Universal Credit is claimed by more than six million people in the UK and is replacing six older legacy benefits – so how much will payments rise by next year?
Universal Credit looks set to rise by 1.7% next year – we explain exactly what that means for your benefit payments.
The majority of benefit payments rise every April in line with the September rate of inflation, which this week was revealed to be 1.7%. Chancellor Rachel Reeves will confirm the increase in her Autumn Budget on October 30. There are some benefits which are required by law to increase every year, while others – such as Universal Credit – which are subject to Parliamentary approval.
Universal Credit is claimed by more than six million people in the UK and is replacing six older legacy benefits, including Working Tax Credit, Child Tax Credit, Income Support, Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance and Housing Benefit, unless you’re in supported or temporary housing.
Universal Credit is made up of a standard allowance, which is the basic amount you get before any additional elements – for example, if you have children or are unable to work due to illness – or any deductions are taken into account.
You may be subject to deductions if you have savings or if you owe the Department for Work and Pensions (DWP) money. If you work, there is a taper rate which reduces your maximum Universal Credit payment as your earnings increase.
The taper rate is 55% which means 55p is deducted from your maximum Universal Credit payment for every £1 you earn. Some people get a “work allowance” which is a set amount you can earn before your Universal Credit is reduced.
There is also a childcare costs element, which allows working parents to reimburse up to 85% of eligible childcare costs for a child or young person, up to the maximum amounts which we’ve listed below. Here is how much Universal Credit could rise by next April.
Universal Credit
Standard allowance
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Single under 25: £311.68 a month to £316.98 a month
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Single 25 or over: £393.45 a month to £400.14 a month
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Joint claimants both under 25: £489.23 a month to £497.55 a month
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Joint claimants, one or both 25 or over: £617.60 a month to £628.10 a month
Child element
- First child born before April 6, 2017: £333.33 a month to £339 a month
- First child born on or after April 6, 2017 or second child and subsequent child: £287.92 a month to £292.81 a month
- Disabled child element lower rate: £156.11 a month to £158.76 a month
- Disabled child higher rate: £487.58 a month to £495.87 a month
Limited capability for work
- Limited capability for work: £156.11 a month to £158.76 a month
- Limited capability for work or work-related activity: £416.19 a month to £423.27 a month
Carer element
- £198.31 a month to £201.68 a month
Work allowance
- Higher work allowance (no housing amount): £673 a month to £684 a month
- Lower work allowance (with housing amount): £404 a month to £411 a month
Childcare costs element
- Maximum for one child: £1,014.63 a month to £1,031.88 a month
- Maximum for two or more children: £1,739.37 a month to £1,768.94 a month
