A recent study reveals that Department for Work and Pensions (DWP) Universal Credit claimants receive an estimated £10 billion annually in “hidden” benefits atop their £100 billion in Universal Credit payments. This additional support includes free prescriptions, discounted travel, free school meals, and help with energy bills, water charges, broadband costs, and even holiday expenses.
The think tank Onward highlighted that these supplementary “passported” benefits are distributed in inconsistent and opaque ways, creating what it terms a “vast shadow welfare system.” This marks the first comprehensive research uncovering the scope of these extra benefits linked to Universal Credit eligibility.
Helen Whately, Shadow Welfare and Pensions Secretary, criticized the current welfare framework, stating, “Our welfare system isn’t working. This patchwork of benefits outside Universal Credit undermines its core aim of ensuring work always pays.” She emphasized the need for urgent welfare reform, warning that the government’s ongoing addition of extra handouts only worsens the problem. In her view, a fairer system should support those striving to work and function as a genuine safety net, rather than trapping claimants in a cycle of benefits.
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Onward’s report points out that these additional payments are often overlooked in analyses of working-age welfare spending, helping to explain why costs have spiraled out of control. Sir Simon Clarke, Onward’s director, stressed the financial and social implications: “£10 billion represents a significant taxpayer burden and directly undermines incentives for people to transition from welfare into employment. Serious root-and-branch reform is urgently needed to ensure fairness and sustainability.”
A Government spokesperson responded that passported benefits, such as free school meals, are supplemental supports tied to Universal Credit eligibility. They noted ongoing efforts to review the Universal Credit system comprehensively to ensure work always pays and to address poverty effectively. Highlighting commitment to reform, the Government stated it is taking significant steps to fix inherited welfare system issues by rebalancing Universal Credit’s sickness and unemployment components.