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.
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.
Universal Credit also makes it more attractive to be in work. Anyone with dependent children living with them, can earn up to a certain amount before anything is deducted from their benefits. This ‘work allowance’ also applies to some people with health conditions limiting how much they can work. How much we keep is affected by whether we claim money towards rent or not. There are earnings allowances for families and a few others. These mean extra income is disregarded up to £512 a month if housing costs are not claimed, or £292 otherwise*.
For everyone on UC, though, for every pound earned 55p is deducted from benefits – this is called the taper rate. Keeping 45 pence for every pound we earn is way better than how Jobseekers Allowance seemed to punish people starting to work.
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.
With UC the incentives to work (for many but not all people) can be huge. We literally have nothing to lose.
*Figures correct as of March 2021.