In case you didn't hear, the
2021 Autumn Budget and Spending Review (gov.uk) was announced yesterday.
In yesterday's review, the Chancellor announced some changes to the Universal Credit taper rate and Work Allowances.
We were sent the following summary, which I hope will help you to understand what this might mean for you.
Universal Credit taper rateThe taper rate means that if people increase
their earnings, for example by working more hours, their Universal Credit is
gradually withdrawn. Currently the taper rate is 63p, meaning for every £1 a
person earns after tax their Universal Credit is reduced by 63p. To make sure
work pays and people are supported to thrive and achieve their potential, the Government is
cutting this taper rate by 8p, from 63p for 55p, ensuring more money in
people’s pockets.
Universal Credit Work AllowanceSome households can earn a set amount before
the taper rate kicks in. This is called the Work Allowance, and is generally
for households on Universal Credit who are in work and either looking after a
child or have a household member with limited capability for work.
Work Allowances are currently set at £293 a
month if the household receives housing support, or £515 if they do not receive
housing support. These are both being increased by £500 per year.
Both of these changes will be implemented from
December 2021, and together they will benefit 1.9 million households who will,
on average keep around an extra £1,000 a year. The changes apply across Great
Britain, and the Northern Ireland Executive will be funded to match them.
Other key measures to help people
into work and tackle the cost of living
- The government is providing targeted
additional support for groups which may need extra help to get into work
and progress. This includes workers who have left the furlough scheme and
are making a Universal Credit claim who will be prioritised through the
Job Finding Support scheme, and older workers who will benefit from additional
support to return to, or remain in work.
- Over
the winter the £500m Household Support Fund will help vulnerable
households with the cost of essentials such as food, clothing and
utilities – Local Authorities in England will be allocated up to £421m of
this funding and will ensure it reaches those who need it most; with 50%
ring-fenced for households with children. The additional funding will be
allocated to the devolved administrations in the usual way.
- Increasing the National Living Wage from £8.90 per hour to
£9.50 per hour for over 23s
- Young
people and apprentices will also see their wages boosted as the National
Minimum Wage for people aged 21-22 goes up to £9.18 an hour and the
Apprentice Rate increases to £4.81 an hour.
- Raising the personal tax allowance to £12,570 from April,
meaning workers keep more of the money they earn
- Maintaining
the energy price cap, which since 2019 has saved 15 million households
£100 a year on average
Supporting
disabled people into work
And to support disabled people into work, the
government confirmed as part of the spending review that it is providing
specialised disability employment support worth over £1.1bn over the next three
years, including an additional £156m over the SR period for health and
disability support with a focus on additional work coaches.
This is alongside the Work and Health Programme
which will continue to provide personal support to disabled people to find jobs
that match their employment and health needs, and the Access to Work scheme
which will continue to help cover the costs of workplace adaptations, special
equipment and travel.
What do you think of the announcement?
