Universal Credit claimants to receive an additional £1,000 per year under new DWP decision

The Department for Work and Pensions (DWP) has confirmed that the changes in Universal Credit Temper Rate and Work Allowance will be effective from Wednesday (November 24).

Regulations have been put in place to ensure that the £2.2bn tax cut announced in the autumn budget will come into law to help low-wage families with the cost of living and “reward work”, daily Record informed of.

Work allowances – the amount a claimant can earn before reducing their Universal Credit – will increase by £500 per year, meaning many families will be able to earn more than £500 per month before their benefits are reduced.

Simultaneously, the taper rate — the amount that falls short of a person’s Universal Credit when their earnings exceed their work allowance — will drop from 63% to 55%.

Taken together, the changes mean that nearly two million households would be better off on average £1,000 per year. However, this is less than a third of the 5.2 million households affected by the removal of the £20-per-week Universal Credit raise.

Announcing the change in the Commons last month, Chancellor Rishi Sunak said: “This is a £2 billion cut for the lowest-paid workers in our country.

“It supports working families, it helps with the cost of living and it rewards work.”

Responding to the Universal Credit announcement, Derek Mitchell, chief executive of Citizens Advice Scotland, said: “Changes to Universal Credit so that working people can keep more than they earn are very welcome, and some Citizens Advice Scotland is campaigning for.

“However, for many this will not make up for the impact of reducing Universal Credit to £20 a week, especially as inflation is rising and energy bills have gone up.”

DWP has produced a video explaining the changes in taper rate and work allowances, which will be made available to the public soon.

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