Chancellor Rishi Sunak has announced a major change to Universal Credit as part of the Government's latest Budget.
The Chancellor announced an eight percent cut to the Universal Credit taper rate.
Most Universal Credit claimants lose some of their benefits if they earn more money.
The rate at which they lose the benefits is known as the taper rate.
Mr Sunak said he has decided to cut this rate by eight percent, from 63 percent to 55 percent and the changes will take effect within weeks.
He said: "The Universal Credit taper withdraws support as people work more hours. The rate is currently 63 percent, so for every extra £1 someone earns, their Universal Credit is reduced by 63p.
"Let us be in no doubt: this is a tax on work – and a high rate of tax at that."
He added: "To make sure work pays, and help some of the lowest income families in the country keep more of their hard-earned money, I have decided to cut this rate, not by one percent, not by two percent - eight percent."
Mr Sunak said the tax cut would be worth more than £2 billion and would be introduced by no later than December 1.
He said the change will "benefit nearly two million families who will keep, on average, an extra £1,000 a year".
A single mother of two, renting, and working full-time on the National Living Wage will be better off by around £1,200 and a couple, renting a home with their two children, one working full-time, the other working part-time, will be better off by £1,800 a year, the Chancellor explained.
You can follow what's been said during the Budget speech by clicking here.
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