Tens of thousands of people in the West Midlands are to lose more than £1,000 following the introduction of Universal Credit.

Those most likely to be hit include people with disabilities and people in households where one adult is a pensioner.

It’s just the latest warning about the impact of the controversial new benefits system.

More than 54,000 people in the West Midlands region are set to lose more than £1,000 a year.

But at the same time, around 45,000 households could find they gain as much as £1,000 a year.

In particular, people who work and receive means-tested benefits, and who also live in rented properties, are most likely to gain large amounts.

The impact of Universal Credit is revealed in a new study by think tank the Institute for Fiscal Studies.

Latest figures show there are currently 63,907 households receiving Universal Credit in the West Midlands region. Another 250,090 households in the region are receiving the older benefits, but they will all eventually be moved on to the new system.

Universal Credit replaces a range of existing benefits including Jobseekers Allowance and Housing Benefit, and was designed to make the benefits system simpler while ensuring that people always benefit from finding work or increasing their hours.

But the research suggests that the new system could have unexpected consequences for many claimants.

 

Nationwide, 11 million adults will eventually be in households entitled to some Universal Credit. Large gains and losses are common, and 1.6 million adults will gain by more than £1,000 per year while 1.9 million will lose at least that much.

Many of those facing the biggest cuts will find their income rises over time, but the researchers warned: “Those who are disabled or live with a disabled person are especially likely to be persistently, rather than temporarily, poor.

“The effect of UC on those with disabilities is particularly significant and complex, with both large giveaways and takeaways depending on particular circumstances.”

Tom Waters, Research Economist at the IFS and an author of the briefing note, said: “Universal credit changes benefit entitlements for three-quarters of those entitled to means-tested benefits, and 30% see a change of at least £1,000 per year.

“The biggest losses experienced as a result of the switch are mostly down to a small number of specific choices the government has made about universal credit’s design, such as its treatment of the low-income self-employed and people with financial assets.

“Many of those very large losses do turn out to be temporary for those concerned. However, even when measuring people’s incomes over relatively long periods, universal credit still hits the persistently poor the hardest on average.”

A range of bodies have warned that Universal Credit is making life a misery for many claimants.

 

More than a quarter of Conservative council leaders believe that Universal Credit is contributing to homelessness, a survey by think tank the New Local Government Network found.

Charity Changing Lives warned Universal Credit is forcing women into prostitution

And NHS managers have warned said rising demand for healthcare is linked to a shortage of housing and employment - and the introduction of Universal Credit.

This was having an effect on mental health, they said. Their comments were published in a report by NHS Providers, which represents NHS trusts.