The economics of Universal Credit

As a member of the Women’s Budget Group (WBG) I have contributed to and endorse the WBG’s written evidence to the Committee. This submission, written in a personal capacity, makes some additional comments relating to some of the Committee’s questions. It is in three sections: 1. Universal Credit objectives; 2. Impacts of Universal Credit; and 3. Reforms to Universal Credit.

  1. Universal Credit objectives

The objectives of Universal Credit (UC) have been broadly stated as simplification, making work pay and tackling worklessness. The UC White Paper referred to making the system fairer, more affordable and to tackle poverty and welfare dependency, whilst continuing to support the most vulnerable in society[1].

Worklessness, women and UC

The emphasis on tackling worklessness could be described as ‘gendered’. The Department for Work and Pension (DWP) 2012 Impact Assessment (IA) implied that getting one partner in a household into work was the way to tackle worklessness (and hence, perhaps, the lack of an earnings disregard (‘work allowance’) for second earners, who are often women). The IA noted the possibility that in some families, second earners may reduce their hours or leave work, but appeared unconcerned about the prospect on the basis that ‘the improved ability of the main earner to support his or her family will increase the options available for families to strike their preferred work/life balance’[2]. Yet evidence suggests that in-work poverty is more likely to be avoided where both partners work[3]. The main earner is a man in around 80% of couples entitled to UC[4]. Furthermore, as WBG’s submission points out, tackling ‘worklessness’ may not be the most appropriate approach to supporting women, who often still carry out  unpaid caring responsibilities. 

Whilst employment rates, including for women, are higher than in 2013 when UC was introduced, this may not necessarily be due to UC. The National Audit Office has stated that the DWP will never be able to measure whether UC actually leads to 200,000 more people in work, because it cannot isolate the effect of UC from other economic factors in increasing employment.[5] Recent longitudinal analysis using a comparison group has also found no evidence that UC is associated with moving into work; but that there are links with worsening mental health[6].

Overall employment trends also highlight that the growth in women’s employment can be attributed to factors such as:

Instead there are other objectives for the social security system, as noted in the WBG submission (see also section 3 below).

  1. Impacts of Universal Credit

As the WBG and other organisations have shown, women are disproportionately affected by social security through having greater needs to claim than men because of unpaid caring responsibilities, low paid part-time / precarious work and so are also more affected by austerity measures reducing benefits and services[8].

The WBG submission highlights different ways in which UC affects women (such as through its structure, conditionality, payment). The extension of conditionality particularly affects women as lone parents and as partners[9]; and sanctions for non-compliance have particularly affected lone parents and disabled people[10]

UC also extends the concept of joint claims for couples (which applied to some couples claiming Jobseeker’s Allowance and in tax credits, where payment is to the partner fulfilling certain roles - the full-time earner (for working tax credit),[11] or the partner nominated as the ‘main carer’ (child tax credit, and childcare support via tax credits)[12]. UC joint claims involve both individual and joint responsibilities; e.g each partner must sign a claimant commitment but both must accept one to be entitled, and the claimant commitment can be affected by the partner’s actions (eg if they start work or circumstances change[13]). The couple must nominate one partner as the lead carer (which means some relaxation of conditionality for caring) whilst the other has no responsibilities taken into account (and so may have to be available for work for 35 hours a week)[14]. Only one member of a couple completes the claim form; the first person to open a UC account receives a ‘partner code’ which they must give to their partner to input to join the claim[15].  Whilst each partner has their own online UC account, each can see the other’s ‘To Do’ list; where entries may affect both members of a couple, each can also see the other’s ‘Journal’ (where messages to and from the Work Coach can be left).

‘Unit of assessment’

A key feature of means-tests of particular relevance to women, and which is amplified in UC, is the unit of assessment, which is the household, rather than the individual. Means-tested benefits are calculated by aggregating the joint income and savings of a couple; if one partner’s income and/or assets are high enough for the couple to be ineligible, the other partner gets nothing[16]. The household ‘unit of assessment’ also implies that whoever is paid the benefit will share it; this is problematic for women because it ignores the potential unequal sharing of resources[17], in turn generating individual poverty[18]. This differs from other benefits that can be claimed as an individual (e.g. contributory benefits like Jobseekers Allowance or categorical benefits such as Carers Allowance).

