Press release

Government to help workers boost their earnings

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Part-time workers could receive monthly statements telling them how much better off they would be if they increased their hours.

Part-time workers could receive monthly statements telling them how much better off they would be if they increased their hours when the Government simplifies the benefits system.

They could also be sent texts telling them how working more hours or getting better paid work would leave them quids in when Universal Credit begins to be rolled out later this year.

And an online calculator could allow claimants to find out within seconds how much better off they would be from boosting their hours.

These are some of the ideas being considered as to how the Government can help low paid workers to increase their hours or move into better paid jobs under Universal Credit, Ministers said today, as they called for people to contribute other initiatives which can then be piloted.

Universal Credit will replace six different benefits and make sure work always pays by ending the current system which leaves some low paid workers worse off if they extend their hours.

For the first time Jobcentre Plus will be working with people already in work, and those part-time workers who are able to increase their earnings will be expected to take action to do so to make them less reliant on benefits - for example by looking for more hours or better paid work with their current employer, taking an extra job or finding a new job with longer hours or higher pay.

Minister for Employment, Mark Hoban, said:

At the moment too many people are trapped working 16 hours a week by a system which means there’s no point extending their hours because they’d be worse off.

Universal Credit will mean you’re always better off in work, so we want to find the best ways to help people increase their hours and boost their earnings so they no longer need to rely on benefits.

Currently workers who claim tax credits or housing benefit have no expectations placed upon them to help them reduce their reliance on welfare. Under Universal Credit, working claimants who could reasonably be expected to increase their earnings will be expected to take action to do so.

There will be around 1m people who could reasonably be expected to earn more but choose not to when Universal Credit is implemented fully in 2017. People who cannot work full time - whether for caring responsibilities, illness or because they cannot find a full-time job, will continue to receive support.

Lord Freud, Minister for Welfare Reform, said:

Under Universal Credit we will expect claimants to do all they can to improve their life prospects and reduce benefit dependency, such as carrying out job searches to find better paid work or increasing the hours they work.

Today we are calling on employment experts to work with us to develop and pilot innovative ways for claimants to meet their commitments in return for their benefit. Text messaging and access to an online ‘better off’ calculator are just some of the ideas so far.

Notes to Editors:

  1. Minister for Employment Mark Hoban and Minister for Welfare Reform Lord Freud made the call for new ideas today at an event in London hosted by Policy Exchange.
  2. Universal Credit will transform the way in which the Department for Work and Pensions employment services operates - ensuring work pays and making it easier for claimants to take up and progress into work.
  3. Universal Credit will be implemented nationally from October 2013.
  4. A Pathfinder will begin six months earlier in April 2013 in Greater Manchester and Cheshire regions to test the systems with claimants, local organisations and employers ahead of national implementation in October.
  5. Approaches which could be tested include:

Messages on Universal Credit statements

The Government will look at including a message on the monthly Universal Credit statement that spells out how much extra claimants would have by boosting their hours. It is hoped the idea would encourage individuals to look for more work or a better paid job so they reduce their reliance on benefits.

Targeted texting

DWP will look at how best to use technology to help claimants boost their income. For example claimants could be sent texts informing them how much extra they would take home if they worked an extra two or three hours per week.

Under Universal Jobmatch we will also investigate the best use of texting to alert claimants when jobs are posted matching their requirements. Jobcentre Plus advisers would also be able to text them to see if they have applied and investigate why not.

‘Better off’ calculator

A calculator could be set up online allowing claimants to find out quickly how much extra they could earn by increasing their hours by one, two, three etc.

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