Work and Pensions Secretary Iain Duncan Smith's welfare reforms intended to encourage claimants to find work could in fact leave many households worse off, a think-tank has warned.

The Joseph Rowntree Foundation (JRF) also questioned whether computer systems at the Department for Work and Pensions would be able to cope with the introduction of the new universal credit, which is due to replace a raft of out-of-work benefits from October 2013.

It warned the overall effect of Mr Duncan Smith's benefit changes would be to add to the complexity of a benefits system supposed to be simpler.

Mr Duncan Smith has always said the key principle behind the universal credit is to remove disincentives to claimants taking jobs, by ensuring people are always better off in work. While universal credit would incentivise more people to take so-called "mini-jobs" – involving less than 16 hours a week – it would encourage people to take the next step into full-time work enabling them to move out of poverty.

However, the JRF said many households would actually be worse off or only marginally better off as a result of the changes.

l Deputy Prime Minister Nick Clegg has admitted that axing child benefit for the richest families was an "excruciatingly difficult" decision.

Letters will be going out from HM Revenue and Customs to advise around one million households on £50,000 or more how their payments will change.

Tory backbenchers fear a backlash from traditional voters over the move that will end entitlement to child benefit.