Working families would need to earn £71,000 annually before tax to receive the same income as jobless households with three children, according to new research from the Centre for Social Justice.
The think tank's analysis reveals that families claiming full benefits will receive £18,000 more per year than those earning the national living wage after tax.
The findings, published in a report titled "The Benefits Budget", expose what the organisation describes as a "welfare crisis" affecting Britain in the wake of the autumn Budget's £26billion tax increase.
The research indicates that five million people are now receiving out-of-work benefits, nearly twice the pre-pandemic figure when including those on legacy benefits.
By 2026/27, households with three children where at least one parent claims standard Universal Credit, housing support and health benefits such as Personal Independence Payment will receive £46,000 annually. This figure increases to £55,000 for households with five children.
In contrast, families where one person works full-time and another part-time on minimum wage will take home £28,000 after tax.
The research shows that matching the income of a three-child household on benefits would require pre-tax earnings of approximately £71,000, whilst families would need to earn £90,000 before tax to equal the benefits received by jobless households with five children.
The disparity is even more pronounced for single parents, with those out of work and claiming combined benefits for three children receiving £43,000 annually.
This amounts to £22,000 more than the after-tax earnings of someone working full-time on £20,600. Single parents with three children, where one child receives disability allowance for conditions like ADHD or autism, will receive £38,000 - exceeding a living wage worker's take-home pay by £17,000.
Working families must earn £71,000 a year to match income of jobless
|GETTY
The Centre for Social Justice characterises these disparities as "worsening of deeply perverse incentives" within the benefits system.
The organisation attributes this situation to the Government's abandonment of welfare reform and its expansion of benefit expenditure through the autumn Budget's tax rises.
Department for Work and Pensions data shows that 40 per cent of households impacted by the two-child limit also claim health benefits, exempting them from the benefit cap established in 2017.
This exemption affects approximately 244,000 households who now receive significantly increased benefit payments.
. Approximately 5,000 individuals are being signed off work and placed on long-term sickness benefits daily
| GETTYThe Office for Budget Responsibility projects that child disability benefit expenditure will surge by 76 per cent, reaching an additional £3.4billion by 2030. This follows increased claims for conditions including autism and ADHD.
Since the pandemic, the disability benefit caseload for working-age people has grown by 1.3 million, with claims for anxiety and depression increasing more than threefold since 2019. Approximately 5,000 individuals are being signed off work and placed on long-term sickness benefits daily.
The Centre for Social Justice notes that whilst Personal Independence Payment can be claimed by those in employment, fewer than one in six recipients are working.
Health benefit expenditure for working-age people is projected to reach 1.9 per cent of GDP by 2030, representing the highest level in two decades and nearly double the figure from ten years ago.
The British job market grows harder to navigate | GETTYThe research reveals that 1.5 million children are now living in workless households, representing the most rapid increase ever recorded. The out-of-work benefit population with no work requirements has surpassed five million, nearly doubling since before the pandemic when accounting for legacy benefit recipients.
The Centre for Social Justice has urged the Government to implement urgent welfare reforms as part of what it calls a new "mission to repair broken Britain".
The organisation has presented fully-costed proposals to overhaul mental health benefits, which could generate £7billion in savings whilst allocating over £1 billion to significantly expand NHS therapeutic services and employment support programmes.
Additional recommendations include tax relief measures to encourage employers to recruit young people not in education, employment or training, and restructuring child benefit payments to provide increased financial assistance during children's early years.
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