EFFECT OF UNIVERSAL CREDIT ON FULL-TIME WORKERS

That this House believes that the clawback rate under universal credit of 65 per cent of net earnings, equal to a 76 per cent marginal deduction rate for taxpayers on universal credit will disincentivise claimants from working longer hours and potential second earners from working at all, perpetuating the poverty trap for families on low pay; and therefore, whilst supporting the principle of universal credit which will make it easier for people who are unemployed to move into some work, calls on the Government to reduce the net earnings clawback to 55 per cent, as originally proposed by the Centre for Social Justice, to ensure that the aims of universal credit are fulfilled so that extra work will always pay and to support hard working families.