Government plans to take account of surplus earnings when people return to Universal Credit are to be reviewed by an advisory committee.
The change, aimed at those who claim the benefit within six months of leaving it, could delay claims by up to six months. It is expected to save up to £300m when introduced in 2016.
The Government said the move is designed to ‘ensure greater fairness between workers who have regular earnings patterns and those whose earnings fluctuate’.
The Social Security Advisory Committee has launched a public consultation on the plans. Committee chair Paul Gray said: ‘It is perfectly reasonable for the Government to put measures in place that will prevent manipulation of the system in order to maximise entitlement to Universal Credit.
‘However, it would be unfortunate if those in genuine need were penalised by a measure intended to address potential abuse. This could have a considerable impact on those whose circumstances have changed unexpectedly requiring them to make a repeat claim for Universal Credit.
‘I understand that the department will advise claimants moving off Universal Credit that surplus earnings will be taken into account if they return within six months, and it can therefore be argued that individuals could prepare financially for such an eventuality.
‘But very few of us in that situation would be able to resist using the opportunity of having work – or better paid work – to improve the living conditions of our family.’
