St Helens South and Whiston MP, Marie Rimmer, today led a Westminster Hall debate to discuss the impact of the rollout of Universal Credit in the North West and the financial hardship the upcoming changes to work allowances will cause.
During the debate, Marie called for the Government to address the issue of transitional protections for those transferring from the current tax credit system. At present no protection is in place for lone parents, over the age of 25 with two children, working full time on the new National Living Wage. These families would be £2,384 per year worse off if these changes go ahead in April.
Under Universal Credit, families and individuals are allowed to earn a certain amount each month before their maximum award begins to be reduced. The changes planned for April 2016 reduce this work allowance for a lone parent, without housing costs, by over £4,000, down from £8,808 to just £4,764. These changes will mean that working households with children will lose on average £1,300 a year by 2020.
Marie also used the debate to demonstrate the chaos in the current rollout. She spoke of how some local residents had been fined for making false declarations when filling out dental charge exemption forms. This is despite having been advised by staff to state they received Jobseekers Allowance because Universal Credit did not exist on their systems.
In St Helens South and Whiston, 1,586 residents were in receipt of Universal Credit in November 2015, with this number set to rise to 12,000 by 2020 as the transition continues.
Speaking after the debate, Marie Rimmer MP, said: “In response to the campaign against tax credits cuts, the Chancellor said he had listened and reversed his decision to ensure people were not financially punished.
“However, the words of the Chancellor are at odds with the experiences of local residents. These cuts to the work allowance will actually create a disincentive to work as many working families would find themselves worse off under the new system.
“That is why I have urged the Minister to stop and think again. To look at the real, genuine problems experienced by people in the North West and to address and resolve them before the national roll out. I have also asked that the transitional protections be put on a legal basis until work payment catches up so they are not a penny worse off.”