Whilst UC assesses the ‘household’, couples must nominate one bank account for the whole of UC to be paid into (unlike the previous system where different benefits/tax credits could be paid to different partners).

Concerns about the single payment, particularly affecting women, include: 

The UC online claim process now includes a ‘prompt’ to encourage people to nominate the main carer’s bank account for the entire UC to be paid into[24].  However this does not resolve the concerns outlined above, nor does it apply to couples without dependent children.

Under the GB system, UC can be split UC between members of a couple, but this is discretionary, likely to be time limited and only in exceptional circumstances such as financial abuse, financial mismanagement and domestic abuse[25]. However survivors are often reluctant to disclose abuse to Jobcentre Plus, and fear that asking for a split payment would put them at risk of further abuse[26]. Work coaches often feel ill-equipped to deal with disclosures[27].

In Northern Ireland payment can be made into two separate bank accounts on request[28] and the Scottish Government is discussing how to make separate payments more routine[29].

There has also been previous interest in making separate payments of means-tested benefits to each partner in a couple, particularly as part of a ‘quid pro quo’ for increased individual conditionality[30]

More specific ‘losers’ – mixed age couples

Originally the DWP’s 2012 Impact Assessment[31] highlighted groups of claimants who could be ‘winners or losers’ from reform, estimating that around 3.1 million households would have higher entitlement and 2.8 million households would have lower entitlement. The IA suggested that the biggest gainers could be couples with children, followed by lone parents; those with lower UC entitlement[32] also include ‘mixed age’ couples. 

Where one partner is above and the other below Pension Credit (PC) age, instead of qualifying for PC the couple now has to claim UC. This means that the younger partner has to meet work-related conditionality as a condition of receiving UC,  at a time of life when caring responsibilities may arise or increase (one in five people aged 50-69 are providing care[33]) or may have poor health / disability themselves[34]. Some work requirements (work-focussed interviews, work preparation or job-search) are likely where someone is providing care for less than 35 hours a week or caring for someone who is not considered ‘severely disabled’ (the conditions for no work requirements). Also, as UC rates are lower than PC, many could be as much as £7,000 a year worse off[35].

This change disproportionately affects women as the younger partner is more likely to be a woman in heterosexual couples, and is currently a group already the most affected by the increase in state pension ages[36]. Whereas in 2010 a couple with a woman aged 60 with a partner aged 65 would be entitled to State Pension and potentially eligible for PC, since May 2019 they must wait an extra 6 years to be in this position[37]

Victims and survivors of domestic abuse

Other groups of concern include domestic abuse survivors, who are predominantly women[38]. Whilst there rules within the benefits system which support survivors, such as dual housing costs[39], exemptions that are intended to help may not actually do so in practice. Survivors are likely to be affected in particular by:

The DWP has stated that it is training staff in domestic abuse and has a domestic abuse specialist in every jobcentre[50]. Whilst more staff training is always welcome, and training and exemptions offer some recognition of abuse, such responses can deflect attention away from benefit structure and design, thus missing opportunities to narrow the scope for abuse and to promote gender equality[51].

Equality impacts

An important issue in understanding the impact of UC is the apparent lack of gender analysis underpinning some of the key policy decisions for UC.

The original equality impact assessment (EIA) of the UC white paper in 2010 highlighted some potential gender impacts[52], with UC offering opportunities and risks:

The gender equality section of the Welfare Reform Bill EIA in 2011 reiterated opportunities as arising from improved employment arising from the single taper (the rate at which benefit is withdrawn) and support with childcare costs[53] (based on the original design, although subsequent changes alter this[54]). Risks were noted as the lower work incentives for second earners, and the single payment. In relation to the latter there was no mention of evidence as indicated in the 2010 EIA. 

The subsequent 2012 Impact Assessment (IA) states that UC policy was ‘gender-neutral’, as when women and men are in the same circumstances, they are treated equally under UC. The DWP has also claimed in relation to migrating claimants onto UC that ‘no benefit recipient with a protected characteristic will be affected because there is no adverse or disproportionate negative impact on equality’[55]. However, in practice women and men are rarely in similar circumstances, and a neutral rule can be discriminatory if it has disproportionate impacts, potentially perpetuating gender disadvantages and non-compliance with equality obligations[56].

