Think Tank Warns Universal Credit Struggling to support Long-Term Sickness
The Resolution Foundation pointed out that the designers of Universal Credit did not anticipate 2.3 million individuals using the system due to their inability to work because of health reasons.
Universal Credit will require adjustments as it was not designed to accommodate the significant increase in the number of people facing health issues or disabilities, as per a report from a think tank.
According to the Resolution Foundation, unemployment decreased from 8.5 percent in 2011 to 3.8 percent in 2023 after the benefits system was reformed. However, the number of claimants out of work due to ill health has risen to 2.3 million, nearly twice the figure when Universal Credit was introduced in 2013.
The report also highlighted the impacts on disabled individuals, particularly single people with disabilities preventing them from working and lacking a full-time carer.
Universal Credit Moved Unemployed Into Work More Quickly
The report indicated that working renters have benefited the most from the reforms to the benefits system. These reforms integrated various former benefits into Universal Credit over a decade ago.
For instance, a couple with two children renting a property with an average Local Housing Allowance for a two-bedroom unit will be entitled to increased Universal Credit compared to legacy benefits.
A single parent renting and working 30 hours per week at the national living wage would also see a substantial increase in their annual income under Universal Credit compared to the old system.
The Resolution Foundation noted that Universal Credit represents a net saving for the government compared to legacy benefits. However, many families find themselves worse off with Universal Credit due to overall cuts in working-age support.
Universal Credit Britain
Alex Clegg, an economist at the Resolution Foundation, pointed out the need for changes in Universal Credit to address the new challenges faced by an older and sicker population.
He noted that there have been significant reductions in entitlement under the working-age benefit system and emphasized the importance of adapting Universal Credit to cater to a growing number of claimants with health issues or disabilities.
The report mentioned that both major political parties do not intend to eliminate Universal Credit, indicating that the future government will govern a “Universal Credit Britain,” encompassing 7 million families by 2029.
A Department for Work and Pensions spokesperson highlighted the positive outcomes of Universal Credit, mentioning increased benefits provided to households and initiatives to support individuals in finding and retaining employment.
Mental Health and Universal Credit
Recent statistics from the Department for Work and Pensions revealed that mental and behavioral disorders were recorded in a significant number of Universal Credit Work Capacity Assessment decisions, highlighting the need for improved access to mental health services.
The department is working on expanding mental health services to address the primary reasons for sickness absence and support individuals with complex health issues.
PA Media contributed to this report.
