The introduction of universal credit could leave many single-parent families facing a life in poverty because of rising private sector housing costs.
A study from the Centre for Research in Social Policy at Loughborough University found that the caps on how much benefit can be claimed under the new system will leave many worse off even if they take part-time work.
According to the research - published today by the charity for single people Gingerbread - a single parent with an average private rent earning the minimum wage would stay below the poverty line even if they work up to 16 hours a week.
In contrast, someone paying a social rent, covered fully by universal credit, would be able to escape poverty by working only a few hours a week.
The wide-ranging report, to be launched at Westminster today by Labour MP Dame Anne Begg, further found that the universal credit will provide a disincentive to work longer hours for many people.
Due to be introduced next year, the universal credit will replace a range of current benefits, including housing benefit.
It has been designed to encourage people into work. However, the research showed that the implementation of the new system will mean that many families will be ‘stuck on a financial plateau’ whereby it will not improve their situation to work more.
‘Through universal credit the government has the opportunity to make work pay and offer real financial incentives for families on low wages to work more hours – which many want to do,’said Fiona Weir, chief executive of Gingerbread. ‘However, we have discovered that for many single parents, working longer hours won’t necessarily pay.’
Gingerbread has called on the government to consider giving more substantial support for childcare costs, inrease the amount that single parents can earn before universal credit is withdrawn, and reduce the rate at which it is tapered away once earnings pass that threshold.
Ms Weir added: ‘This is about supporting single parents into work, into more hours and to lift their families out of poverty – which is exactly what the government claims it wants to do. But unless the government gets it right now, the sums just won’t add up for too many single parents.’