The Department for Work and Pensions (DWP) boss Amber Rudd just announced another change to Universal Credit. But like her previous stunt of claiming to halt the move of three million people onto the benefit when she wasn’t, it was little more than a sleight of hand. Because she is merely giving families back
The DWP: smoke and mirrors
Rudd told Sky News on 10 January that she was ditching the two-child limit for children born before April 2017. The extension of the policy was due to take effect in February. It would have meant that claimants whose third or subsequent children were born before April 2017 would have been affected for the first time.
But Rudd said:
It’s with the fairness of Universal Credit in mind that I decided to scrap it. It’s right that we have a two-child policy when people are thinking about having a third child. But I don’t think it’s right that you have this existing two-child policy that was introduced recently acting retrospectively for people who might have three, four, or five children
Sky News claimed the DWP said that around 15,000 families “could benefit” from Rudd’s U-turn. But that figure is nowhere near the number the department previously said was affected.
As The Canary previously reported, joint analysis from the DWP and HMRC shows that as of 6 April 2017, just under 865,000 households with a third or subsequent child were claiming Child Tax Credits or Universal Credit. Of these, the departments claim 70,620 reported a third or subsequent child after 6 April 2017, and that resultantly they weren’t receiving either benefit for at least one child.
But what the data from the DWP and HMRC doesn’t tell you is what’s happened to around 791,000 households (from the above figures) that were previously getting either Child Tax Credit or Universal Credit for a third or subsequent child before 6 April 2017. Previously, the Child Poverty Action Group suggested that many of these families may also eventually be hit:
Now Rudd’s announcement appears to indicate that this may no longer be the case. So, with such previously large numbers of people being
Pulling a fast one?
But what the department hasn’t said is that due to other changes under Universal Credit, it is merely giving back some of the money families were losing out on, anyway.
As Citizens Advice research showed, around 2.1 million working households already claiming benefits would be worse off under Universal Credit. Some of this is due to the taper rate being set at 63%; meaning people would keep 37p in every pound they earned. But this is only for people who don’t pay tax or National Insurance. For people who do, the rate is 25p. As Citizens Advice noted:
these taper rates still leave low income households on UC significantly worse off than households on legacy benefits, who keep 59p of every additional pound they earn after tax and National Insurance.
Its research also showed that many people would not be able to earn their way out of the losses of moving onto Universal Credit. Citizens Advice said that around one million working households would be hit.
Moreover, the DWP’s ‘transitional protections’ for claimants moving from old benefits onto Universal Credit seem unfit for purpose. The Resolution Foundation estimates that less than 20% of tax credits-claiming families would get these when they moved onto the new benefit.
“Borders on eugenics”
The Canary asked the DWP for comment. But it had not responded at the time of publication.
But of course, none of this matters if you’re planning on having a third or subsequent child now. Because the DWP will still refuse to give you any money for them. One teaching union leader called the policy:
nothing short of shameful and borders on eugenics. It is certainly an attempt at social engineering.
So, Rudd’s U-turn on 10 January is piecemeal. Just like her previous Universal Credit stunt this week, it’s smoke and mirrors. The DWP boss is desperately plugging holes in a benefit leaking so much it has nearly sunk.
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