Restoring the universal credit promise to make work pay

Published on 17 February 2017

Summary

While the government undertook a U-turn on tax credit reforms in 2015 to avoid an overnight income cut for low income working families, it did not stop a similar cut to universal credit. With a new government agenda, Gingerbread is calling on policymakers to ensure the promise to make work pay and help ‘just managing’ families is fulfilled.

Single parents – two-thirds of whom work – are hit particularly hard by the cut to the universal credit work allowance and delay to promised childcare support (the latter as a result of the slow roll-out of universal credit). Low-paid working families face poorer work incentives and far lower incomes as a result.

Key findings

The government can make work pay and fulfil its aim to help the ‘just about managing’ by:

  • Reversing cuts to universal credit (UC) work allowance – the average working single parent loses around £800 a year from the work allowance cut alone; some will lose well over £2,000 a year
  • Restoring promised support for 85 per cent of childcare costs under tax credits – the slow roll-out of universal credit means many working single parents won’t see extra support for some years, meaning it still won’t pay to work more hours.