Rugby parents with children in childcare may be worse off under changes to the benefits system, according to a cross-party group of councillors.
A specially-formed ‘task group’ believes that the new Universal Credit system will reward work – but that some in town will lose out. Rugby has been chosen as one of a handful of towns where the scheme will be tested in November.
Universal Credit will replace six of the main means-tested benefits and tax credits including JSA, income support, ESA, tax credits, housing benefit and support for childcare costs.
The borough council’s Universal Credit and Welfare Reform Task Group reported earlier this month that it is “clear from the calculations that Universal Credit would reward work.”
But the group added: “Some claimants with children in childcare would be worse off under the scheme.”
The councillors also discussed anomalies in payments. For example, as Universal Credit is calculated on a monthly basis, some salaries are often calculated on a four-weekly or weekly basis.
The group also highlighted “financial risk” and “reputational risks” for the council due to increasing rent arrears. In addition, members described the software package for the scheme as “currently very limited”.
Earlier this month the National Audit Office also criticised the Government’s approach to Universal Credit, citing “weak management, ineffective control and poor governance”. But it added that the changes would bring improvements if those in charge learn from their mistakes.
Rugby MP Mark Pawsey believes the changes will bring significant improvements.
He said: “I have looked at the report from Rugby Borough Council’s Universal Credit and Welfare Reform Task Group. It recognises that Universal Credit will help people back into work and it also draws attention to the importance of childcare, and that is why the Government is committed to investing an additional £300m into childcare support.
“The Government has already taken steps to address issues raised in the recent National Audit Office report.
“It should be noted that this report concludes that Universal Credit will deliver a fundamental benefit to society of about £38 billion by 2022-23.
“I believe the majority of the people in Rugby will agree with me that work should always pay, and that the system needs to be fair to the tax payer as well as those who need support.”
Only “straightforward cases”, for example, single people without children and without caring responsibilities who are ‘job ready’, will be switched to Universal Credit when the system is introduced in Rugby,
See page 11 for more on the implications of Universal Credit for people in Rugby.
WILL YOU BE AFFECTED BY THE CHANGES?
Universal Credit will replace six of the main means-tested benefits and tax credits including Job Seekers Allowance, income support, ESA, tax credits, housing benefit and support for childcare costs
There are no limits to the number of hours you can work a week. Your Universal Credit payment will reduce gradually as you earn more, so you won’t lose all your benefits at once if you’re on a low income