Westminster Blog

Here are some of the highlights from the DWP impact assessment:

1) Higher bill: The reforms in total will add £2.6bn to the welfare bill overall. There could be other “dynamic benefits” not included in the model.

2) Fraud savings offset by better take-up: Expected savings of £2bn on tackling fraud will be smaller than the £2.6bn of extra spending expected as more claimants take up benefits they’re entitled to.

3) 2.7m winners: a 100,000 expected to gain by at least £4,000 a year. About 1m households will see an increase in income of at least £25 a week

4) 1.7m losers once transition complete: Around 425,000 households will lose more than £25 a week or £1,300 a year. About 100,000 will lose more than £75 a week. That’s almost £4,000 a year.

5) A mixed result on work incentives: Around 1.5m households will be able to keep more of the money they earn from working an extra hour. But 2.1m households will see their marginal deduction rates rise.

6) Incentives for the average worker deteriorate The average marginal deduction rate increase by 4 per cent under universal credit. So by this measure, on average the plan worsens the incentive to work an extra hour. But the anomaly, apparently, is partly because some households will be receiving more benefit.

7) Childcare kicked into long grass IDS has yet to take a decision on what happens to childcare payments, which will have a big impact on work incentives and the estimates on winners and losers.

8 ) Council tax benefit kicked into long grass: No decision yet. But the impact assessment nevertheless rolls council tax benefit into the universal credit model. This is important. Administration of the benefit is being devolved to local government and, depending on how it is handled, it could make IDS’s UC numbers look less rosy.

9) Bad for second earners: Around 330,000 second earners will see their incentives to work deteriorate under universal credit. Most of the other losers will be: working more than 30 hours a week; receiving tax credits; and not claiming housing benefit or council tax relief.

10) Crackdown on stay-at-home mums!? A new “individualised” set of rules will mean that stay-at-home mothers with partners will now face the same requirements to find a job as single mothers.