People with disabilities are more likely to be affected by losses in benefits after moving to Universal Credit than those without, researchers have found.
Those with disabilities, or those living with someone who is disabled, are also more likely to be affected in the long term.
A new Institute for Fiscal Studies analysis has examined those households that will lose or gain the most under the new welfare system.
The analysis, funded by the Economic and Social Research Council and Understanding Society, also explored whether these effects are short-lived or persistent for those concerned. Researchers found many of those hit hardest in the short run are only temporarily poor.
Nearly two million people will be more than £1,000 worse off per year when moved to Universal Credit, the new research has found. However 1.6 million adults will gain by more than £1,000 per year.
Many people will only be temporarily affected, researchers found, but those who are impacted in the long term are most likely to be among the poorest.
The study found that 11 million adults will be in households entitled to some of the controversial new benefit, which combines six payments into one.
Around 4.2 million of these will be at least £100 per year better off than under the current system and 4.6 million will – after transitional protection expires – be at least £100 per year worse off.
Large gains and losses from the benefit are common: 1.6 million adults will gain by more than £1,000 per year, and 1.9 million will lose at least that much.
The effect of Universal Credit on those with disabilities is particularly significant and complex, with both large giveaways and takeaways depending on particular circumstances.
After transitional protections have expired, those who would have been entitled to the ‘severe disability premium’ – paid to those who generally live alone and struggle with basic living activities such as preparing food – can receive as much as £2,230 per year less in Universal Credit than they would have under the previous system.
Others – those whose health is not deemed to affect their basic living activities but is deemed to substantially constrain their ability to do paid work – can receive £1,120 per year more under the benefit.
However, while many of the biggest losses are temporary, Universal Credit still hits the persistently poor more than those who are better off.
Those whose average incomes over eight years are in the lowest tenth of the population – the persistently poorest – lose on average 1.1% of their income over the eight years (equivalent to £100 per year) from the benefit. That’s more than any higher-income group.
Tom Waters, research economist at the IFS, said: “The biggest losses experienced as a result of the switch are mostly down to a small number of specific choices the government has made about universal credit’s design, such as its treatment of the low-income self-employed and people with financial assets.
“Many of those very large losses do turn out to be temporary for those concerned. However, even when measuring people’s incomes over relatively long periods, universal credit still hits the persistently poor the hardest on average.”