There have been concerns that EIAs of UC have not been updated[57]  and the published EIAs do not indicate that sufficient regard has been given to Equality Act obligations[58]. Concerns about the lack of official gender analysis[59] were also raised by the UN Committee on the Elimination of Discrimination Against Women[60].  

  1. Reforms to Universal Credit

The National Audit Office[61] has indicated that many of the claimed advantages of UC cannot be demonstrated but adds that reverting to legacy benefits would be too expensive. However, with evidence about its limitations and the hardship created, and with many thousands yet to migrate across to UC, there is a strong case to halt migration whilst other options are considered. This does not necessarily mean a return to previous benefits, but rather, to reconfigure the social security system in a different way.

As the WBG submission notes, a key principle is that means-tested benefits should be kept to a minimum. UC, as one large means-test, particularly disadvantages women. Means-tests target those on the lowest incomes, but are aimed at relieving poverty after it has occurred, rather than preventing it. In-work poverty

Whilst living in a one-earner household increases the risk of poverty, benefits like Child Benefit have a role to play in reducing in-work poverty; this has been the rationale over many years for predecessor payments such as Family Allowances, which recognised that one wage cannot provide for the needs of families with children[62].

One strategy would be to reduce the importance of UC in family incomes, for example by increasing direct provision of childcare rather than payments to individuals, and supporting women to increase their incomes through getting and staying in paid work, building on paid leave and employment-related benefits such as Maternity Allowance and provisions for maternity/paternity and parental leave[63].

The erosion of contributory and categorical benefits means that that the benefits with the greatest potential for economic independence have been significantly weakened. Whilst they remain separate benefits, the way that UC operates seems to negate this. Some claimants have apparently been told that they can no longer claim contributory Employment and Support Allowance or Jobseeker’s Allowance and directed to claim UC instead[64]; online claiming seems to work against getting contributory benefits separately[65], and people may be advised that it is not worth claiming an individual benefit if the means-test means that the household will be no better off.


Marilyn Howard - Hon. Research Associate, University of Bristol Law School and a member of the Women’s Budget Group 


2 March 2020




[1] Page 6 DWP (2010) Universal Credit: welfare that works. CM 7959

[2] Para 80 DWP (2012) Universal Credit: impact assessment

[3] See for example Gardiner (L) 2019 The shifting shape of social security.  Resolution Foundation


[5] NAO (2018) Rolling out Universal Credit.

[6] Wickham, S. et al (2020) ‘Effects on mental health of a UK welfare reform, Universal Credit: a longitudinal controlled study’. Lancet Public Health 2020; 5: e157–64

[7] ONS (2020) Employment trends: IFS (2018) The rise and rise of women’s employment in the UK

[8]  Eg WBG (2019) Social security and gender; WBG (2017) Intersecting inequalities; Bennett, F. (2018) ‘Gender and social security’ in Understanding social security. Eds Millar, J. and Sainsbury, R. 3rd edn. Bristol: Policy Press pp99-117

[9] Page 42 DWP (2012) Universal Credit: impact assessment

[10] Work and Pensions Select Committee (2018) Benefit sanctions. 2018)

[11] If both partners are in paid work of 16 hours/week or more they can choose who receives working tax credit.

[12] For example



[15] YouTube channel Universal Credit in Action.

[16] Bennett, F. (2011) ‘Universal credit: the gender impact’. Poverty, 140. 15-18

[17] For a review of research into income distribution within households over many years, see Bennett, F. (2013) ‘Researching Within-Household Distribution: Overview, Developments, Debates, and Methodological Challenges’. Journal of Marriage and Family 75 (June 2013): 582 – 597


[19] and WBG (2011) Welfare Reform Bill: Women’s Budget Group Evidence to Public Bill Committee; Keohane, N. and Shorthouse, R. (2012) Sink or Swim? The impact of the Universal Credit.  London: Social Market Foundation


[21] McKay, A and Scott G (1999) What can we afford? A woman’s role: money management in low income households. Glasgow: Glasgow Caledonian University, cited in Scottish Government (2012) Potential impacts of a move to household benefit payments. Welfare Analysis, October 2012. Edinburgh: Scottish Government 

[22] WBG (2012) Evidence to the Work and Pensions Select Committee inquiry HC 576 session 2012-13 ‘Progress towards the implementation of Universal Credit ‘.

