When Universal Credit was first announced there were some glimmers of optimism surrounding the DWP’s claims that it would make work pay, reduce the shocks people experience when moving into work and cut the punitive marginal tax rates people working and claiming benefit experience. (Marginal tax rates being the amount of additional wages lost in tax, national insurance and lost benefits).

However, now it is upon us it is looking less and less positive. In April 2016 the work allowances (the amount you can earn before it affects your UC) for single people, couples without children and people without disabilities will be abolished. This means that 65p in the pound of all of their net income will be offset against their Universal Credit entitlement, while those with children or disabilities will see the work allowance significantly reduced, thus meaning that people will be less well off than they would have been and the incentive to add hours or look for better paid work is significantly reduced.

To counter the latter point if you are earning a low wage, often because you are only working part-time you will be required to look for more work or better paid work and can be sanctioned (have your UC cut or stopped) if the DWP do not believe you are putting in enough effort.

The situation experienced by one woman we advised recently clearly demonstrates the unintended consequences of this. She lives in Leek and works for a local super market for 10 hours a week, with occasional opportunities to add to this as and when extra shifts are available, also in Leek. Because this does not pay her enough to live on she recently claimed Universal Credit.

Because the hours and wage rate are low she earns less than the DWP believe she should be and thus ‘in-work conditionality’ kicks in. In order to preserve her Universal Credit she has to undergo a series of prescribed activities to demonstrate she is making adequate efforts to look for work including signing on daily at her local Job Centre….. in Hanley.

In the brave new world of the DWP where cost-cutting rules, the Leek Job Centre has been closed for many years now and the nearest Job centre is in Hanley, some 11 miles away. So each day she has to undertake a 20 mile round trip on the bus which costs her money and takes up valuable time she could spend more usefully looking for work or being available in case her employer needs her to work extra hours.

Is there any way out of this situation? There is one route out: stop claiming Universal Credit, but this is likely to leave her £30 or £40 a week worse off and possibly with no help towards her rent.

This demonstrates the reality of life for many people caught between employers making arbitrary decisions about their working life in the pursuit of a flexible workforce and a bureaucratic process that is designed to save money by reducing its services and making life on benefits as unpleasant as possible for people.

However, this ignores the fact that in the modern flexible labour market too many people are simply unable to earn enough to survive without a subsidy from the social security system. To punish them further simply compounds the injustice.

This entry was posted on March 23, 2016

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