The government argues that cutting UC health will incentivise people to work. But this unlikely...

♿ People on UC health have work-limiting conditions
🏢 There are limited accessible jobs
🎫 Being on UC health gives access to one of the most work-supporting benefits (the work allowance)

The full briefing can be found on @citizensadvice.bsky.social website under those links:

▶️ Summary: www.citizensadvice.org.uk/policy/publi...

▶️ PDF version: assets.ctfassets.net/mfz4nbgura3g...

The UC review needs to focus on empowering claimants, not only by improving incentives to work (such as work allowance and the taper rate), but by reducing systemic barriers to work, providing specialist support based on mutual respect, and offering a genuine safety net.

While making work pay is vital, the language of 'incentives' can oversimplify the realities of entering the labour market. It assumes people choose not to work - but for many UC claimants, stable employment with opportunities to progress has been out of reach for months or even years.

5. Living on empty is not a good starting point when looking for work: it shifts the focus from securing a job to everyday subsistence.There are also many costs associated with working, especially childcare and travel, which could be key factors preventing people from working.

4. In general, experiences of poor UC administration can make people skeptical about entering employment. People fear that if they try work, they will not be able to return to benefits and can accumulate debts. Some are worried that if a job does not work out, they would be sanctioned for leaving.

UC payment fluctuations are often unexpected. They can be stressful, make budgeting difficult, and can push claimants into debt. When this happens repeatedly, it can affect people’s ability - and willingness - to stay in work at all.

3. Pay cycles do not always align with UC assessment periods. This can skew UC payments, because the system ‘thinks’ claimants earned significantly more or less than usual, even though their actual earnings stay the same. This often results in a reduced UC award.

▶️ WA is limited to those receiving health/child element of UC. Although these groups do face complex barriers to work, other claimants could hugely benefit from WA (they already receive less UC).

▶️ Second earners in couples are excluded from WA, which means their work is effectively valued less.

2. Some claimants are eligible for work allowance (WA), which means their UC does not taper off straight away after receiving earnings. This is an important measure, with a potential to relieve the pressure of the additional costs of employment. However, the eligibility for it is too narrow. ⬇️

The second graph shows the actual value of each pound claimed for the same client, depending on hours worked weekly, with and without travel costs. These are compared to the intended 'value' of £1, i.e. the taper rate (45p).

This is on top of other costs, such as travel to work or childcare. The graph below shows the additional in-work deductions for one of Citizens Advice clients. In this case, full-time employment would mean that they could only keep 30p from every £1 earned (due triggering CT and other taxes).

1. The taper rate means that for every pound earned, UC is reduced by 55p. This allows claimants to keep some of their entitlement. But, the actual reduction is often higher than 55p as earnings can trigger NI and income tax liability, as well as termination of Council Tax Support (CTS).

The elements of UC designed to encourage work range from ensuring people are financially better off (e.g., taper rate and the work allowance) to penalising people for failing to take active steps towards work (conditionality and sanctions). Those, however, not always work as intended⬇️