Iain Duncan Smith declared this morning that “nobody will be worse off” under Universal Credit.
That is quite a claim, particularly given 1.7m households will lose out, at least in terms of their notional entitlement to benefit.
He was referring, of course, to the protection that will be provided so no family loses in cash terms at the point of transition.
This promise is both the midwife to this dramatic reform plan, and one of the most tricky measures to implement.
Without offering protection, this reforms would have been near impossible. No sane politician would raid the wallets of a million families on modest incomes, particularly in the run up to an election.
But we should not forget that these protections will be removed as soon as there is a “change in circumstances” for claimants.
For most households, the cash protection will not last for long. They will be moved on to the new rates if they change their working hours, change job, divorce, marry, separate, have a child etc.
Imagine trying to explain that as a result of these life-events, these affected families will be losing thousands of pounds of income a year. It won’t be easy.
The IDS team hope that in most cases the life-changes (such as the birth of a child or a rise in hours) will see incomes rise, even if it doesn’t rise to the level of the old system.
But there will be some casualties. This is a political problem far away on the horizon, sometime around 2016. But it will be a landmine waiting for whoever happens to be in power.
Jim Pickard
Kiran Stacey