A WORKING single mum has demanded a shake-up in Universal Credit in a bid to escape becoming one of the millions caught in the benefits trap.
Bernadette Humphries wants Chancellor Rishi Sunak to use Wednesday’s Budget to rip up the rules preventing workers who receive state help from taking higher-paid jobs.
She said: “Those who want to work should be rewarded this week and offered more of an incentive to get stuck in. The Chancellor should do this to give millions like me a welcome boost.”
Under the current rules, Bernadette, 36, receives around £1,200 a month in Universal Credit.
But the Government grabs 63p of every £1 of income if she earns more than £293 a month from work.
This has led to her turning down a £24,000 job in favour of one paying £19,000.
She says: “I am going for two jobs at the moment, one is on £19,000 and the other has a salary of £24,000, but it has a lot more responsibility and stress.
“And for every bit I earn over the allowance, a large chunk is just taken away from my benefits — so what’s the point? I am taxed more severely than multi-millionaires.
“I worked out I’m only going to get an extra £80 a month for a lot more stress — that’s not worth it. I understand that I get financial help from the Government, but it sends out the right message to people if they can hold on to more of it.
‘Benefits deter me’
“By telling the country they can keep hold of more of their money, it may even convince a few more to do some extra hours.
“And it could be the incentive needed for some who are claiming benefits to start looking for a job.”
Graduate Bernadette’s benefits record shows she receives £411.51 a month in standard allowance as a single mother.
Her other entitlements include £434 in housing costs for her terraced three-bed home and £519 for her kids Mercy, six, and three-year-old Dayna.
And when she is at work the Government pays 85 per cent of her childcare costs — though she has to find the money upfront first.
These figures include the £20 a week temporary uplift handed out by the Government during the pandemic. This is now being removed.
Baroness Stroud has tabled an amendment in the House of Lords to reinstate the uplift.
It is a last-ditch attempt to keep the cash, in place since the start of the pandemic for five million claimants.
The baroness is chief executive of the Legatum Institute, which says 800,000 people would be pushed into poverty by removing the money.
Meanwhile, discussions in Whitehall have centred on reducing the “taper rate” at which benefits begin to be deducted from 63p to 60p.
More than two million adults on Universal Credit are in working families that would potentially benefit from reducing the taper rate.
If it went down to 60 per cent it would cost the Treasury around £1billion a year.
Bernadette is calling on Mr Sunak to give her and families up and down the country a helping hand as part of the post-pandemic recovery.
She said: “It would be a real signal of intent to let people keep more of their money they have worked hard for. Holding a family together can be a struggle, as we are going through a cost of living crisis.”
She added: “I spent three years at Sunderland University getting my degree in health and social care, so I’m not afraid of hard work.
“I aspire to reach as high as possible. But until my kids are 16 I feel that it may be difficult for me to reach my potential.”
Karl Handscomb, senior economist at the Resolution Foundation, a think tank focused on improving living standards for those on low to middle incomes, said: “The rich wouldn’t stand for these kinds of work incentives so why should low-income families?
“Reducing the taper rate will help more than two million families on Universal Credit.”
A report last month by the Centre for Policy Studies argued for the taper rate to reduce to 55p.
James Heywood, head of welfare and opportunity at the think tank, said: “Universal Credit was created to try to make sure it always pays to work. But at the moment, claimants can lose 63p of every extra pound they earn, and even more if they are paying tax.
“Some may find there is little point in them taking a job, or taking on more hours, which is absurd.
“Cutting the taper rate would mean claimants could keep more of their earnings and put more money in the pockets of families on low incomes.
“With the cost of living pressures increasing, many low-income families may also face a tough winter.
“A reduction in the Universal Credit taper rate would give a boost to the finances of millions of low-paid people.”
Shadow Welfare Secretary Jonathan Reynolds last night said: “It is simply not right that someone on Universal Credit is losing 63p in every extra £1 they earn. Cuts to Universal Credit, tax hikes on working people and a cost of living crisis show how out of touch this Government is.
“Labour is on the side of working people. We will replace Universal Credit with a system that values work and reduce the taper rate so people keep more of the money they earn.”
A Department for Work and Pensions spokesperson said: “Universal Credit’s taper rate incentivises finding employment and makes work pay.
“Our multi-billion pound Plan for Jobs is helping people find work, while Universal Credit continues to provide a vital safety net for millions and the £500million Household Support Fund is helping the most vulnerable with essential costs through this winter.”
