Almost two million of the lowest income working households who
receive Universal Credit will today benefit from a cash boost
worth £1,000 on average.
The Department for Work and Pensions has worked around the clock
to implement a reduction to the Universal Credit taper rate as
well as an increase to claimants’ work allowances, effectively
giving the lowest paid workers on Universal Credit a tax cut
worth £2.2 billion, one week ahead of the schedule announced by
the Chancellor in his recent Budget.
By bringing in the change a week earlier than planned, up to
500,000 more people could benefit before Christmas with
almost two million of the lowest paid in-work claimants overall
being better off by around £1,000 a year on average.
Claimants will be notified how much Universal Credit they will be
awarded in their usual monthly statement, with the first of those
to reflect the changes being issued today.
Work and Pensions Secretary Thérèse Coffey said:
From today, two million people will see their income boosted by
£1,000 per year, on average, as we bring in an effective tax cut
worth £2.2billion for the lowest paid.
We are making the change earlier than planned which means up to
500,000 more households can benefit before Christmas.
, Chancellor of the Exchequer
said:
We want this to be a country that rewards hard work by helping
the lowest income families keep more of their hard-earned cash.
That’s why at Budget, I announced an effective tax cut for 2
million people worth over £2 billion. These changes come into
force today and will mean that with Christmas approaching,
hard-working families keeping an extra £1,000 a year of what they
earn.
Work allowances, the amount a claimant can earn before their
Universal Credit is reduced, will increase by £500 per year from
today meaning many families will be able to earn over £500 per
month before their benefits are tapered off.
Simultaneously, the taper rate, the amount that a person’s
Universal Credit is reduced by when their earnings are more than
their work allowance, will drop from 63% to 55%.
With a number of people expected to now be newly eligible for
Universal Credit and those not currently claiming potentially
being better off, people are being urged to check a benefit calculator on the
government’s website gov.uk to see if they could increase their
income.
Those receiving other benefits from the government including
Working Tax Credits should note that if they apply for Universal
Credit they cannot return to their previous benefits.
For those not in work, they will continue to benefit from
Universal Credit standard allowance and additional extra support
if they have children, have a disability or health condition
which prevents them from working or need help paying their rent.
Vulnerable households across the country are also able to access
a new £500 million support fund to help them with essentials over
the coming months as the country continues its recovery from the
pandemic. The devolved administrations will receive almost £80
million of the £500 million (£41 million for the Scottish
Government, £25 million for the Welsh Government and £14 million
for the NI Executive).
More information
-
Budget changes – effectively representing a £1,000 tax cut
for the lowest paid working families on Universal Credit -
arrive one week early
-
Taper rate reduced by 8% and work allowances up £500
