Andrew Smith MP

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Andrew backs Usdaw’s campaign to stop the Universal Credit disincentive to work

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Andrew Smith MP joined Usdaw members in the House of Commons on their campaign to persuade the Lib Dem / Tory Coalition Government to change Universal Credit rules that mean working people will only be allowed to keep 24p in every extra pound they earn.

Shopworkers trade union leader John Hannett believes that the huge 76% claw-back of additional earnings from workers on Universal Credit is unfair and a massive disincentive for people to look for ways to increase their income and work their way off benefits altogether.

Andrew said: "Usdaw are right to highlight this problem with the Coalition Government's Universal Credit and I hope Ministers will listen and act before the scheme is fully rolled out. Many working people will be clobbered by this 76% marginal deduction rate for taxpayers on Universal Credit. That will put off claimants from working longer hours and potential second earners from working at all, perpetuating the poverty trap for families on low pay."

Andrew raised the question of the 76% clawback in a Westminster debate on taxation priorities, saying: "There is a real risk that this encourages people to work less hours, or to do undeclared work on the side".

Andrew added: "I was shocked to meet Usdaw members who will be thousands of pounds worse off under Universal Credit, and concerned that thousands of my hard-working constituents would also lose out under the Coalition Government's current plans. I want to hear from people in Oxford East about how they will be affected. You can check out your Universal Credit entitlement by visiting www.entitledto.com

"Whilst I support the principle of Universal Credit which should make it easier for people who are unemployed to move into some work, I am calling on the Coalition to reduce the net earnings claw-back to 55%, as originally proposed by the Centre for Social Justice, to ensure that the aims of Universal Credit are fulfilled so that extra work will always pay and to support hard working families."

Andrew raised the question of the 76% clawback in a Westminster debate on taxation priorities. "There is a real risk that this encourages people to work less hours, or to do undeclared work on the side" he said.

John Hannett -- Usdaw General Secretary said: "We are grateful for the support of Andrew Smith MP. Whilst Universal Credit affects households differently, many of our members working long hours are going to be worse off when they are transferred onto Universal Credit. That loss of income is compounded because they will find it incredibly difficult to make up the shortfall by working longer hours. That is why the claw-back from additional earnings is incredibly unfair, trapping households in poverty and creating a disincentive to work. So we want the Coalition Government to ensure that work does pay by lowering the claw-back to 55p in the pound."

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