Although “welcome” changes Universal credit (UC) in budget According to the new analysis.
this government It was announced in the budget that the University of California’s declining rate-the amount of benefits charged for every £1 in excess of the claimant’s work allowance-would be reduced by 8% in “a few weeks”, from 63% to 55%.
But the Resolution Foundation Said that after the early end of the £20 per week UC promotion, the situation of about 3.6 million families will still get worse.
The think tank’s analysis found that these changes will benefit 1.3 million high-income families who accept UC.
For example, under these new regulations, a single-income couple with two children and an income of £30,000 will receive £2,800 in UC, up from £2,200 before the £20 raise is cancelled.
The foundation said that for 3.6 million families—including all non-working UC families and working but low-income families—these changes will not make up for the impact of the cancellation of UC subsidies.
It added that more than half of UC households still lose more than £1,000 a year.
…Due to the shrinking cost of living, nearly three-quarters of UC households will see their income drop this fall
Karl Handscomb, senior economist at the think tank, said: “The Chancellor of the Exchequer announced in his budget last week two very popular major changes in universal credit, which will increase the income of low- and middle-income working families.
“As the marginal effective tax rate has fallen to levels ten years ago, these changes will enable millions of workers to retain more income. Another 330,000 families will also be eligible for Universal Credit.
“Although popular, these changes are not enough to offset the damage to Universal Credit from the recent £20 weekly cut. Although 1.3 million families using Universal Credit will have better lives, nearly three-quarters of them are due to the shrinking cost of living. The income of the University of California family will fall this fall.
Mr. Handscomb said the University of California performed “very well” during the pandemic.
“But the recent cuts in support mean that our basic safety net is still too weak to support families facing bad economic news,” he added.
Analysts have previously described that Chancellor Rishi Sunak’s third budget has raised the country’s tax burden to the highest level since Clement Attlee took office. labor The government of the 1950s frustrated many Conservative Party members.
