This week, the unsuspecting, unemployed citizens of Hammersmith became the latest guinea-pigs to be enrolled in the Coalition's floundering Universal Credit experiment. We had been told that six new Jobcentre districts would be taking part, but when the paperwork was published it turned out to be only Hammersmith joining the few boroughs around Greater Manchester where IDS's Great Leap Forward is happening, while the people of Inverness, Rugby, Shotton and the other intended 'Pathfinders' heaved a collective sigh of relief.
It is true that some low-paid workers will be 'better off' under Universal Credit, but there are also bizarre 'cliff edges' built into the scheme which mean that earning a little more can leave you worse off than before and, with no help with mortgage costs for anyone doing any paid work, the wrong job could still make you homeless. Both issues have been well-researched and addressed in other articles: I recommend -
http://blog.cix.co.uk/gmorgan/2013/03/18/three-big-lies-of-welfare-reform/
http://www.theguardian.com/commentisfree/2013/jul/12/universal-credit-less-pay
Something I haven't noticed any comments about to date, however, is an insidious feature of Universal Credit which effectively says that people in low-paid work will have to work harder than those in better-paid employment to receive any help from the state with things like housing costs or raising their children.
Central to Universal Credit when it is finally unleashed in its full glory, is the concept of 'in-work conditionality'. At present, some means-tested benefits available for working people require a set number of hours to be worked in a week (16, 24 or 30 for Working Tax Credit, depending on household circumstances) while others do not (Housing Benefit and Council Tax Support consider only household circumstances and resources).
Universal Credit will expect anyone fit for work to have earned income equivalent to a set number of hours at the minimum wage, and where the level of earnings falls short of this, the worker/claimant will be required to demonstrate that they are actively seeking better-paid work or more hours, or risk forfeiting their benefit.
For a single person without caring responsibilities or health problems, this threshold is expected to be the equivalent of 35 hours at the minimum wage. For couples without caring responsibilities, both will be expected to be earning to this level, or actively seeking to do so. Even where there are caring responsibilities - for example, a child of school age - the 'responsible carer' will still be required to work, or seek to do so, for however many hours the decision maker assesses reasonable in the light of those commitments.
Now there may be an argument to be had about the extent to which people should or shouldn't be able to choose how many hours they work, and the extent to which the State/Taxpayer should subsidise those working fewer hours but, unlike the Tax Credit system, the key factor here isn't the number of hours, it's the level of income. And what that means is, the higher your hourly rate, the more 'choice' you have about your work-life balance.
A worker on the minimum wage will have to work the maximum number of hours to avoid falling foul of sanctions, while someone on twice their hourly rate will meet the required earnings threshold on a typical job-share. A highly-paid professional person could supplement a day per week's consultancy or less with an award of Universal Credit, so long as they met their earnings threshold. Arguably, this would still leave them on a low income in most cases and probably keen to find more hours, but with child maintenance disregarded as income, it does set up the notional scenario - especially in prosperous Hammersmith - where a highly-paid professional divorcee might work one day and spend the rest of her week as she pleased, eligible for as much Universal Credit as her cleaner, who's expected to work full-time!
I've long argued that with more people fit for work and of working age than jobs for us all to do, there is an inescapable logic in devising a tax and benefits system that encourages people onto a shorter working week in order to share the hours and wages available more fairly. But a system where the better-paid have that choice but the lowest paid, often in the most dull, physically demanding and unrewarding jobs, are required to work harder than at present, is no 'reform'.
