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Thousands of low earners to benefit from income boost as new Universal Credit regulations come into force


By Alan Beresford

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TENS of thousands of low income households are getting a cash boost as higher Universal Credit (UC) payments land in bank accounts for the first time.

Rule changes have seen some benefits claimants handed a cash boost.
Rule changes have seen some benefits claimants handed a cash boost.

As announced in the autumn budget, the taper rate – the amount that a person’s Universal Credit is reduced by as they earn more – has dropped from 63 per cent to 55 per cent. Simultaneously, work allowances, the amount eligible claimants can earn before their UC is reduced, have increased by £500 per year.

The changes mean people will keep more of what they earn, representing an effective tax cut worth £2.2 billion for the lowest earners.

Taken together the move will see, in total, almost two million of the lowest paid working families better off each year by an average of £1000.

The Department for Work and Pensions has introduced the changes as quickly as possible, passing regulations last week to secure the higher payments for the lowest earners in time for Christmas.

Prime Minister Boris Johnson.
Prime Minister Boris Johnson.

Prime Minister Boris Johnson said: “It’s right that we support hard-working families, and this change will help some of the country’s lowest income families keep more of their money.

“Together with the increase in the minimum wage and our investments in skills and training, it shows this is a government committed to making work pay.”

Secretary of State for the Department of Work and Pensions, Therese Coffey.
Secretary of State for the Department of Work and Pensions, Therese Coffey.

Work and Pensions Secretary Therese Coffey added: “Tens of thousands of the lowest earners will see a boost to their bank accounts today following changes to Universal Credit, meaning that people can keep more of what they earn to help with the cost of living.

“We introduced this change earlier than planned which will see up to 500,000 more households benefitting before Christmas.”

Vulnerable households across the country are also able to access the £500 million Household 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).



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