Questions

Asked by Baroness Grey-Thompson

To ask Her Majesty’s Government what estimate they have made of the cost per year, once universal credit is fully rolled out, of awarding the second earner, in a household where a couple are both in work, a second earner’s work allowance of (1) £100 a month, and (2) £50 a month.[HL4831]

To ask Her Majesty’s Government what estimate they have made of the cost per year, once universal credit is fully rolled out, of increasing, for households with responsibility for a child or young person, by (1) £100 a month, and (2) £50 a month, (a) the lower work allowance of a single claimant with limited capability for work, (b) the higher work allowance of a single claimant with limited capability for work, and (c) the lower work allowance of a couple where one has limited capability for work; and what estimate they have made of the cost of increasing by (1) £150 a month, and (2) £100 a month, the lower work allowance of a couple where both have limited capability for work.[HL4833]

To ask Her Majesty’s Government what estimate they have made of the cost per year, once universal credit is fully rolled out, of increasing, for households without responsibility for a child or young person, (1) the lower work allowance of a single claimant with limited capability for work by £50 a month, (2) the lower work allowance of a couple where one has limited capability for work by £50 a month, and (3) the lower work allowance of a couple where both have limited capability for work by (a) £150 a month, and (b) £100 a month.[HL4834]

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con): Entitlement to Universal Credit is based on an assessment of household rather than individual circumstances. We believe that investing in higher work allowances that benefit all households, rather than adding complexity by creating another work allowance for second earners, is the right way to ensure that as many households as possible have someone in work, so that work is paying for that household.

Costs shown do not take account of any impact on work incentives, they are rounded to nearest £50 million and are in 2014/15 prices.

The cost per year impact of increasing Universal Credit work allowances for second earners where both members of the couple are in work by a)£100 b) £50 would increase Universal Credit expenditure once fully rolled out by around a) £400 million a year b) £200 million a year.

Universal Credit is calculated at a benefit unit level so any increase to the work allowance would impact the couple as a whole.

For households with responsibility for a child or a young person. The steady state annual cost of increasing the lower and higher work allowances by a) £100 b) £50 for a single claimant with limited capability for work; increasing the lower allowance for a couple by a) £100 b) £50 where only one has a limited capability for work and by a) £150 b) £100 for a couple where both have a limited capability for work would increase Universal Credit expenditure, once fully rolled out is a) around £50 million per year, b) less than £10 million per year.

The costs are relatively low because few people would gain from this change. The claimants concerned will be claiming the higher allowance for a person responsible for one or more children or qualifying young persons prior to the increase to the limited capability work allowance.

For households without responsibility for a child or a young person. The steady state annual cost of increasing the work allowance by £50 for a single person with limited capability for work or a couple were one has a limited capability for work and by a) £150 b) £100 for a couple where both have a limited capability for work would increase Universal Credit expenditure, once fully rolled out, by a) around £50 million a year b) around £50 million a year.