Even before the change of year from 2021 to 2022, there was a significant change to Universal Credit. This is a benefit that doesn’t stop entirely just because a claimant starts working, with the amount claimed simply decreasing as you work more. This takes place through the Universal Credit taper rate, a mechanism that we’ll break down in this guide.
What is the Universal Credit taper rate?
After earning an income above what is known as the work allowance, a claimant’s Universal Credit payments are then reduced – or tapered off – at a steady rate.
At the 2021 autumn budget, UK Chancellor Rishi Sunak announced a reduction in the Universal Credit taper rate in order to “reward work”. The logic here is that a lower rate incentivises people to keep earning income, since they’ll be able to keep more of it.
How much did the Universal Credit taper rate change?
The Universal Credit taper rate went down from 63p to 55p. In other words, those in employment can now earn an extra 8p more for every extra 1 earned.
When does the Universal Credit taper rate change in 2022?
Actually, the Universal Credit taper rate has already changed. After the announcement at the autumn budget, it wasn’t quite clear when the rate would go down from 63p to 55p. But, this alteration came into force in November of 2021, earlier than most expected.
This means it already applies to those on Universal Credit in 2022. While there could be further changes later in the year, none are expected for the time being.
So, the Universal Credit taper rate for the start of 2022 is set at 55p for every extra 1 earned.
There are still calls, though, for more changes to be made to the way Universal Credit works, especially after a temporary 20 pounds coronavirus-related uplift was ended.