MILLIONS of Brits on Universal Credit WILL be able to keep more of what they earn, Rishi Sunak confirmed today.
The Chancellor confirmed The Sun's story this lunchtime that he would slash the harsh Universal Credit taper rate that punishes workers by a whopping EIGHT per cent.
In a win for The Sun's Make Universal Credit Work campaign, the Treasury will allow workers to keep more of the money they earn and incentivise people to take on extra work.
And the work allowance will also go up by £500 too.
And the changes will kick in from no later than December this year – meaning a Christmas boost for families.
It will mean two million families will keep, on average, an extra £1,000 a year.
Rishi said today: "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 1%, not by 2% – but by 8 per cent.
"This is a tax cut next year worth over £2bn. Nearly 2 million families will keep, on average, an extra £1,000 a year.
"Changes like this normally take effect at the start of the new tax year in April. But I want to help people right now.
"So we’ll introduce this within weeks, and no later than December 1st."
He claimed a single mum of two renting a home and working full time on the minimum wage would be better off by £1,200.
And a couple renting with their two kids, one working full and the other part time, would get an extra £1,800 a year.
The Chancellor said to huge cheers from the Tories on the backbenches: "This is a £2bn tax cut for the lowest paid workers in the country.
"It supports working families. It helps with the cost of living. And it rewards work."
The harsh taper rate effectively taxes Brits 63p in the pound on anything they earn over their base level of benefits – which puts many thousands off applying for better paid jobs or taking on more hours.
The package will crucially target those who are already working rather than the flat £20 Covid uplift, which was given to everyone.
Single mum Sara Collins, 51, will be better off under the new rules.
The mother of three was made redundant during Covid and is now a mature student and works 20 hours a week as a money coach for her local council.
She told The Sun: "It will make a huge difference to me.
"I had to work out the pros and cons of working and now there will be even more benefit to me working."
Sara gets Universal Credit of £1,744 each month before deductions.
The first £293 Sara earns doesn’t affect the amount of Universal Credit she gets – but every £1 she earns over this reduces her Universal Credit by 63p.
Her latest take home pay of £770 for the month means that she loses £300.
But with a taper rate slashed to 55p Sara will lose less cash and be better off by £38 a month, or nearly £500 a year."
Source: Read Full Article