‘200,000 families better off’ after Universal Credit fix

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The government’s latest attempts to fix Universal Credit will see 200,000 families better off, a think tank has said.

However, the struggling reform of the benefit system isn’t out of the woods yet, the Resolution Foundation has warned, and further changes are needed to stop people getting stuck in low-paid, short-hours work.

In a report – ‘Back in Credit?’ – the think tank also reveals that the £1.7 billion announced for UC in last month’s budget coupled with the £3.2bn higher benefit take-up projected by the OBR means that, for the first time since early 2015, UC is set to be more expensive that the system it replaces.

According to the report, the £1,000 increase in working allowances mean an additional 200,000 working families will be better off under UC, compared to the old system.

Laura Gardiner, Research Director at the Resolution Foundation, said: ‘The welcome extra investment in UC at the budget means that a further 200,000 working families will now be better off under the new benefit system than the old one.

‘But if the government wants to make UC fit for the challenge of tackling 21st century poverty in Britain, these recent changes should mark the start of reforms, rather than the end.

‘The government should now prioritise reforming Work Allowances so that they do more to incentivise higher earnings for single parents, and encourage more second earners into work. This would make UC more female-friendly, and a better vehicle for driving down poverty.’

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