200,000 extra families better off on Universal Credit after Chancellor’s Budget boost – here’s how
MORE than 200,000 extra families will be better off because of the Chancellor’s £2 billion Budget day cash for the Universal Credit scheme, it has been revealed.
A think tank last night declared the additional investment announced by Philip Hammond in the teeth of a Tory rebellion means that for the first time since being introduced, Universal Credit will be MORE expensive than the legacy benefit system it replaces.
But the Resolution Foundation said further changes were needed to prevent people getting stuck in low-paid, short-hours work.
A fresh report concluded that the Budget boost to work allowances will mean hundreds of thousands more people will be better off on the new system than on tax credits.
A single parent renter will be £300 a year better off because of last month's changes, and a couple with children renting will be £630 richer.
And the system will encourage more people into work as they will keep more of their hard earned cash, it says.
However, three million are still set to lose out from switching onto the flagship new benefits system, which rolls six benefits into one. 2.4million are set to gain.
Experts called for more help for single parents and to encourage second earners into work, who are currently discouraged from taking a job or risk seeing their benefits slashed.
Laura Gardiner, Research Director at the Resolution Foundation, said: "The welcome extra investment in Universal Credit at the Budget means that a further 200,000 working families will now be better off under the new benefit system than the old one.
"But if the government wants to make Universal Credit fit for the challenge of tackling 21st century poverty in Britain, these recent changes should mark the start of reforms, rather than the end."
And Tory MP Robert Halfon urged ministers to continue to make families don't lose out under the new system.
He told The Sun: "It is vital that the Government builds on the Budget reforms, to ensure that no one is disadvantages - especially single parents who struggle daily to work and provide a decent life for their families.
"Universal Credit must always take people out of the poverty trap - otherwise what is it for?"
What are the Budget changes to Universal Credit?
- A boost to the work allowances means Brits will be able to take home an extra £630 a year of their earned cash [from April 2019]
- People claiming Jobseeker's Allowance, ESA and Income Support will get an extra two weeks worth of support during their transition to Universal Credit [From July 2020]
- The Chancellor will slash the rate at which Brits have to pay back advance loans from 40 per cent to 30 per cent each month, giving a big boost to the Universal Credit payments they will be able to get [from October 2019]
- Extending the length of time to repay debts from 12 to 16 months [from October 2021]
- He will extend the 12-month grace period from next July to all self-employed people, not just those running their own businesses [From July 2020]
- Universal Credit won't be fully rolled out until 2023
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Last month the Chancellor revealed more help for struggling Brits on Universal Credit - including help with paying back debts and slashing the five week wait down to three for even more claimants.
But those changes won't come until place until next year at the earliest.
A DWP spokesperson said: “Universal Credit is a modern benefit based on the sound principles that work should always pay and those who need support receive it. It replaces an out-of-date, complex benefits system which often trapped people in unemployment.
“The additional £4.5 billion announced in the Budget will support more people as they move onto Universal Credit. This includes a two weeks’ extra benefit payments for people moving from the old system, and an increase of £1,000 in the amount people can earn before their Universal Credit payment starts decreasing.
“These announcements are on top of the improvements we have already made to UC as part of our ‘test and learn’ approach – listening to feedback from stakeholders and claimants and making any necessary changes.”
The Sun Says
The Sun has long backed universal credit as a noble means of making work pay.
But its roll-out was shambolic and confusing. Philip Hammond responded to concerns by making funds available in his Budget to fix it.
A Resolution Foundation report today reveals that the cash will help over 200,000 families. Good. It is vital our benefits system is fair.
Right on the money, Mr Hammond!
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