29th October, 2021
Chancellor, Rishi Sunak announced, in his autumn budget, several changes, which should benefit tenants, particularly those who work in low paid jobs, and are claiming benefits. However, he resisted demands to restore the £20 per week uplift to Universal Credit, introduced in March 2020, as part of the Government’s pandemic measures, designed, as it was, to offset additional costs arising from the lockdown.
The uplift was controversially withdrawn from 6th October, with Joseph Rowntree Foundation estimating 5.5 million families lost £1000 per year, in the process.
Some beneficial changes have been introduced, including, an increase to the minimum hourly wage to £9.50 which the government predicts, should help around 2 million low paid workers.
UC claimants, who are working, will enjoy an increase in their Work Allowance. The current £293 per month allowance, which applies to households who are in work and either looking after a child or have a household member with limited capability for work, plus “housing costs” included in their award, will increase to £335. In effect, this means, the first £335 of net earnings is ignored in the calculation. For those claimants in the same group, who don’t have “housing costs” the current £515 allowance will increase to £557.
In addition, the current “earnings” taper rate of 63p in £ will reduce to 55p. This means that those UC claimants with earnings, will still experience an offset to their Universal Credit award, based on their level of earnings, but the amount of deduction will not be as punitive, leaving a little extra in their pocket.
To illustrate how these changes should impact, I have created an example of a young disabled man which I’ve displayed on a few PP slides, showing the before and after situations. In his case, he benefits by £44 per month. I have also included a slide which shows the new rates of Third-party deductions.
Both the WA and taper changes will be implemented from 1st December 2021, with the Chancellor predicting, 1.9 million households, on average, will keep around an extra £1,000 a year. These positive changes apply across Great Britain and will, to an extent, offset the loss of the £20 per week uplift, but only for a minority of UC claimants. Single claimants and childless couples will still lose out, especially when you factor in rising inflation.
If you require calrification on any of this, please contact me on 07733 080 389 or email firstname.lastname@example.org
UC Advice & Advocacy Ltd