To ask Her Majesty’s Government what is the rationale for setting a single benefit cap earnings exception threshold in Universal Credit linked to the National Living Wage; and whether this will require under-25s receiving the lower National Minimum Wage, including young lone parents, to work a longer number of hours before qualifying for the exception.
A threshold linked to the national living wage ensures the work incentive provided by the benefit cap is maintained. The new threshold is consistent with the original intention of the earnings exception threshold by excepting from the cap any household that earns the monthly equivalent of working 16 hours per week at the highest minimum wage rate in force.
The Government has fully considered the position of people who may have to work more than 16 hours to qualify for the exception. More information is in the impact assessment and equality analysis published with the Universal Credit (Benefit Cap Earnings Exception) Amendment Regulations 2017 (SI No: 2017/138). The Government also published a statement in response to comments made by the Social Security Advisory Committee on the amendments.
These documents can be found on: the ‘legislation.gov.uk’ website by searching for year 2017 number 138
And on the ‘gov.uk’ website by searching ‘universal credit benefit cap earnings exception amendment regulations 2017 ssac report’