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Pop goes the payslip: Making universal credit work for families

Universal credit

We support the principles of universal credit, but our analysis has shown that without changes to its current structure its aims will not be met for many of those on a low income. Many disabled people and many parents in low income households will not see any financial gain if they increase their hours of work. Extra earnings will be eaten up by reduced financial support and extra costs. In some cases, they will even end up worse off working more hours. Citizens Advice has published two reports examining the impact of Universal Credit on disabled people and on families with children. The reports put forward a package of recommendations which would help ensure that as many people as possible see a genuine gain from every hour of work and the most disadvantaged are supported.

Rebalancing universal credit: Making it work for disabled people

In this report we outline the impact universal credit will have on different groups of disabled people and the difference our recommendations would make to the income of disabled people claiming universal credit.

Pop goes the payslip: Making universal credit work for families

Baroness Grey-Thompson holding the Citizens Advice 'Pop goes the payslip' report.

On 2 April 2014, Baroness Tanni Grey-Thompson helped us to launch Pop goes the payslip, our comprehensive analysis of the impact of universal credit on families with children and recommendations for ensuring extra work is always more financially rewarding. In the report we reveal the unintended effect that the current design of universal credit will have on disincentivising work for some parents who will lose money as their earnings increase. It outlines the extent of this problem for a range of parents wanting to either return to the job market or increase their working hours. Our practical recommendations do not require any additional funding but give parents under Universal Credit the choice, control and help needed to ensure that returning to work or taking on extra hours never leaves them worse off.

Rebalancing universal credit

On Tuesday 18 March 2014, the Government announced it would implement one of our key recommendations to increase the support available for childcare costs from 70 per cent to 85 per cent. This is welcome news for families and our universal credit campaign. However, this is only the first step towards improving the design and delivery of universal credit. In these two reports we outline the cost neutral package of recommendations we think are necessary to rebalance universal credit.

Background

Universal credit represents the biggest shake up in benefits since the ‘welfare state’ began. It’s a single benefit payment which is replacing six working age benefits. Its introduction will affect 8 million households across England and Wales.

Around half of all those coming to Citizens Advice Bureaux are affected by these changes and will need support to apply for universal credit and manage the change. Citizens Advice research has shown that 9 out of 10 clients are not ready for universal credit. The good news is that with support from Citizens Advice Bureaux over half of these people see an improvement in their skills and ability to cope with the changes.

Working families will be particularly affected and many will struggle to make work pay when they take off the costs of childcare and school meals.

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