People on Universal Credit who have children could face a real-terms benefits cut of £1,000 a year if the government chooses to increase benefits in line with earnings instead of inflation, a think tank has warned. The Department of Work and Pensions (DWP) has been told that low-incomes families with children will be the worst off if the government moves forward with the proposals.
So far, the government has refused to rule out uprating benefits by earnings growth. But it will be up to new chancellor Jeremy Hunt to deliver the verdict during his fiscal statement on October 31.
The Resolution Foundation said uprating by earnings would amount to a real-terms cut, which would set the typical incomes of the poorest fifth of UK households back to levels not seen since 2001.
