A major change to Universal Credit is coming into effect today (November 10) that could see some claimants receive an extra £1,000 a year, the Department for Work and Pensions (DWP) has confirmed.
The changes, which are to do with the Universal Credit taper rate and work allowances, have been introduced early so that people can benefit before Christmas.
The taper rate, which refers to the amount that is deducted from a claimant's sum for every £1 they earn above their work allowance, is being lowered from 63% to 55%.
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Additionally, work allowances - the amount a claimant can earn before their Universal Credit is reduced - will go up by £500 per year, as reported by the Daily Record.
Both changes mean that many families claiming Universal Credit will receive more money - with nearly 2 million people reportedly set to be £1,000 better off a year.
However, this number is lower than the 5.2 million claimants affected by the withdrawal of the £20 Covid uplift, which temporarily allowed households to receive more money from Universal Credit.
Announcing the changes to the Commons in October, Chancellor Rishi Sunak, said: "This is a £2 billion tax cut for the lowest paid workers in our country.
"It supports working families, it helps with the cost of living and it rewards work."
Responding to the Universal Credit announcement, Citizens Advice Scotland Chief Executive Derek Mitchell said: “Changes to Universal Credit so working people can keep more of what they earn are very welcome, and something Citizens Advice Scotland has been campaigning for.
“However, for many it will not make up for the impact of reducing Universal Credit by £20 per week, particularly as inflation is rising and energy bills have gone up.
“In Scotland, around four in 10 people on Universal Credit are in work - so changes to the taper rate don’t help six in 10 claimants.”
Analysis by Citizens Advice Scotland revealed that over 1.4 million people ran out of money before pay day during the coronavirus pandemic.
Peter Tutton, Head of Policy, Research and Public Affairs at StepChange Debt Charity, said: “The improvement to the Universal Credit taper is very welcome, although while 2 million working households will benefit, millions of others will not."
