Millions will be worse off with below-inflation universal credit rise, say experts

theguardian.com:

Nine million low income families will be £500 a year worse off on average after the planned below-inflation increase in universal credit and other means-tested benefits are introduced in April, experts say.

The Joseph Rowntree Foundation (JRF) said setting benefit rises at last September’s 3.1% level, when inflation is forecast to hit 7% by April, would result in widespread hardship, push 400,000 people into poverty, and ratchet up pressure on households hit by the cost of living crisis.

Couple families with children who are on low incomes, both in work and out of work, would experience a real terms cut of £500 a year, while pensioner couples would lose £540 a year, according to the JRF analysis.

It comes four months after a £1,000 cut to the incomes of households on universal credit when the £20 a week top-up to help claimants deal with the extra costs of Covid was withdrawn, and will hit families just as soaring energy bills start to bite.

JRF estimates that the net cost of uprating benefits by 7% would be £7.5bn.

“At a time when the case for support could not be clearer, the government is choosing to further erode the value of benefits that are already wholly inadequate,” said Peter Matejic, deputy director of evidence and impact at JRF.

He added that this was another cut for millions of people when the value of out-of-work benefits was at an all time low. “There can be no justification for this. Our social security system should protect people from harm, not put them in danger,” he said.

Meanwhile, a Tory peer and former minister has urged the government to support struggling families in the form of cash top-ups paid via universal credit,which he called a “really efficient way of directing funds to the poorest”. Lord Freud