MPs have scrutinised the Universal Credit scheme stating that it opens itself up for people to exploit the system. The Work and Pensions Committee suggested that more people could be working for cash in hand in order to claim Universal Credit.
The new form of benefits is being rolled out and has already started. It amalgamates 6 Government benefits into one so that households can’t claim more than £2,167 monthly and this is to cover all forms of benefit. Most people will receive a fraction of this money each month.
Universal Credit should be concluded and finally rolled out by 2017.
Problems with Universal Credit
The Work and Pensions committee of MPs responsible for implementing and monitoring the Universal Credit benefit system has said that £24 billion is being spent on housing benefit alone, £1.2 billion of which is being claimed fraudulently.
The new system for paying tax by companies is real time information (RTI) so people will pay their tax under the PAYE system each month as opposed to quarterly. This provides instant information to the Government to check who is receiving benefits while working. Yet, if people are receiving cash in hand then it’s difficult to trace if they are fraudulently claiming benefits.
Universal credit plans to reduce fraud by around £1 billion by 2020 but it’ll rely on a multi-action approach to combat people working for cash in hand, which the Government is prepared for.