It was reported that the Universal Credit cut rate “may be reduced” by the Chancellor of the Exchequer on Wednesday March 23. The reduction rate is how your Universal Credit payments are reduced once you earn more than your working allowance.
The Universal Credit revenue reduction rate is currently 55%. This means that for every £1 claimants earn on top of their working allowance, their Universal Credit will be reduced by 55p. This amount will be automatically deducted from their Universal Credit payment.
Ahead of the spring declaration, reports indicated that the lowest paid workers could benefit from a tax reduction in the form of a gradual change.
Mr. Sunak may also increase the permitted rate of pay before the effective tax takes effect, reports The Sun.
Working Allowance per month is currently set at £293 if Universal Credit includes housing assistance. This is at the rate of £515 if housing assistance is not included.
Speaking on Sunday March 20, Mr Sunak said: “For people on Universal Credit, we’ve taken an approach to make sure their work is rewarded and of course I want to make sure we’re helping people who are the most vulnerable.
“I’m extremely proud that we’re doing this because I want to make sure these people get our help, and they get our help.”