universal credit

Employment And Support Allowance Replaced By Universal Credit

The benefit, which was introduced in 2008, replaced incapacity benefit, income support, and severe disability allowance, and has now become obsolete due to the creation of Universal Credit. The government also wants Universal Credit to replace working tax credits, child tax credits and housing benefits. The Credit was introduced back in July 2014, in Bury and Whitefield job centres, as a trial for whether the Credit system would work around the country, and it’s initial aim is to ensure that people are better off in work than on the credit. The success of the trail ensured its implementation around the UK from Tuesday this week. It currently only applies to single claimants without children. Work and Pensions Secretary Stephen Crabb said Universal Credit is transforming welfare. He added that:

“It helps make work pay, with claimants moving into work faster and earning more. Over 450,000 people have made a claim to Universal Credit so far, with over 9,500 new claims made every week. Universal Credit is revolutionising the welfare state”

Lord David Freud, the Welfare Reform Minister, said this about the system: “The driving force of our reforms was to create a welfare system that allows people to break free of dependency and move into work. Universal Credit is different to the old system because it stays with a claimant as they move into work, and for the first time ever, low-paid workers are helped to increase their hours and their earnings.”

However, Universal Credit came under fire before its deployment into job centres throughout the country. Iain Duncan Smith, who originally introduced Universal Credit during his time as the Work and Pensions Secretary, resigned from the position back in March, after stating that he could not support the changes made to benefits that penalized the poor and vulnerable. He said that the benefit system is in danger of drifting in a direction that divides society rather than unites it.

universal creditThe new Work and Pensions secretary, Stephen Crabb, has been urged to reclaim Universal Credit from the treasury by a number of groups. The Resolution Foundation has warned that there are serious flaws in the design of the welfare, and have stated that it has been taken too far away from the original design of the system due to cuts in the welfare budget. The Foundation also argues that UK welfare is an at all all time low, with two out of three poor children living in working families. They believe that the treasury “should focus on boosting incomes, by encouraging entry into work among second earners, and by supporting pay progression for all recipients.”

The way Universal Credit has changed since its initial introduction, is that the treasury imposed cuts on the amount that working families would receive if they applied for the benefit. The Foundation believes that this will detrimentally affect the home life of some working people. David Finch, senior economic analyst at the foundation, believes that the Secretary of State should reclaim the project from the Treasury.  However, in an interview with BBC radio this week, Stephen Crabb said that he believed that the system was “already working” and “doing what it was originally intended to do”