Better off in work?

Better Off In Work?

The government is doing all it can to ensure work is more attractive than benefits. But that’s about making claimants less comfortable as much as it is about making work pay

Work (or better paid work) is almost always now the better option, for those who are able to work and can find it. And the government has certainly tried to make sure employment pays better, ending the so-called benefit trap. But how this has been achieved has attracted criticism.

One way they’ve done this is by capping benefit payments. This means benefits can now only be a stop-gap if people want to provide for themselves and their family. Larger households have been affected worst because the maximum benefits any household can claim is £23,000 in London and £20,000 elsewhere.

Other parts of the government strategy is to offer incentives as part of Universal Credit. There are earnings allowances for families and a few others. These mean extra income is disregarded up to £503 a month if housing costs are not claimed or £287 otherwise. For everyone on UC, though, for every pound earned 63p is deducted from benefits. Keeping 37 pence for every pound earnt is way better than how Jobseekers Allowance seemed to punish people starting to work.

For other groups on benefits, campaigners have argued there are winners and losers when they move onto UC and try to start work. In 2018, the BBC quoted analysts who claimed “working families will be worse off than under the current benefit system, with the biggest losers likely to be people with children who are currently in receipt of tax credits”. The then Minister at the helm of UC said claimants would have to earn their way out of difficulty.

In other ways, the government has put pressure on employers to pay more. Its National Living Wage (not the real Living Wage) increases each year. This also helps make work more attractive for those who are able to work and able to find it.

Online benefit checkers from EntitledTo or Turn2Us can also help us see how our benefits are affected if we start working. Just include the number of hours you might work in future and the rate of pay. With UC coming on-stream, the incentives to work (for many but not all people) can be huge. Follow this link and try it out – we literally have nothing to lose.