Concerns raised over cost of Universal Credit

The Financial Times (£) reports that the Resolution Foundation think tank has published a report claiming that Universal Credit  risks creating incentives for people to limit their working hours so they can continue receiving benefits, as the design of the policy did not take into consideration changes in the labour market, namely low pay and the rise in self-employment.

The report suggests that the “work allowance” benefit (the level of earnings that is disregarded when entitlements to benefit are calculated) creates incentives to work part-time under the minimum wage, while changes in Working tax Credit also remove the incentive to work at least 16 hours a week.