Department for Work and Pensions announces higher Universal Credit payments

Low income households will get a cash boost as higher Universal Credit payments land in bank accounts for the first time.

As announced in the Autumn Budget, the taper rate – the amount that a person’s Universal Credit is reduced by as they earn more – has dropped from 63 per cent to 55 per cent.

Simultaneously, work allowances, the amount eligible claimants can earn before their Universal Credit is reduced, have increased by £500 per year.

The changes, which came into place on Wednesday (December 1) mean people will keep more of what they earn, representing an effective tax cut worth £2.2bn for the lowest earners.

Taken together the move will see, in total, almost two million of the lowest paid working families better off each year by an average of £1,000.

The Department for Work and Pensions has introduced the changes as quickly as possible, passing regulations last week to secure the higher payments for the lowest earners in time for Christmas.

Prime Minister, Boris Johnson said: “It’s right that we support hard-working families, and this change will help some of the country’s lowest income families keep more of their money.

“Together with the increase in the minimum wage and our investments in skills and training, it shows this is a government committed to making work pay.”