Nursery World - Universal Credit, part 5: Working Parents

David Finch continues his series on Universal Credit by asking if the reform incentivises those on low earnings to work more hours in order to increase their income

Akey aim of Universal Credit (UC) is to provide a better system for working families. One way it is expected to achieve this is by creating a single system in which people do not have to make a new claim for their entitlements when they move into work. Once in work, the system is meant to be responsive to monthly fluctuations in earnings, removing the under- and over-payments that affect the current tax credits regime.

Importantly, UC was also designed to improve financial incentives to enter work and then progress, or ‘to make work pay’. The return to work is determined through two main components, the ‘work allowance’ and ‘taper’.

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