According to Resolution Foundation’s research, the package of reforms aimed at cutting the burgeoning Benefits Bill while getting people back to work will create lots of small winners – but also families who will lose out hugely.
The Government’s own assessment estimates that 3.8 million net cash winners will gain £420 per year on average, while the 3.2 million cash losers miss out on £1,720 on average. However, the reforms will push 250,000 people into poverty and 700,000 families deeper into poverty if the analysis is correct.
Greg Thwaites, research director at Resolution Foundation, said the reforms will lead to 60,000-105,000 extra people in work by 2029-30, but the gains will not be sufficient to avoid millions of losers and hundreds of thousands of additional people falling into poverty.
“While up to 105,000 people could find work as a result of these reforms, these gains are dwarfed by the income losses that millions of families will face,” he added.
More could be done to avoid consequences
The think tank said ministers could implement three changes to mitigate any negative impact from the changes. By bringing forward a plan to ramp up employment support at the end of the Parliament, putting transitional protection in place for those who fail tougher tests of their disabilities, and ensuring that moving into work does not trigger a reassessment of health-related benefits, fewer people would suffer, Thwaites said.
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“Sensible tweaks can do more to support families through the changes. The Government should front-load employment support to give people more help finding work and offer transitional protections to prevent disabled people from suffering sharp immediate income shocks if they lose eligibility for PIP,” Thwaites said.
