The economics of Universal Credit

How well has Universal Credit met its original objectives?


In some ways it has and in others it has not.


Making working pay for example: As there is no limit on the number of hours you need to work (as was the case with tax credits) people can still get a top up when they didn’t before. As people earn more Universal credit tapers off.


Simplify the benefits system:  As Universal credit is one benefit, it is easier for people who maybe were unemployed and then go into work because they don’t have to make a new claim for a new benefit they just need to report their change of circumstances. Similarly, when people lose their jobs they do not need to make new claims.


People do not keep asking for benefits to be reprocessed when income changes as it done every month as part of the Universal credit process automatically.   With housing benefit and tax credits before there were often overpayments created. This is less likely to happen with Universal credit as income is accessed monthly.


Were the original objectives and assumptions the right ones?

The objectives to Incentivise paid work & Simplify the benefits system are good objectives however whether this is the case for claimants depends on their circumstances.



Re: Incentivising paid work:



What have been the positive and negative economic effects of Universal Credit?
















Which claimants have benefited most from the Universal Credit reforms and which have lost out?





How has the world of work changed since the introduction of Universal Credit?


I think there is a rise in employers offering zero-hour contracts however I am not sure whether this has increased specifically with the introduction of Universal credit.


Does Universal Credit’s design adequately reflect the reality of low-paid work?




If Universal Credit does not adequately reflect the lived experiences of low-paid workers, how should it be reformed?



28 February 2020