HUNDREDS of thousands more Brits will be entitled to Universal Credit amid a massive expansion of the welfare state’s reach.
Single parents paying the higher rate of tax will be entitled to the benefit for the first time as the Government extends help to the middle classes.
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It comes after Rishi Sunak’s Budget shake-up – which will mean a greater number of workers earning more than £50,000 can now claim the state support.
Some 60,000 extra families will be entitled to receive support, according to the Institute for Fiscal Studies.
Mr Sunak reduced the Universal Credit taper rate at the Budget.
It means those who apply can keep more of their benefits, even as their earnings rise.
The Telegraph reports tonight that some seven million households will be entitled to Universal Credit after the Chancellor’s tweaks.
A quarter of all working-age families can now claim.
And a single parent with two children who pays a monthly rent of £750 can now earn just under £52,000 before losing their ability to claim the benefit.
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That’s a huge rise from £44,500 before the Budget.
A couple with just one earner in the same circumstances can make almost £59,000 in income before being cut off, a rise from £49,300 previously.
The average Brit worker makes £31,285 a year. The higher rate of income tax kicks in at just above £50,000.
It follows a storm over a temporary £20 uplift in weekly Universal Credit during the pandemic.
But at the Budget, the taper rate was reduced from 63 per cent to 55 per cent.
That means that for every extra pound earned, the benefit payment will be reduced by 55p – an additional 8p per pound going to claimants.
Tom Waters, economist at the IFS, said the reach of Universal Credit is “perhaps much wider than is commonly understood”.
Three in every seven families with children will be entitled to at least some Universal Credit
He told the paper: “The Budget reforms extend that reach further up the income distribution, by slowing the speed that the benefit is withdrawn as earnings increase.
“It will now be the case that three in every seven families with children will be entitled to at least some Universal Credit at any one time, and many more over the course of a lifetime.”
James Heywood, head of welfare at the Centre for Policy Studies, said the changes will mean many claimants that are in work will be better off – despite the end to the £20 uplift.
“A lot of the people who will be the main beneficiaries of these changes are not the very poorest, they are people in work on relatively low earnings – for example, people earning £20,000 a year or so,” he said.
“Those lower middle class families are the sorts of people that will be particularly benefiting from the Universal Credit changes that they announced at the Budget. In that sense, I think you probably could argue that it is a very Red Wall-friendly policy.”
He added higher earning taxpayers “won’t end up claiming anyway because if they do it will be relatively trivial amounts”.
The Department for Work and Pensions did not respond to a request for comment.
Meanwhile, nearly two million Brits on Universal Credit will keep more of what they earn in just two weeks.
Changes to the taper rate will kick in on November 24.
The changes are a huge win for The Sun’s Make Universal Credit Work campaign.
Budget: Massive Universal Credit shake-up so 2million can keep an extra £1,000 a year
