Source · Select Committees · Scottish Affairs Committee
Recommendation 106
106
A work allowance is the amount that a claimant can earn before their Universal Credit...
Conclusion
A work allowance is the amount that a claimant can earn before their Universal Credit payment is affected. Once a claimant starts work their Universal Credit amount will gradually decrease as the claimant earns more money through their job. The work allowance is currently set at: • £293–if a claimant’s Universal Credit award includes housing support; or 264 Scottish Government (WPS0013) 265 HC Deb, 3 March 2021, Col 252 [Commons Chamber] 266 Q193 267 Q193 268 Q193 269 Q193 270 Oral evidence taken before the Work and Pensions Committee on 2 February 2021, HC (2019–21) 178, Q381 271 Oral evidence taken before the Work and Pensions Committee on 2 February 2021, HC (2019–21) 178, Q381 272 Oral evidence taken before the Work and Pensions Committee on 2 February 2021, HC (2019–21) 178, Q385 273 Q64 & Q101 42 Welfare policy in Scotland • £515–if the claimant does not receive housing support.274
Government Response
Not Addressed
HM Government
Not Addressed
Universal Credit aims to reduce the number of workless households by reducing financial and administrative barriers to work. The 63% single earnings taper rate ensures that payments reduce in a transparent and predictable way as earnings increase. A work allowance is an amount that claimants can earn before their Universal Credit starts to reduce by the taper rate. The work allowance is targeted on those claimants with the greatest barriers to the labour market namely those responsible for children or who have limited capability for work. The UK Government has no plans to extend the work allowance to single adults. The work allowance is increased each year as part of the normal benefits uprating process. In addition, at the Autumn 2018 budget, an extra £1.7 billion a year was put into work allowances to increase them by £1,000 in April 2019, strengthening the Universal Credit work incentives even more and providing a boost to the incomes of the lowest paid. This resulted in 2.4 million families keeping up to an extra £630 per year of what they earn.