The review announced by the thinktank The Resolution Foundation, will look at how Universal Credit is functioning and the potential for success of incentives to work.
Reporting on the launch of the review, the Guardian’s political editor Patrick Wintour states:
“Initial work by the Resolution Foundation shows that by 2018 cuts to the basic and work allowances will mean UC is £685 a year less generous for a lone parent with two children, saving the government £1.7bn a year.”
“The structure of UC may be badly targeted to protect second earners, according to Resolution Foundation. At present, a second earner under UC can lose as much as 76% of their earnings once they make enough to pay income tax.”
“The review will also see whether the coalition was wise to omit council tax support from UC. There has been widespread concern that a household receiving UC will see its earnings eaten away by the means-testing of council tax support.”
“The review will look at how those in work may face loss of UC if they cannot show jobcentre staff they are unable to earn more than £220 a week. If they are earning less than this they may be required to take a different job or work longer hours.”
“It appears that claimants of UC could face the same sanctions regime as is applied to claimants of jobseeker’s allowance if they cannot show they are seeking longer hours, but there is much scepticism about how this would apply. Similarly, the self-employed under the UC regime will be subject to interviews to see that they are truly gainfully employed.”
“Finally, the review will examine the way tax cuts prioritised for after the election could be undermined by the impact on UC. The review team suggests families receiving UC will lose at least £65 out of every £100 tax giveaway, and £72 in every £100 where council tax is already withdrawn.”