The Impact Of The Budget Changes On Earnings And Universal Credit
The Autumn Budget And Spending Review 2021 was presented on Wednesday 27 October and has made a lot of important differences. In particular, if you work and/or claim Universal Credit then you need to know the following:
Work Allowance Increase And Taper Reduction
The Work Allowance only applies to you if:
- You have responsibility for one or more children (or qualifying young persons), or
- You or your partner have limited capability for work (a health condition or disability).
If neither of these circumstances apply to you, your Universal Credit payments will be affected as soon as you start earning money from paid work.
There are 2 Work Allowance rates. Which one you get depends on whether you receive help with housing costs.
Getting Help With Housing Costs (Rent)
If you are earning £200 per week or £866.66 per month, you get to keep £505.26 per month of your earnings at present.
However, from 1 December 2021, you will be able to keep £574.25 of your earnings per month.
This means that you will be £68.99 per month, or £15.92 per week better off. However, be aware that any Council Tax support you receive would be reduced.
No Housing Costs
If you are earning £200 per week or £866.66 per month, you get to keep £673.25 per month of your earnings at present.
However, from 1 December 2021, you will be able to keep £696.53 of your earnings per month. You will be £23.28 per month better off.