Broken promises: What has happened to support for low-income working families under universal credit
This briefing presents some of the analysis to be published in a forthcoming report assessing the impacts of cuts to benefits from 2010 to 2020. This briefing focuses on changes to universal credit since it was first legislated in 2012 and their effects on family incomes, work incentives and poverty rates. It also includes the effect of real-terms cuts to child benefit which took place during the same period.
Overall, families with children have lost more than any other group from changes to universal credit thanks to a series of heavy cuts. Families with children will be worse off by an average of £960 a year in 2020 compared with the income they could have expected in the absence of cuts to universal credit, and single parent families by a huge £2380 on average. Cuts to universal credit are revealed to be poverty-producing to the effect of around a million children.
The government has argued that work incentives have improved in universal credit because of the reduction in the taper. However for many families it is clear that the rewards from work have been reduced considerably, and for single parents the incentives to move into mini-jobs has been reduced by the work allowance cuts.
Finally the briefing examines the potential for some changes to universal credit to restore its poverty-reducing potential.