The Department for Work and Pensions (DWP) is facing severe criticism over what has been branded an "unfair" benefits shake-up that critics warn could "tear the country apart". The Labour government's Autumn Budget has been slammed for a perceived splurge on welfare, creating what analysts describe as perverse incentives that penalise working families.
The Staggering Disparity in Income
Analysis from the Centre for Social Justice (CSJ) think tank, highlighted by Telegraph columnist Michael Deacon, reveals a stark and growing gap. The research indicates that by the 2026/27 financial year, a non-working family with three children claiming average rates of Universal Credit, housing support, health benefits, and Personal Independence Payment will receive around £46,000 in combined support.
For a larger family with five children, this figure rises to approximately £55,000. In sharp contrast, a working family where one adult is in full-time employment and another works part-time, both on the National Living Wage, would take home just £28,000 after tax.
What Working Families Must Earn to Keep Up
The implications of this disparity are profound. For a working family to take home the same amount as the three-child household on benefits, they would now need a pre-tax salary of roughly £71,000 a year. To match the support given to a family with five children, that required salary jumps to an eye-watering £90,000 before tax.
Michael Deacon branded this a "mind-boggling state of affairs", questioning how the Government could justify a system where working parents are effectively paying for non-working parents' children, while simultaneously finding themselves and their own children financially worse off.
Calls for Urgent Welfare Reform
Joe Shalam, Policy Director at the CSJ, emphasised that while work is the best route out of poverty, the current system is failing. "Our welfare system grows ever more riddled with perverse incentives that trap people on benefits and fail to help them towards financial independence," he stated.
Shalam warned that this failure has generational consequences, noting that children are twice as likely to be in absolute poverty if they grow up without seeing a parent go out to work. He expressed disappointment that the Budget merely expanded welfare spending funded by taxes on workers, instead of adopting the CSJ's own costed reform proposals.
Those proposed reforms claimed they could have saved £7 billion, invested an extra £1 billion into NHS therapies, and helped hundreds of thousands of young people into employment. The think tank has urged the government to return to substantive welfare reform "before we lose a generation for good".
