More generous Universal Credit rules for working families introduced from tomorrow
3 mins read
Tuesday 23 November 2021
Changes to the Universal Credit rules that will help working families are being introduced from tomorrow.
Originally announced in the Autumn budget, the two main changes are:
- Work allowances increasing
Firstly Universal Credit work allowances are increasing. Your work allowance is an initial amount of earnings that is ignored as income where a claimant is either a parent with dependent children or a disabled person with a limited capability for work. The work allowance for claimants who get help with their rent is increasing from £293 to £355 per month. The work allowance for those who don’t get help with rent is increasing from £515 to £557 per month.
- Taper rate reducing
The second change is that the Universal Credit taper rate is reducing from 63% to 55%. The taper rate is the amount your benefit decreases by as your earnings go up. Currently, for every £1 of excess earnings you have above the work allowance your Universal Credit award is reduced by 63p. From 24 November onwards you will only lose 55p for every £1 of extra earnings rather than losing 63p. This means that working claimants will be able to keep hold of more of their earnings.
Contact’s benefits expert, Derek Sinclair, said: “These changes are undoubtedly good news for working families getting Universal Credit.
“However, it’s difficult to understand why similar help hasn’t been given to those working families who still get working tax credit instead of Universal Credit. Families on tax credits who are thinking of moving onto Universal Credit to take advantage of these more generous earnings rules should get advice first. Many families with disabled children would be worse off on Universal Credit due to cuts in payments for disabled children.
“Contact believes the government should have gone further and increased Universal Credit additions for disabled children, especially for those who are unable to work due to their caring responsibilities. These Universal Credit changes do nothing to help out of work families, many of whom are facing spiralling costs as our Counting the Costs survey has shown.”
Join our campaign to take action
We can’t stay silent about the shocking findings of our Counting the Costs report. We are stepping up our campaign and calling for:
• An increase in Carer’s Allowance and child disability payments under Universal Credit.
• Energy companies to introduce a special tariff for households with sick and disabled children due to the rising bills facing families this winter.
• The government to invest in specialist independent advice services, to help families with disabled children claim what they are entitled to.
If you want to speak out too, the first step is to write to your local MP about these shocking findings and calling for urgent action. Write to your MP now using our template letter.