swallowedAfly, I'm reading, you make a great deal of sense 
Poulay - thanks for posting that link, it's from March 2012 so much more up to date than the report I'd found.
I'm still a bit
about where this figure of £7500 was plucked from, though it must be said that the Children's Society used it as an example of a threshold & it's really the newspaper articles & initial BBC report that have reported it as (possibly scaremongering) fact.
But I'm also very
that in 2012, 2 years after the government proposed Universal Credit, they still have no actual figures on how they plan to implement it or what thresholds they plan to use.
It looks to me like they've found out it won't be as easy as they said to simplify things, and they're worried that their clever new system may end up being as complicated and costing more than the old one and are looking to cut costs.
I think they bunged some figures in, realised that too many extra children would be entitled to FSM (no surprise if there's already 700,000 in low-waged households who aren't currently getting them) & have started revising their income thresholds rapidly down.
Which will affect a lot of low-waged workers who currently get tax-credit top-ups, not just people who already get FSM and might lose them.
It seems clear that whatever system we end up with, there will inevitably be thresholds at which work (or extra hours) doesn't pay until someone gets either a pay rise or a pay cut - some people will factor that in for the sake of holding on to their career or self esteem, but it's hardly a surprise that someone in a soul-destroying job that you really would only do for the money, would choose to drop a few hours a week to slip under a benefit threshold. Or even make life decisions like having a child (or not) based on how that threshold may affect them.
If you are in a higher income bracket, maximising your income by whatever leagal means possible is be seen as prudent by many people. Things like putting money in an ISA at the right time of year to minimise the tax paid on savings - most Money sections in newspapers have articles on this kind of thing every week.
Whereas if you are on the breadline, making life decisions to legally maximise your income (by a few £s a week) is seen as feckless and sponging...
Why is there this idea that poor people are supposed to be so much more moral in their decision-making than rich people? If anything, the incentives to make decisions based on the net gain or loss to society probably fade into the background a bit, when the extra few £ you might gain is literally the difference between food on the table or hungry children.