John Hannett Usdaw General Secretary says: “The Chancellor has the opportunity to restore the initial intentions of Universal Credit, to simplify benefits and make sure people are better off in work. He can reverse the severe cost cutting that will leave millions of working families thousands of pounds worse-off.”
Usdaw would like to see three fundamental changes to UC that will help get the troubled project back on track, to support not penalise working families:
1. Increase the ‘work allowance’ and reduce the ‘clawback’ to provide a genuine incentive to enter employment and progress in work.
2. Lower the six-week waiting time to counter unnecessary hardship.
3. Address the systemic problem for claimants on weekly and 4-weekly pay.
John Hannett continues: “The six week wait under Universal Credit is an unnecessary hardship on low and middle income families, it doesn’t reflect employee’s pay arrangements as the Government says. The waiting time should be reduced as soon as possible, as Parliament unanimously voted for last week.
“There is also a particular concern for those workers who are paid every four weeks or weekly because UC assesses claimants’ income by calendar month. So once a year four-weekly paid workers have two pay days assessed in one calendar month. Four times a year the weekly paid have 5 pay days assessed instead of 4 in a calendar month. When this happens, claimants may lose their entitlement to UC and have to reapply.
“This is a simple failure to understand the pay arrangements of many low and middle income workers. Most major retailers pay their staff every four weeks, giving them 13 pay days a year and there are still many weekly paid workers, particular in small and medium sized enterprises.”
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 a year worse off when transferred from tax credits to UC. Also, a worker on UC doing extra hours and earning £7.50 an hour, takes home just £1.89 per hour, often barely covering their travel costs.
John Hannett concludes: “The Government needs to restore the original purpose of UC, to encourage entry to and progression in work. The low work allowance and high clawback of net earnings are particular disincentives.
“The Prime Minister has talked about helping families who find it difficult to make ends meet, but we have seen no progress and in fact many working people are becoming worse-off. With the cost of living rising, working families need the Government to change course and provide the support they need.”
Notes for editors:
Usdaw (Union of Shop, Distributive and Allied Workers) is the UK's fifth biggest trade union with over 430,000 members. Membership has increased by 28% over 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: http://www.usdaw.org.uk/news and you can follow us on Twitter @UsdawUnion