Universal Credit taper rate: What is the Universal Credit taper rate? | Personal Finance | Finance

0


Universal Credit is only paid to eligible individuals who meet certain requirements. For people on a low income, their earnings may affect how much they receive. The taper rate is the calculation used to set how much benefits a claimant loses based on their earnings. Express.co.uk has compiled a guide to explain what the Universal Credit taper rate is and how it works.

What is Universal Credit?

Universal Credit is a relatively new benefit payment which is given to eligible recipients on a monthly or bimonthly basis to help them with the cost of living.

The payment is designed to support individuals who are out of work or on a low income.

Universal Credit replaced these payments, which are called legacy benefits by the Department for Work and Pensions:

  • Income support
  • Working tax credit
  • Income-based jobseeker’s allowance (JSA)
  • Income-related employment and support allowance (ESA)
  • Housing benefit
  • Child tax credit.

READ MORE: Universal Credit, PIP & State Pension claimants start to get bonus

How to work out how the taper rate will impact your income

First, you will need to understand if your Universal Credit award will be affected by the earnings taper.

The monthly work allowances are set by the Government each year.

Single person/couples responsible for one or more children or qualifying young persons without Housing Support: £512.

Single person/couples with a limited capability for work including Housing Support: £292.

If you have earnings but you or your partner are not responsible for a child or do not have limited capability for work you will not be eligible for a work allowance.

READ MORE: Universal Credit payments not enough to live on for many – be aware

To calculate the earnings taper which applies to your award you should undertake the following:

  • Take your total monthly earnings figure after tax, National Insurance and relevant pension contributions which have been removed
  • Deduct your monthly work allowance, if you are eligible for one
  • Apply the taper rate by multiplying your remaining earnings by 0.63.
  • This is the amount which will be deducted from your Universal Credit maximum amount when calculating your award.





Source link

Leave A Reply

Your email address will not be published.