Universal Credit claimants can now keep more of earnings – what do you think of changes?

Budget 2021: Sunak announces Universal Credit taper cut

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The Chancellor Rishi Sunak said in his Budget speech that the taper rate for Universal Credit will be cut from 63 percent to 55 percent. That means 55p will be withdrawn from a claimant’s Universal Credit benefits for every pound they earn, instead of 63p.


It means nearly two million working Britons on Universal Credit will get to keep £1,000 more of their wages.

The change will be implemented as soon as possible, and at the latest by December 1, after the Chancellor received a wave of criticism over his decision to cut Universal Credit by £20 per week, amounting to over £1,000 per year.

The Budget announcement has been applauded as the cut to the taper rate will allow more people to work.

Is the cut a step in the right direction to reduce UK poverty? Have your say in our poll.

Currently, many single mothers in the UK find themselves in a catch 22 when it comes to Universal Credit.

The more they work, the more childcare costs rise and the less money they receive from benefits, meaning single mums end up with less money than they would have had without working at all and claiming full benefits.

If single mums do not work to avoid childcare costs and benefit cuts, they are stuck in a vicious cycle of poverty, unable to get a full-time job and improve living standards for their family.

The Treasury said within five weeks of the taper changes a single mother of two, renting in Darlington and working a full-time job on the National Living Wage will see her take-home income increase by £1,200 annually.

Single mum Sara Collins, 51, told the Sun: “It will make a huge difference to me.

“I had to work out the pros and cons of working and now there will be even more benefit to me working.

“I buy food on a daily basis now because I don’t know how much [money] I’ll have left. I’ll be able to buy food now knowing I’ll have enough to last the week.”

Sara gets Universal Credit of £1,744 each month before deductions.

The current taper rate meant her latest pay cheque of £770 for the month was reduced to £470.

But a taper rate of 55p per £1 will leave Sara better off by £38 a month, or nearly £500 a year.

Can’t see the poll below? Click here.

Approximately 30 percent of children in the UK live in poverty according to the Child Poverty Action Group, and a huge 49 percent of children living in single parent households are in poverty.

The latest government figures show that there are more than 1.8million children living in Universal Credit claiming households.

During the pandemic, from May 2020 to May 2021, an extra 323,478 childrens’ guardians began claiming Universal Credit.

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Mr Sunak said a couple with two children who are renting and have one parent working full-time on the National Living Wage while the other works 16 hours a week on the National Living Wage, will be £1,800 a year better off.

Announcing his Budget policy, Rishi Sunak said: “For many of the lowest paid in society, there is a hidden tax on work.”

He added: “To make sure work pays, and to help some of the lowest income families in our country keep more of their hard-earned money, I have decided to cut this rate.”

The Chancellor received an overwhelming round of applause from the Commons.

Do you applaud Mr Sunak’s cut to the taper rate? Vote now and comment below.

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