UNIVERSAL Credit will leave almost 2million people £1,000 per year worse off – but almost double that will gain cash, new research has revealed.
Self-employed Brits, couples of different ages and some who are disabled will be worst hit by the benefits changes, the Institute for Fiscal Studies predicted today.
11million adults are set to be entitled to help from the new benefits system once everyone is on it, the respected think tank said, but the changes will be very mixed.
While many of the biggest losses are only temporary, Universal Credit when rolled out to everyone is likely to hit poorer Brits, it said.
Ministers have promised some money to help ease Brits over onto the new system, but it will only be temporary and will only be available to those who haven't moved over yet.
If Brits move home, change jobs or alter their hours, they could be forced onto the flagship benefits programme without any help.
Their research showed:
- 4.2million will be at least £100 per year better off, but 4.6million will be £100 worse off after transitional cash runs out
- 1.6million Brits will gain more than £1,000 a year due to the switch up – with renters set to see big boosts
- 1.9million will lose at least that much in the long run
Tom Waters, Research Economist at the IFS and an author of the briefing note, said of the research: "The biggest losses experienced as a result of the switch are mostly down to a small number of specific choices the government has made about Universal Credit’s design, such as its treatment of the low-income self-employed and people with financial assets.
"Many of those very large losses do turn out to be temporary for those concerned. However, even when measuring people’s incomes over relatively long periods, Universal Credit still hits the persistently poor the hardest on average."
Labour's Shadow Work and Pensions Secretary, Margaret Greenwood, said today the news showed that changes were "hitting the poorest hardest".
She added: "Pensioners with working-age partners and disabled people who would have been eligible for disability premiums are among those to receive the harshest treatment under Universal Credit and could be thousands of pounds worse off than they would have been under the old system."
A DWP spokeswoman said: "This report wrongly assumes that everyone was claiming their full benefit entitlement under the old system, which they weren’t because the system was overly complex.
"With recent work allowances changes, 2.4 million households will be up to £630 per year better off and people will access around £2.4 billion of previously unclaimed benefits.
"Universal Credit supports people into work and helps them increase their earnings while providing a vital safety net for those who need it, while the old system trapped people on benefits or taxed them punitively for taking on more hours.
"We continue to make improvements and have invested £10 billion into Universal Credit since 2016."
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