NEARLY two million workers on low incomes stand to get more cash through Universal Credit from today.
Payments will increase by as much as £1,000 a year because of a change to rules on how much you can earn before payments are reduced
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These are known as the taper rate and work allowance – here’s what you need to know about them and how your Universal Credit payments are affected
What is the taper rate and work allowance?
When you’re in work and on a low income you may be entitled to Universal Credit.
But the benefit payments are reduced the more you earn and this is known as the taper rate.
The taper rate previously reduced payments by 63p for every £1 earned, but that has been slashed to 55p for every £1.
It means nearly two million Brits in work and Universal Credit will be better off from today keeping more of what they earn.
The changes to the taper rate and work allowance – which are a huge win for The Sun’s Make Universal Credit campaign – was first announced by Chancellor Rishi Sunak in his Budget in October.
Also changing is the work allowance – an amount some people can earn that is exempt from the taper rate.
You get a work allowance if you (or your partner) are responsible for a child or have limited capability for work.
How much it is depends on whether you claim the Housing Costs element of Universal Credit.
How much extra Universal Credit will you get?
The exact amount of extra Universal Credit you’ll get now will depend on your circumstances.
That includes if you get the work allowance or not, how many hours you work and how much you earn.
Someone working 35 hours a week earning minimum wage will be around £1,000 better off a year.
You should get a notification about the changes through your Universal Credit account.
And payments from today onward should be higher if you’re working and claiming.
The extra cash from this change is permanent, unlike the £20-a-week extra through Covid which was temporary.
But don’t forget that your payments can also change if you have a change in circumstances too.
If you’re not sure about the extra you can speak to your work coach.
Can more people now claim Universal Credit?
More people will now be eligible for Universal Credit after the change to the taper rate.
Lowering the taper rate means it’s easier to qualify for the benefit with higher earnings.
It’s thought as many as 600,000 more Brits are now entitled to the benefit following the change to rules.
For example a single parent with two children who pays monthly rent of £750 can now earn just under £52,000 before losing their ability to claim the benefit.
Previously the figure was £44,500.
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 Resolution Foundation think tank said.
Anyone who was previously wasn’t entitled to Universal Credit has been urged to check again if they are now eligible.
Those on legacy benefits who have not yet moved across to Universal Credit could now be better off under the new system, according to EntitledTo.
But it’s worth checking this carefully as you won’t be able to move back onto them after switching to Universal Credit.
EntitledTo’s website has a calculator that includes the new rates.
When will you get the boost in your payments?
The changes to Universal Credit took place from November 24 and claimants who get the extra will see the cash appear in their bank accounts from today (December 1).
The cash will come with your normal Universal Credit payments so when you get it will depend on the date you usually get it each month.
The extra cash will continue each month as the change to the rules is permanent.
Martin Lewis urges anyone claiming Universal Credit to start a help to save account
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