The Government’s flagship welfare system will make work pay while reducing benefit payments to more than 2million households, the Institute for Fiscal Studies has said.
The think tank said that Universal Credit will “strengthen incentives” for people who go into work by ensuring that they keep more of the money they earn.
The scheme is being introduced to help ensure people are not deterred from going into work because they lose extra money they earn from the withdrawal of benefits and additional taxes.
The IFS said that 600,000 people who currently keep just 10p of every extra pound they earn will keep 23p under the scheme.
Yes, that’s better but really, not good enough. How in buggery did we end up with a system where marginal tax rates of “only” 77 % on the poor was regarded as a victory?
The actual answer, of course, is to raise the personal allowance for both tax and both types of NI to the minimum wage.
And would someone shoot the Telegraph subs please?
It also said that the number of people losing two thirds of their income if they go into work will fall from 2.1million to 700,000 under the system.
It’s two thirds of the “extra” income.