Secretary of State for Work and Pensions Damian Green has said that three million households across the country will keep more of what they earn as a result of a £700 million boost to Universal Credit.
The rate at which a Universal Credit payment reduces as a claimant moves into work – known as the taper rate – has been lowered from 65p to 63p, starting on Monday.
The Department for Works and Pensions (DWP) estimates that a couple with two children earning £30,000 a year could benefit by £425 a year.
Universal Credit replaces Jobseeker’s Allowance, Employment and Support Allowance, Income Support, working and child tax credit and Housing Benefit. Claimants receive their Universal Credit in a monthly payment.
Damian Green said:
“Creating a welfare system that rewards work is central to our plan to build a fairer Britain for all.
“We want everyone to be able to get on and support their families – that’s why through Universal Credit, when people start work, they keep more of every pound they earn.
“This complements the support that work coaches are already offering to help people progress in their jobs – to take on more hours and earn more money – by making sure it always pays to be in work.”
Universal Credit replaces six current benefits with a monthly payment that gradually reduces as earnings increase. It aims to ensure people are better off in work. The government says evidence shows people are moving into jobs faster and staying in work longer than under the previous system.
Universal Credit is available for all new claims from single jobseekers, wherever they are in Great Britain – nearly 15,000 new claims are made every week.
In May 2016, the government started the expansion of Universal Credit to a wider range of claimants – in July 2017, it will be rolled out at a rate of around 30 Jobcentres a month.
The Current Work Allowance is £397 per month if a claimant’s Universal Credit payment does not include housing support – or £192 per month if it does include housing support.
The reduced Universal Credit taper rate was announced in the Autumn 2016 budget.
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