Make Work Pay

The steep tapers for the withdrawal of benefits, especially for those who have no choice but to live in expensive rented accommodation, have created an unwelcome benefit trap for decades.

I have written to both Chancellor Rachel Reeves and the Secretary of State for Work and Pensions Liz Kendall to raise the concerns and to request a full briefing on what the government intends to do about it.  

Young people in supported accommodation are penalised if they make any attempt to improve their circumstances through employment.  

For decades, the government has struggled to create a benefit, housing benefit, and universal credit system, which is not confusing but also avoids financially disincentivising those who want to work more hours or progress their careers. 

Although the government engaged with organisations such as Centrepoint, St Mungo’s, and Homeless Link, to consider improvements to the benefit system in October 2024, there does not appear to have yet been a significant positive change. 

However, the Budget did include some measures, such as a 1.7% increase in working-age benefits and the introduction of a Fair Repayment Rate to cap debt repayments through Universal Credit at 15% of the standard allowance.