The UK benefit system has been transformed over the years as unemployment rose to high levels in the 1970s and 1980s, then the caseloads of incapacity and lone parent benefits rose to high levels, and more recently working-age expenditure on tax credits, and child, secondary disability and housing benefits has increased sharply. Much of the current benefit expenditure comes with no or limited labour market conditions, and applies high marginal effective tax rates to workers in low-paid jobs. Since the recession, restrictive measures have been introduced across the range of benefits. The Universal Credit, which is in the early stages of national roll-out, greatly reduces complexity in the structure of the benefit system and ensures that work always pays, but it is not expected to reduce marginal effective tax rates on low-paid workers and may encourage part-time and intermittent work. The traditional procedures for identifying unemployment situations will not be applicable and further development of the new procedures for out-of-work and in-work conditionality is needed.