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Universal Credit will hit 1.9 million by over £1,000 per year with disabled people worst affected

24 April 2019

Almost 2 million people will lose more than £1,000 a year following the switch to universal credit, with those claiming disability benefits the worst affected, according to research by the Institute for Fiscal Studies (IFS).

The IFS say that 22% of those with a disability, or those who live with someone with a disability, lose at least £1,000 p.a. from Universal Credit, compared with 14% for other claimants.

Those who are disabled or live with a disabled person are especially likely to be persistently, rather than temporarily, poor, says the IFS.

The effect of Unviersal Credit on those with disabilities is particularly significant and complex, with both large giveaways and takeaways depending on particular circumstances.

The IFS highlight that:

"Those who are disabled or live with a disabled person are especially likely to be persistently, rather than temporarily, poor. The effect of universal credit on those with disabilities is particularly significant and complex, with both large giveaways and takeaways depending on particular circumstances:

  • After transitional protections have expired, those who would have been entitled to the ‘severe disability premium’ - paid to those who generally live alone and struggle with basic living activities such as preparing food - can receive as much as £2,230 per year less in universal credit than they would have under the previous system;
  • Others - those whose health is not deemed to affect their basic living activities but is deemed to substantially constrain their ability to do paid work - can receive £1,120 per year more under universal credit."

Tom Waters, Research Economist at the IFS said:

"Universal credit changes benefit entitlements for three-quarters of those entitled to means-tested benefits, and 30% see a change of at least £1,000 per year.

The biggest losses experienced as a result of the switch are mostly down to a small number of specific choices the government has made about universal credit’s design, such as its treatment of the low-income self-employed and people with financial assets.

Many of those very large losses do turn out to be temporary for those concerned. However, even when measuring people’s incomes over relatively long periods, universal credit still hits the persistently poor the hardest on average."

Universal credit and its impact on household incomes: the long and the short of it is available @ www.ifs.org.uk.