Universal credit changes risk tipping 180,000 claimants 'into crisis', DWP warned (2024)

Single parents balancing childcare alongside work are likely to be among those impacted by the changes to universal credit. Image: Pexels

Around 180,000 people across the UK will have to look for more work as the Department for Work and Pensions (DWP) changes the rules for universal credit.

People who are currently working fewer than 18 hours a week on national living wage will now have to seek extra work, when previously they only had to work 15 hours.

There are fears the change will disproportionately impact single parents and risks “tipping them into crisis”, as well as younger workers and carers.

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From Monday (13 May), the administrative earnings threshold (AET) – the minimum amount people on universal credit are expected to earn every month if they are fit to work – will rise.

It means individuals now have to earn £892 per month, which is 18 hours a week on national living wage. Couples have to earn £1,437, which is 29 hours a week on national living wage.

Michael Clarke, head of information programmes at anti-poverty charity Turn2us, says: “We have serious concern over the changes to the universal credit system effective today. This significant increase in AET demands that part-time and gig economy workers, including many single mothers, find additional or better-paying work to maintain their benefits.

“These changes severely challenge those managing jobs with irregular or fluctuating incomes and carefully balanced responsibilities like childcare. The system, seemingly designed for consistently regular incomes, fails to accommodate the reality of those on the financial edge.”

If claimants are earning less than the AET in an assessment period, they will have to show the DWP they are actively looking for more or better-paid work. They must also be available for work, or risk sanctions.

Every year, the DWP hands out around 500,000 sanctions to benefit claimants, and that is set to increase with government’s stricter policies.

It will not, however, mean that people have their universal credit immediately removed, and it will not impact those who have limited capability for work and work-related activity.

The DWP has confirmed that more than 180,000 universal credit claimants will be moved into the ‘intensive work search group’ from the ‘light touch group’ – and they will have to see a Jobcentre work coach more frequently.

Clarke added: “For single mothers and others on razor-thin margins, these adjustments risk tipping them into crisis, exacerbating financial instability and mental stress as they struggle to meet these new demands.We urge a reconsideration of these changes, which disproportionately affect younger workers, part-time employees, and single parents.”

It follows previous changes to AET in recent years. The threshold had been set at nine hours but was increased to 12 hours in September 2022. It was then increased again to 15 hours in January 2023.

Unite the Union pointed out that these changes will “further punish the poorest workers”, “increase workplace stress” and push low-income households into “deeper poverty”. It estimates that the changes will impact around 500,000 people overall.

It comes as the government continues its drive to push benefits claimants into work, with a series of welfare reforms which Rishi Sunak claims will eradicate what he calls a “sick-note culture”.

The prime minister said: “Welfare should always be a safety net and not a lifestyle choice, which is why we’re ushering in a new era of welfare reforms to help more people progress off benefits and into work.

“Today’s changes will help more people on universal credit move into well paid jobs and progress towards financial independence – which is better for them and for economic growth.”

A report by the Social Security Advisory Committee previously warned work and pensions secretary Mel Stride of the risks of the changes to AET.

It said that the DWP must address the “potential adverse impacts on vulnerable claimants and ensure the policy’s implementation does not lead to hardships”, recommending a phased-approach to implementation focusing on people who are less at risk of harm as a result of the policy.

But Stride claims his plans are “radically expanding the support available to help people progress in work”, adding: “With the next generation of welfare reforms, I want to help thousands of people on their journey off benefits and towards financial independence.”

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