Universal Credit creates “a complex mix of winners and losers” depending on where claimants live, a study has revealed.
The research by the Resolution Foundation found some regions fare much worse than others.
Laura Gardiner, research director, said: “ Universal Credit is now set to be marginally more generous than the benefits it is replacing.
“But this average hides a complex mix of winners and losers, with families in some areas of the UK faring particularly badly.”
In Liverpool, just 32% of families will be better off under Universal Credit, and 52% will be worse off, compared to a national average of 46% losing out, and 39% gaining.
Liverpool has a relatively high proportion of single parents, out-of-work single people and disabled people – all of whom fare badly under the new system.
Universal Credit’s greater generosity towards working families with high rents has less impact in the Liverpool region, which has below-average rent levels.
Ms Gardiner said: “Policy makers need to better understand the effect Universal Credit will have in different places.”
Metro Mayor of the Liverpool City Region Steve Rotheram said: “Universal Credit has made life miserable for some of the most vulnerable members of our society.”
He called on the Government to listen to the warnings and “implement reforms to make our welfare system more humane”.
He said: “Rather than penalising people for finding work and forcing them into crisis with the five-week wait for a first payment, it should be reformed to offer a genuine safety net to struggling people.”
A DWP spokesman said: “Universal Credit supports more than 2.7 million people. This report rightly recognises improvements we’ve made, like boosting work allowances for some families to £1,000.”
What is Universal Credit?
Six-in-one benefit that encompasses Child Tax Credit, Housing Benefit, Income Support, Jobseeker’s Allowance, Employment and Support Allowance and Working Tax Credit.
Why was it introduced?
Under the old system, benefits stopped as soon as someone found a job, leaving some better off on benefits. Universal Credit is one payment, which “tapers” away by 63p for every £1 earned above £198 a month.
What are the problems?
The five-week wait for the first payment leaves families struggling.
Childcare costs must be paid up front and repayment can be withheld if people fail to obtain receipts on time.
Why are there regional differences?
Areas with a higher proportion of single parents, out-of-work single people and disabled people will be hit harder than areas with more working families and higher rents.