Universal Credit rules have changed – and you could see your income boosted by £1,000

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The Department for Work and Pensions (DWP) confirmed the taper rate and work allowance changes came into effect this week. An estimated two million households will benefit from this change first announced in the Autumn Budget.

This rate will be reduced from its current 63 percent to 55 percent.

Going forward, Universal Credit claimants will see their claim reduce by 55p instead of 63p for every £1 they earn over the work allowance.

However, these extra pennies are not the only beneficial change due for Universal Credit claimants.

The work allowance, which some claimants may be eligible for, is also being increased, by £500 a year. 

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It means families on Universal Credit can earn over £500 every month before seeing the taper rate reduce their earnings.

Combined, the work allowance increase and taper rate change will see nearly two million families roughly £1,000 better off every year.

While changes like these announced in the budget would usually only come into force at the start of the next financial year, which would be April 2022, Mr Sunak announced an earlier deadline.

Mr Sunak had set a hard deadline for December 1 for the taper rate change to be implemented and it appears the government has exceeded expectations by implementing it even earlier than planned. 

Work and Pensions Secretary Therese Coffey commented: “We are making the change earlier than planned which means up to 500,000 more households can benefit before Christmas.”

Mr Sunak explained his reasoning behind the decision: “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 £2billion.”

Those that are newly eligible for Universal Credit and those that are not currently claiming it are encouraged to check the benefit calculator on the Gov.uk website.

The calculator will inform individuals on whether they are eligible to increase their income. 

It has also been noted that those receiving Working Tax Credit and want to apply for UC will not be able to return to their previous benefits if they begin claiming UC.

Unemployed claimants will continue to receive the UC standard allowance as well as being awarded additional extra support if they have:

Children

Disability or health condition which prevents them from working

Need help paying rent.

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