Usdaw’s analysis reveals that a couple with children, both working in retail, earning just above the so-called ‘National Living Wage’, one working full-time and one part-time, would be £1,866 worse off on Universal Credit.
A worker on Universal Credit earning the National Living Wage of £7.20 an hour, takes home just £7.24 for doing an additional 4 hour shift. That amounts to £1.81 per hour, often barely covering their travel costs.
John Hannett – Usdaw General Secretary says: “Universal Credit will plunge far more working families into poverty, which will be almost impossible to work their way out of. We supported the initial intentions of Universal Credit, to simplify benefits and improve incentives to work. However, severe cost cutting has turned Universal Credit into a real threat to the incomes of low-paid working families.
“In the Autumn Statement the Chancellor announced a very modest reduction in the high clawback rate of 65% of net earnings to 63%. Whilst this is a tiny step in the right direction, it is worth less than £300 for most working parents. It went nowhere near offsetting the enormous £2000 to £3,000 cuts that Universal Credit represents or taking the taper back to the original 55%. Over 90% of the cuts are still being applied to Universal Credit, which is a ticking time bomb that will leave many working families much worse-off when they are transferred onto it.
“Today’s Budget does little to deliver on the Prime Minister’s pledge to support families struggling to make ends meet. Increases in the personal tax allowance are welcome, but do not help the poorest working families who do not currently pay income tax. Neither does raising the allowance come close to compensating for the enormous loss of tax credits income they have suffered since 2010.
“Today’s Budget still leaves low and middle income workers facing a struggle to secure the income they need to meet the basic costs of living.”
Notes for editors:
Usdaw (Union of Shop, Distributive and Allied Workers) is the UK's fourth biggest with nearly 430,000 members. Membership has increased by more than 17% in the last five years and by nearly a third in the last decade. Most Usdaw members work in the retail sector, but the Union also has many members in transport, distribution, food manufacturing, chemicals and other trades.
For Usdaw press releases visit: www.usdaw.org.uk/news and you can follow us on Twitter @UsdawUnion