Research published by the Chartered Institute of Personnel and Development (CIPD) on the Government’s new benefits payment system suggests employees receiving the funds will react positively to the change.
The monthly payment is designed to encourage claimants to increase the number of hours they work as the amount workers receive reduces in line with the amount they earn. It will replace six benefits that are currently paid separately.
CIPD conducted focus groups with low-paid workers and discovered claimants recognised advantages to the scheme once it was explained to them.
However, surveys conducted with more than 1,000 employers and 2,000 employees revealed concerns about the Claimant Commitment element of the programme – a record of the responsibilities a claimant must accept in return for receiving universal credit, and the consequences of not meeting them.
CIPD head of public policy Ben Willmott described the unemployed people consulted for the report as “almost without exception motivated to find work and likely to be comfortable with the new Claimant Commitment”.
“However, our research does pose some questions for how the concept of ‘in-work conditionality’ should be introduced,” he continued.
“According to our survey of employers and employees the opportunities for low-paid universal credit claimants to increase their earnings is likely to be limited, certainly until there is significant further improvement in the labour market.”
He cited figures that suggest only 22% of employers reported a high level of opportunity for low-paid employees to work additional hours. Fewer, 17%, suggested options existed for staff to boost their pay through improving their skills.
A Department for Work and Pensions spokeswoman said results in areas of the country where universal credit has already been introduced had been positive.
"We are pleased that jobseekers welcome universal credit because it will help them by making work pay,” she said in response to the report.
“Early claimants say there are better financial incentives to work and they are spending longer looking for jobs.
“We are continuing our work to tell people about our reforms and provide extra support for those who need it. However, we need to do more to help low-income workers earn more and eventually move to independence.”
The scheme is already live in seven areas across England, and will expand to 10 by spring 2014. The Government plans for the majority of people currently receiving income-based jobseeker’s allowance, income-related employment and support allowance, income support, working tax credit, child tax credit and housing benefit to have moved onto universal credit by 2017.
