Universal credit ‘claw-back’ hurts working families

April 22, 2014

slide_140411_Usdaw_Universal_Credit_photoLast week Emma joined the shopworkers’ union Usdaw to highlight how Universal Credit will ‘claw-back’ employees’ earnings and make it harder for low paid workers to escape poverty.

Under the new Universal Credit system being introduced by the Government, people whose incomes are topped up by Universal Credit will lose up to 76p for every pound they earn.  Some workers could potentially lose thousands of pounds this way. This will penalise hard-working households and mean people have less incentive to work.

Last month Emma pointed out how the increase in the personal allowance announced in George Osborne’s Budget actually did very little to help lower earners, because the gains would be largely cancelled out by reductions in Universal Credit.  Emma’s budget speech can be read by clicking here.

Emma said:

“Universal Credit is a good idea in theory, but the way it is being implemented means hard-working people on low incomes will lose out.  The Government talks about rewarding hard work, but when it comes to those putting in long hours for poverty wages their policies do just the opposite.”

John Hannett – Usdaw General Secretary said:

“We are grateful for Emma’s support. Whilst Universal Credit affects households differently, many of our members working long hours are going to be worse off when they are transferred onto Universal Credit. That loss of income is compounded because they will find it incredibly difficult to make up the shortfall by working longer hours. That is why the claw-back from additional earnings is incredibly unfair, trapping households in poverty and creating a disincentive to work. So we want the Government to ensure that work does pay by lowering the claw-back to 55p in the pound.”

Constituents in South Shields who want to know what their benefit entitlement will be under Universal Credit can find out by visiting www.entitledto.com

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