Work allowances

I am shocked at the changes announced today. Has not the key message over the last 5 years been that claimants will be able to keep a large part of their earnings under UC and thus that work will pay? I have been and listened to so many presentations on this point over the last 5 years and now it seems all to have turned to dust?

It just shows where their thinking has gone - they no longer feel any desire for there to be an ‘incentive’ to work in the sense that you are better off than on benefits

So that list of winners and losers in UC .... is now just a list of everyone losing out, eh?

I’m assuming that as the Work Allowance has gone, the taper will too as it has no function, and wages will be taken £ for £. In which case the UC propaganda on gov.uk will need a bit of a rewrite:

‘James’
One of the UC propaganda sheets boasts of how ‘James’ will be better off -
25 unemployed, single. £369 rent per month to pay.
UC is £621 pm. Gets a job at the minimum wage for 12 hours a week earning £339 monthly
UC is £473 month.
Total £812 per month – James is £191 per month better off in work

NOW – James will get help with rent only.  Just the same as under the current system.
And he’ll get sanctioned for not getting a ‘proper’ job.

The taper remains, for now.  The allowances have actually been tweaked in an interesting way.  No disregard for healthy childless people but they get to keep 35p in the pound.

Couples with kids and housing see a drop in benefit of about £19.50 a month while those without housing see £90.35 less in benefit.

It seems to make the impact of taking on housing costs about £70.85 a month less than under the current rules.

This may have an impact on young non-deps with children who previously might have been better off staying with their parents, because of the housing hit, even after meeting a HCC.  Now there’s less housing support anyway so the government don’t need to bribe them to stay.

Can you guide me to the detail on this please Gareth?

Which detail?

Is it specifically stated that the taper will remain? I’ve looked at the Red Book but it all seems much the same as what’s already out there - I had made the (perhaps unwarranted) assumption that with no Work Allowance there would be no taper either.

There’s nothing saying that it is to be removed in the bill.

Apologies if I’m reaching the conclusion rather painfully -

We’d be looking at a situation in which income is removed at ‘65% of the amount by which the claimant’s earned income (or, in the case of joint claimants, their combined earned income) in respect of the assessment period exceeds the work allowance’

...simply where the Work Allowance is Nil in some cases.

That’s my understanding

To be fair though Gareth - the work allowances aren’t in the bill either - there’s lots of stuff that isn’t in there. But I do agree - they didn’t say anything about the taper and they did for tax credits so I think it’s fair to assume it stays. There would just be no point at all to universal credit if it didn’t!!