Source · Select Committees · Scottish Affairs Committee
Recommendation 108
108
Neil Cowan from The Poverty Alliance told us that with current work allowance arrangements have...
Conclusion
Neil Cowan from The Poverty Alliance told us that with current work allowance arrangements have led to employment ‘becoming less, rather than more, reliable as a route out of poverty.’279 Nina Ballantyne of Citizens Advice Scotland called for the work allowance to be increased so that people can take on work ‘without being terrified it is going to affect their allowance straightaway’.280 They went on to highlight that this would allow for Universal Credit to ‘be part of the economic recovery’.281 Extending the work allowance to all workers was also noted by Citizen’s Advice Scotland in their written evidence as an important way for all households to recover from the covid-19 income crisis: Particularly in the current uncertain economic climate, the ability to take on what could be precarious work, safe in the knowledge that a person’s UC entitlement will be unaffected until they earn over the Work Allowance threshold would help bring more financial certainty to many people.282
Government Response
Not Addressed
HM Government
Not Addressed
Universal Credit aims to reduce the number of workless households by reducing financial and administrative barriers to work. The 63% single earnings taper rate ensures that payments reduce in a transparent and predictable way as earnings increase. A work allowance is an amount that claimants can earn before their Universal Credit starts to reduce by the taper rate. The work allowance is targeted on those claimants with the greatest barriers to the labour market namely those responsible for children or who have limited capability for work. The UK Government has no plans to extend the work allowance to single adults. The work allowance is increased each year as part of the normal benefits uprating process. In addition, at the Autumn 2018 budget, an extra £1.7 billion a year was put into work allowances to increase them by £1,000 in April 2019, strengthening the Universal Credit work incentives even more and providing a boost to the incomes of the lowest paid. This resulted in 2.4 million families keeping up to an extra £630 per year of what they earn.