The roll-out of Universal Credit will mean a “significant number” of people will receive less financial support, a senior official with the Department for Work and Pensions (DWP) has said.
Peter Searle, policy director for working age benefits with the DWP, told MSPs that more was being spent on Universal Credit than on the system it replaced, adding this meant “on average people will gain”.
However, he also told Holyrood’s Social Security Committee: “Some people, as you say, and a significant number of people will receive less than they would have done.”
His comments came after Donna Ward, DWP policy director for children, families and disadvantage, said the change to Universal Credit meant there were “definitely winners and losers”.
Universal Credit – a six-in-one benefits payment – was introduced as part of the UK Government’s overhaul of the welfare system.
Critics say cuts to payments, delays in receiving initial payments and widespread problems with its implementation have led to many people falling into hardship or dropping out of the benefits system altogether.
The DWP officials were pressed on the issue after research by the independent Scottish Parliament Information Centre (Spice) found “examples of families worse off and better off under Universal Credit” when comparing payments under the system in 2016 to tax credits paid out in 2010.
Looking at the example of a single parent with two children aged two and five, and earning the national living wage, Spice calculated they would be worse off under Universal Credit, regardless of whether they worked 12 hours, 24 hours or 40 hours a week.
A couple in the same circumstances – with two children of the same age and also on the national living wage – would be worse off if they are employed for 40 hours a week, but would receive more cash if they worked 12 or 24 hours a week
Ms Ward said: “Typically, families with children are likely to gain if they work relatively few hours.
“The person on 12 hours ought not to have qualified for tax credits at all, whereas they would qualify for universal credit.
“I’ll obviously have to look at the examples. It also depends if people make use of the childcare offer and other things.
“So, there are winners and losers because we are bringing people into the in-work benefit system even if they only work one or two hours, whereas the tax credit system was very much at particular points on the earnings distributions.
“I’m not surprised there are some losers but there are also some gainers.”
She told the committee that the Universal Credit system was “really well-designed to get people into work in the first place but then also to smooth their incentives to work more”.
SNP MSP George Adam said Mr Searle’s comments “sadly confirm what most of us were already aware of – a ‘significant number’ of people will receive less financial support through the roll-out of Universal Credit”.
He stated: “It will come as no comfort to those forced to use foodbanks to hear UK Government officials speak about ‘winners and losers’ in a system that, by their own admission, will see many people left worse off.
“Communities the length and breadth of Scotland are already bearing the brunt of heartless Universal Credit system that is riddled with flaws – it’s time the roll-out was paused and Universal Credit fixed.”