Universal Credit Flashcards
What is it?
It is a means-tested benefit for workers an families that are on low incomes. It accumulates six benefits into one, accounting for £53 billion of welfare y 2020-2021
Advantages of Universal Credit
• losing income will fall
The number of people that are losing two thirds of their income will fall from 2.1 million to 700,000 if they go into work
Disadvantages of UC
• tax credit no longer be entitled
1.3 million working families that used to receive support in the tax credit system will no longer be entitled to any in-work support
What does UC do to incentivise work
It creates an outlook that claimants are always better off in work, which in turns incentivises people to work
What is the tapper rate for UC
At present UC claimants lose 63p for every extra pound they earn
What is the aim of UC
It aimed to ensure people are not deterred from going to work because they lose extra money they earn from the withdrawal of benefits and additional taxes.
Why is UC socially justifiable
It allows recipients to retain their out-of-work benefits even if they enter work for up to a specified amount. This improved financial incentive to enter work.
What group does the UC failed to help
Working single parents. They would lose an average £1,000 a year.
What are the number of families that will be worst off under UC
Around 2.5 million families currently receiving working tax credits will be between £41 and £46 a week worse off under UC
What are the IT issues of UC?
One in three does not have internet access
It takes 45 minutes to complete, and yet it does not have a save function.
How much is receipt of UC better off?
1.7 million in receipt of UC will be better off by an average of £38 a week, in part due to the more generous treatment of housing costs.
Failures
• claimants being on the system
Currently, only 280,000 claimants are on the system, compared to an original target of 6 million
Failures
• Delay
The UC will not be completed until 2022, the seventh delay since 2013. It is five years behind projected finish date
Why was UC delayed?
Due to management failings and IT design problems.
Advantage of UC
• Quote from former chairman of WPC
‘The system had to be introduced in order to tackle the fact that the benefit system was an ‘over-comfortable safety net’ that kept families trapped on benefits
