universal credit

Kiran Stacey

Here’s a sentence to set alarm bells ringing: the Department for Work and Pensions is currently undertaking a rather large and important IT project to change the way people can claim benefits.

As part of the project to roll up all the various benefits and tax credits people receive into one “Universal Credit”, DWP is creating a new system that would allow people to log in online, fill in some basic details and quickly calculate how much they can claim. The money will then be paid automatically into their bank account. Read more

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. Read more

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. Read more

A new means test. A savers penalty. A hit in income for 600,000 prudent households. Is this really Tory policy?

Buried in the welfare reform bill, published tomorrow, is a new rule that will achieve just that. You have to wonder whether it will survive in its current form.

Iain Duncan Smith’s ambitious plan to create a new Universal Credit will extend a savings means test — applied to those on out of work benefits — to working families that would currently be eligible for tax credits.

This will mean any working family with savings of more than £16,000 will have no entitlement to universal credit, once the system is in place.

That affects around 400,000 working households, taking in some cases more than £100 a week from their wallets. Read more

Jim Pickard

Here is a link to the full ft.com story if you are interested. But the key points of this morning’s report by the Institute of Fiscal Studies – on the impact of IDS’s universal credit – is: