Universal Credit Will Discourage Second Earners

The government’s flagship welfare policy appears to be a ‘single breadwinner system’ that will discourage second earners – most likely women – from working, a report has found.  The report from the think tank Resolution Foundation says as support will be withdrawn more quickly under universal credit, in most cases households will start to have support withdrawn as soon as a second earner enters work.  ‘As things stand, the universal credit is set to weaken work incentives for low-paid second earners,’ says Gaining from growth. ‘The second earner (overwhelmingly women) will, in effect, face a tax rate of 76 per cent from the first pound they earn, assuming they pay tax.  ‘This discourages work and we believe it is a move in the wrong direction.’  Download a copy of the report from the Resolution Foundation website.