Work Must Pay: The Principle Behind Universal Credit

The principle behind the Universal Credit is simple. Its intention is to make work pay and to ensure that the transition to employment from unemployment is as smooth as possible. As it replaces six existing benefits, it will ultimately be an easier system to use. Income-based Job Seekers Allowance, income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit and Housing Benefit will all come into one payment. One of its main advantages is that it is withdrawn at a slower rate for those moving from unemployment to work, as of the last Budget at 63%, so that any form of work will make a claimant better off because for every pound earned thirty eight pence will be kept rather than being wiped out by the loss of benefits. It also mimics employment. Those who have salaries do not receive different payments from their employers for their housing costs, nor are there bills paid directly. Most firms pay monthly rather than weekly or fortnightly and do so directly into a bank account.

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