Universal Credit Could Make Working Fewer Hours More Attractive

Universal credit is facing significant design problems and needs serious reform if it is to meet its original goal of making work pay for most claimants. A nine-month review, conducted by Resolution Foundation, concluded that for some groups, especially women, universal credit could make reducing the number of hours worked more attractive. It suggests for these groups the fall in their employment earnings would largely be cushioned by the taxpayer.  The report states: “Multiple changes to UC since its conception – some policy-related, some reflecting a lower than originally anticipated budget – have altered both its design and expected impact.” It suggests it would take as much as £3bn to restore the planned UC taper – the rate at which UC is withdrawn as earnings rise – to the level at which tax credits were withdrawn. Read more on the Resolution Foundation website.