DWP update: Rishi Sunak’s changes mean 500,000 more Brits to get Universal Credit
The DWP oversees a number of benefits, but it is Universal Credit which is claimed by the highest number. The sum supports those out of work, unable to work or on a low income. However, in just two weeks’ time it is thought half a million more families will become eligible for this payment for the first time. The benefit is being made more generous for those who work, and thus is intended to help individuals who are on a low income.
Government ministers have estimated approximately 500,000 working people on low incomes will be eligible to claim at that point, when they have not been able to do so previously.
However, a leading economic think tank has estimated the figure could be even higher than this.
The Institute for Fiscal Studies has said 600,000 people could benefit from the changes to the system.
The group added seven million families – including 43 percent of all families with children and 84 percent of all single parents, are set to be eligible for Universal Credit once the system is fully rolled out.
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Prior to the Budget, an extra £1 of after tax earnings reduced Universal Credit entitlements by 63p, however the Budget reduced that to 55p, also raising work allowances by £500 per year.
It was originally stated that changes would occur within the system by December 1, however, a vital update was provided on the matter yesterday.
Work and Pensions Secretary Dr Therese Coffey told MPs: “The latest information I have is that we intend to try to bring that in from November 24.
“This means that an extra 500,000 claimants will benefit, even more than might have been predicted just a couple of weeks ago.”
Budget reforms are intended to increase incomes by significant amounts for those in work, and the IFS cited one example.
If a lone parent homeowner worked full-time at the National Living Wage, the think-tank said, her Universal Credit entitlement would go up by £940 per year.
Tom Waters, economist at the IFS, commented on the matter, and said: “The reach of Universal Credit is perhaps much wider than is commonly understood – and the Budget reforms extend that reach further up the income distribution, by slowing the speed that the benefit is withdrawn as earnings increase.
“It will now be the case that three in every seven families with children will be entitled to at least some Universal Credit at any one time, and many more over the course of a lifetime.
“For single earner families, especially renters, it is possible to earn well above average and still easily be eligible.
“We are now in a situation in which lone parents and single earner couples with children, paying average sorts of rents, will still be entitled to Universal Credit when their earnings reach £50,000 and beyond.
“They will both be paying higher rate income tax and be receiving means tested Universal Credit.”
However, it is important to note that while the taper relief changes have brought positive news for many families, some are still worried about the removal of the £20 uplift.
The changes in the Budget may not be enough to make up for the £20 per week disparity for many claimants.
The DWP previously told Express.co.uk the measure was always intended to be temporary, and that the Government is focussing on its multi-billion pound Plan for Jobs.
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