Published on October 30th, 2013 | by Kelly Rose Bradford0
Universal credit will leave working single parents worse off
Gingerbread, the charity for lone mums and dads, has published research which suggests working single parents will be the biggest financial losers under the government’s new universal credit scheme.
The report – Credit crunched: Single parents, universal credit and the struggle to make work pay – was compiled by Professor Mike Brewer and Dr Paola De Agostini at the Institute for Social and Economic Research.
They found that despite the government’s assurances that the new credit will always make work pay, there would be ‘little financial incentive for single parents to increase their hours beyond mini-jobs’.
It warns that single parents earning the minimum wage and above it, as well as single parents who are not working, will lose out in cash terms under UC, with those in work facing the biggest loss.
However, those lone parents who are looking for part time work will be at a financial advantage, as long as they do not work more than 20 hours a week.
Universal credit replaces both in and out of work benefits, and Gingerbread reports that almost all of the UK’s 2 million single parents will move on to it.
The organisation’s chief executive Fiona Weir said that universal credit simply won’t deliver on its promise to make work pay.
“Government claims that universal credit will make work pay, but in fact working single parents will be the biggest losers under the new system,” she said. “Single parents on low wages will be under considerable pressure to extend their hours under universal credit, but our research shows that financially, extra hours often won’t stack up.
“Making every extra hour pay is of vital importance to single parents who are the primary carers for their children, and sole earners for their family. This report highlights a number of changes that could be made to improve work incentives for single parents under universal credit, and it’s vital that the government considers these carefully before it is implemented more widely.”
Ms Weir added that ‘in the current difficult economic climate any new reform to the system must make lives better for families, not worse’.