Nursery World - 'Winners and losers' under Universal Credit

Around 1.4 million families will be worse off under the Government's new Universal Credit, including single parents, according to an analysis by the Institute of Fiscal Studies.

The single benefit is due to replace most means-tested benefits and tax credits for working-age adults. But the IFS report says that it will create 'winners and losers'. On average, couples with children will gain more than childless couples, who in turn will gain more than single adults without children. Lone parents will lose in the long run.

The report found that the Universal Credit will strengthen the incentive to work for those who have the lowest incentive to work under the current tax scheme, because earnings will reduce the credit award at a rate of 65 per cent. This is a much lower rate than under the current set of means-tested benefits.

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