[23] See for example Lister, R, Goode, J, Callender, C, 1999, Income distribution within families and reform of social security’, Journal of Social Welfare and Family Law 21(3) 1999: 203-220


[25] DWP (2013) Universal Credit: guidance on personal budgeting support: 11 February 2013.



[28] Though few such requests have been made: House of Commons Work and Pensions and Northern Ireland Affairs select committees (2019) Welfare policy in Northern Ireland


[30] Ingold, J. (2011), An International Comparison of Approaches to Assisting Partnered Women into Work, Working Paper no. 101, London: Department for Work and Pensions; McLaughlin, E., Yeates, N., and Kelly, G. (2001) Social Security Units of Assessment: an International Survey of the UK, Netherlands, Republic of Ireland and Australia and its Implications for UK Policy Reform. Trades Union Congress. For earlier modelling see also Lister, R. (1992) Women’s economic dependency and social security. Research discussion series no 2. Manchester: Equal Opportunities commission; Duncan, A., Giles, C., and Webb, S. (1994), Social Security Reform and Women’s Independent Incomes, Manchester: Equal Opportunities Commission

[31] DWP (2012) Universal Credit: impact assessment

[32] Other people with lower rates include those with higher tax credits entitlement (such as people with the 30-hour element), those with savings above the UC limit, and those with lower rates under UC compared to previous benefits/tax credits such as disabled people and those aged under 25. 

[33] ONS ( 2015) Living Longer: caring in later working life

[34] Centre for Policy on Ageing (2016) Diversity in Old Age: Disability

[35] Engender briefing

[36] Differences in ages of men and women at marriage is around 2.5 years:

[37] Age UK briefing



[40] Howard, M. and Skipp, A. (2015) Unequal, trapped & controlled Women’s experience of financial abuse and potential implications for Universal Credit. Women’s Aid/TUC

[41] Howard, M. (2019) Benefits or barriers? Making the social security system work for women in the four nations of the UK WBG.

[42] Whilst this limitation has been registered, data collected may in future be broad across complex needs rather than focusing on one particular group. Information is still collected on JSA easements but this is not considered robust enough to report in Parliament:, 2019, Social Security Benefits: Domestic Violence: Written question - HL13227


[44] NAO (2019) Supporting disabled people to work



[47] Howard, M. (2019) Benefits or barriers? Making the social security system work for women in the four nations of the UK WBG.

[48] Howard, M. (2018) Universal Credit and financial abuse: making the links, WBG.

[49] Howard, M. and Skipp, A. (2015) Unequal, trapped & controlled Women’s experience of financial abuse and potential implications for Universal Credit. Women’s Aid/TUC

[50] Home Affairs Select Committee (2019) Domestic abuse: Government Response to the Committee’s Ninth Report of Session 2017–19

[51] Howard, M. (2019) ‘Universal Credit and domestic abuse -‘after the event’ exemptions or prevention?’ Safe: the domestic abuse quarterly issue 65: 12-15

[52] DWP (2010) Equality impact assessment: Universal Credit: Welfare that works


[53] DWP (2011) Welfare  Reform Bill Universal Credit Equality Impact Assessment

[54] Hudson-Sharp, N. et al (2018) The impact of welfare reform and welfare-to-work programmes: an evidence review. EHRC








[62] Bennett, F. (2019) Rethinking low pay and in-work poverty,; Rathbone, E. (1940) The Case for Family Allowances Harmondsworth: Penguin



[65] CPAG seminar

[66] Including from the House of Commons Work and Pensions Select Committee ( and All Party Parliamentary Group on Universal Credit ( )

[67] There have been concerns that giving up Child Benefit could result in a loss of pension income in later years


[69] Howard, M. (2019) Benefits or barriers? Making the social security system work for women in the four nations of the UK WBG.