Universal Credit Taper Rate Reduction: Household Budgets

Work and Pensions – in the House of Commons on 13th December 2021.

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Photo of Karl McCartney Karl McCartney Conservative, Lincoln

What assessment she has made of the impact of the universal credit taper rate reduction on household budgets.

Photo of David Rutley David Rutley Assistant Whip (HM Treasury), The Parliamentary Under-Secretary of State for Work and Pensions

The reduction in the taper rate and increase in the work allowances mean that 1.9 million households will keep on average an extra £1,000 a year, representing an effective tax cut for low-income working households in receipt of universal credit that will be worth £2.2 billion a year in 2022-23. We are allowing working households to keep more of what they earn and strengthening incentives to move and progress in work.

Photo of Karl McCartney Karl McCartney Conservative, Lincoln

Unlike the legacy system, which has in-built cliff edges, universal credit ensures that it always pays to take on more hours. Will my hon. Friend commit to working with employers, especially those in my constituency of Lincoln, in low-pay sectors to ensure that they can help their employees understand that?

Photo of David Rutley David Rutley Assistant Whip (HM Treasury), The Parliamentary Under-Secretary of State for Work and Pensions

Throughout our job network, our employer partnership teams and employment advisers are working closely with local employers to ensure that they help claimants understand how best to benefit from the recent positive changes to universal credit taper rates and work allowances. I am sure that my hon. Friend, with his fantastic shirt, will assist with his characteristic energy with this important task.