Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, whether his Department has made an assessment of the potential effect of increasing benefits in line with inflation on incentives for people in low-paid employment to remain in employment.

The Secretary of State is currently conducting his statutory annual review of State Pensions and benefit rates. The outcome of that review will be announced in due course.

Universal Credit is designed to make work pay, so not all of a person's net earnings are deducted from their Universal Credit. Claimants with children and/or limited capability for work will also benefit from a work allowance.

A work allowance is an amount of earnings a Universal Credit household can earn (including employed and self-employed earnings) before the single taper rate of 55 per cent is applied to their earnings and their Universal Credit begins to be reduced. In simple terms, this means that 45 pence in every pound earned would be kept: claimants are £45 better off for every extra £100 of net earnings.

If a single claimant (or either claimant in a couple) have responsibility for a child or qualifying young person, and/or have limited capability for work, they will be eligible for a work allowance.