The benefit system is ill-equipped to deal with rising levels of long-term morbidity as many people have given it up The need to find work has reached 2.3 million people.
The Resolution Foundation's warning highlights the challenges the next government will face as Universal Credit begins a full rollout of credit to seven million households.
The number of people claiming the benefit, according to a think tank people out of work due to ill health has almost doubled since the introduction of Universal Credit in 2013 to 2.3 million.
Although health-related inactivity is near a record high, the unemployment rate has fallen from 8.5% in 2011 to just 3.8% last year.
Meanwhile, there are 35,000 couples with children. in the UK where one or both parents are unemployed.
The think tank said the benefit system would need to change to reflect this.
“Whoever wins the election will control Universal Credit Britain as the final stage of the biggest benefit reform in a generation is set to see the system covering seven million families by 2029.” “, the report says.
The Government recently announced changes to Universal Credit to encourage people with poor health to look for work. This includes assessing whether someone can do work from home before writing them off as sick.
The Resolution Trust said the next government would need to build on these reforms, while recognizing that it was itself tackling growing disease problems.
The trust's Alex Clegg said: “Universal Credit was designed to tackle unemployment – for rewarding people who can work through incentives and increased conditions, such as stricter rules and sanctions.
“None of this applies if the system believes you are unable to work or have limited ability to work. “You don’t have those conditions, so you go beyond what Universal Credit was designed for.”
More than a third of benefit claims come from people who are not expected to be able to work at all because they are considered too ill.
The warning comes as poor mental health and musculoskeletal problems rise, leading to an increase in the number of people too unwell to work in the wake of the pandemic.
The Office for National Statistics estimates that around 2.7 million people are not working or looking for work because of health problems. This is approximately 600 thousand more than before Covid.
The think tank said that while the government has announced some reforms to the system, the benefits system will struggle to cope with the rise in inactivity due to illness.
Mr Clegg said: “We cannot expect Universal Credit to solve these problems on its own.”
He added: “Compared with the old system, Universal Credit offers more support for renters and stronger incentives to get started. But its original design did not anticipate that there would be more than two million claimants with poor health or disability.
“Along with efforts by the NHS, education and labor market policies to tackle the causes of ill health, Universal Credit Change will need to be made to meet Britain's new challenge of chronic disease.”
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