Opposition Day — Universal Credit Work Allowance — Decision to Cut — 6 Jan 2016 at 15:53
Oliver Letwin MP, West Dorset voted in favour of cutting universal credit benefits for many people in paid work
The majority of MPs voted to cut universal credit benefits for people in paid work, excepting those with a limited capability for work whose universal credit does not contain a housing element.
The motion rejected by the majority of MPs in this vote was:
- That this House calls on the Government to reverse its decision to cut the universal credit work allowance, which is due to come into effect in April 2016.
Changes to the universal credit work allowance were announced in the summer budget 2015 and implemented via the The Universal Credit (Work Allowance) Amendment Regulations 2015 with a "coming into force" date of the 11th of April 2016.
Paragraph 1.144 of the 2015 Summer Budget document stated:
"From April 2016, the government will reduce the level of earnings at which a household’s tax credits and Universal Credit award starts to be withdrawn for every extra pound earned. In tax credits, this point (known as the income threshold) will be reduced from £6,420 to £3,850. The equivalents in Universal Credit (work allowances) will be reduced to £4,764 for those without housing costs, £2,304 for those with housing costs, and removed altogether for non-disabled claimants without children.
The government will also increase the rate at which a person’s or household’s tax credit award is reduced as they progress in work, by increasing the taper rate in tax credits from 41% to 48%."
The amounts paid in Universal Credit are determined by Section 8 of the Welfare Reform Act 2012, this states amounts are to be deducted in respect of earned and unearned income. The rates of those deductions are set via regulations.
Regulation 22 of the The Universal Credit Regulations 2013 set the rates in force at the time of the vote. The rate of deduction was 65% of the claimant’s earned income above the "work allowance" which varies depending on a claimant's circumstances and 100% of earned income.
The Universal Credit (Work Allowance) Amendment Regulations 2015 amended these work allowance rates. The changes involved removing the work allowance for those without responsibility for a child or qualifying young person or limited capability for work. The work allowance was replaced with two rates, a higher work allowance of £397 (which applies if the universal credit award contains a housing element) and a lower work allowance of £192 (which applies if there is no housing element).
The 2015 regulations reduced the work allowance, or kept the same. The rates for those with a limited capability for work not claiming a housing element were unchanged. For those without responsibility for one or more children or qualifying young persons the allowance was scrapped completely.
The biggest losers were single claimants responsible for one or more children or qualifying young persons whose universal credit has a housing element; these individuals' work allowance was reduced by £337.00 per month. Their payments will be reduced by 65% of that which is £219.05 per month or £2628.60 per year.
Votes by party, red entries are votes against the majority for that party.
What are Boths? An MP can vote both aye and no in the same division. The boths page explains this.
What is Turnout? This is measured against the total membership of the party at the time of the vote.
|Party||Majority (No)||Minority (Aye)||Both||Turnout|
|Con||308 (+2 tell)||0||0||93.9%|
|Lab||0||204 (+2 tell)||0||88.8%|