YOU R FORCED TO BACK DOWN AND LOOK LIKE THE BUNCH OF BUMBLING IDIOTS YOU R.

    WE ARE THE VOTERS TOO AND AS FOR AN IN OUT REFERENDUM I WAS TEMPTED TO GO FOR IN BUT NOW I WOULD VOTE OUT JUST TO GET YOU AND YOUR LOT OUT.!!!

    I WAS VOTING IN TO SAVE JOBS IN WHAT WE THAT HAVE NO OTHER OPTION BUT TO LIVE HERE HAVE TO GET TO SURVIVE ON LOW PAY MINIMUM WAGES BUT NOW AS MANY DISABLED THAT WOULD LOVE TO GET A JOB IN THE 1ST PLACE WONT B ABLE TO COZ U R CUTTING BACK THE MONEY THAT THEY WOULD NEED TO USE A DISABED TAXI OR THE MONEY TO FUEL UP THEIR MOBILITY CARS,OR THE TRAIN/BUS FARE IF THEY INDEED COULD STRUGGLE TO USE TO TRAVEL TO WORK!!!! Need I go on??? this has set the disability rights act back to Dickensian times or further.I hope disabled rights/human rights groups and disability lawyers are all over this like a RASH.aswell as disability protesters that CAN.ASWELL AS SUPPORTIVE CARERS/FAMILIES CELEBS AND ALL OTHER ABLE BODIED FRIENDS.

    I AM STILL GASPING 4 AIR IN DISBELIEF!!

    Like

    1. Someday hopefully soon,someone will be elected with the actual ability to run this island efficiently and fairly,that’s all I’m looking for!!!

      Like

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