Single parents ‘biggest losers’ from IDS’ welfare reforms

Iain Duncan Smith's flagship universal credit reforms will make life for working single parents harder rather than easier, according to a report out today.

The Gingerbread charity suggested there would be very little financial incentive for those in or out of work to take on anything more than 'mini-jobs'.

Its findings are a setback to the Department for Work and Pensions (DWP), which is aiming to simplify a raft of existing benefits and roll them into the single universal credit in a bid to make the shift to employment a financially attractive one.

The DWP insists lone parents will be £5 a week under its changes, but that claim is flatly disagreed with by Gingerbread's research out today.

"The simple fact is that universal credit won't deliver on its promise to make work pay," chief executive Fiona Weir said.

"Single parents on low wages will be under considerable pressure to extend their hours under universal credit, but our research shows that financially, extra hours often won't stack up."

Non-working single parents will also lose out under the reforms, which the DWP is struggling to put in place before the next general election.

Yesterday the scheme began another phase of its national launch with its adoption by Hammersmith and Fulham council – a significantly scaled-back step leading Labour to dismiss the reform as being in "total chaos". 

"Labour supports the principle of universal credit but not only is the delivery of this flagship policy in crisis, it's increasingly clear that the government has got elements of the design wrong too," shadow work and pensions secretary Rachel Reeves said, commenting on the Gingerbread report.

"This analysis shows that the way the government is implementing these changes means it will be single parents in work who are hardest hit.

"And under the new system single parents who want to work more hours will see more of their extra income clawed back by the Treasury."

The DWP insists it is making steady progress in rolling out universal credit, however.

"This is a massive cultural transformation that the government had to get right," welfare reform minister Lord Freud said.

"We introduced universal credit in a slow, safe and controlled way in Manchester and this careful approach is working. We will build on these successes."

Gingerbread has suggested increasing the amount claimants can earn before universal credit is withdrawn and reducing the steep rate at which benefits are taken from earnings as ways of making the changes fairer for single parents.

The charity also says other steps to help low-income families are not helping single parents either. They are losing out when compared with other households when it comes to increases in the income tax threshold.

"It's worrying to see that single parents will, on average, be worse off under universal credit than they are now," Weir added.

"In the current difficult economic climate any new reform to the system must make lives better for families, not worse."

The DWP said three million households would be better off as a result of universal credit – and that lone parents would gain an average of £5 a month.

?"Around 500,000 working lone parents will see a greater incentive to increase their working hours and for the first time they will be able to have help with childcare even when they are working for just a few hours," a spokesperson said.