A new report into Universal Credit has concluded that around 1.9 million adults will be over a thousand pounds worse off, per year, under the new benefit system.
The analysis found that UC disproportionately reduces incomes among poorer adults and disabled people will also be hit hard. Those in the lowest-income 10% of the population on average lose the most from Universal Credit – equating to £150 per year per adult – it said.
The effects of Universal Credit on people with disabilities is particularly significant and worrying. After transitional protections expire, those who would have been entitled to the “severe disability premium”, might receive as much as £2,230 per year less in Universal Credit than they would have under their old benefit income methods, the The Institute for Fiscal Studies found.
The IFS said 11 million adults would lose or gain under new these new rules governing UC payments, with 1.6 million gaining by more than £1,000 a year and 1.9 million losing at least that much.
Universal Credit, which is available to some people who are on low incomes or out of work, replaces six other benefits.
Tom Waters, research economist at the IFS and an author of the briefing note, said: “The biggest losses experienced as a result of the switch are mostly down to a small number of specific choices the Government has made about Universal Credit’s design, such as its treatment of the low-income self-employed and people with financial assets.
“Many of those very large losses do turn out to be temporary for those concerned.
“However, even when measuring people’s incomes over relatively long periods, Universal Credit still hits the persistently poor the hardest on average.”