The rollout of universal credit is set to leave thousands of working-age disabled people significantly poorer, according to a new report by the Resolution Foundation. The report reveals that a single person with a long-term disability that prevents them from working will be £2,800 a year worse off when they transfer to universal credit.
The six-into-one benefit change, championed by former work and pensions secretary Iain Duncan Smith, is expected to cover more than 7 million people by the end of the next parliament. The merger of previous benefits, including income support, housing benefit, and tax credits, into a single payment has been met with technical delays and funding cuts, leading to concerns about increased hardship for claimants.
The report, titled “In Credit?”, highlights the impact of universal credit on working-age families, with seven in 10 eligible for means-tested benefit support expected to be worse off under the new system. While recent funding boosts have limited the income cuts for some claimants, the overall picture remains concerning.
Alex Clegg, an economist at the Resolution Foundation, emphasized the need for universal credit to adapt to the changing landscape, particularly in light of the post-pandemic era where many claimants are dealing with long-term illnesses and disabilities. The Department for Work and Pensions defended universal credit, stating that it provides a vital safety net and helps people move into work faster.
As the debate over the effectiveness of universal credit continues, it is clear that more needs to be done to ensure that vulnerable individuals are not left behind in the transition to the new benefit system.