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First published:
25/11/2021

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Universal Credit boost for mental health

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This winter, the Universal Credit taper rate will be cut by 8p from 63p to 55p, meaning you could keep more of your money when claiming Universal Credit and working. 

We’re here to explain the taper rate and how the reduction might help you manage your mental health and money.

What is the taper rate?

The taper rate is the amount of money the Department of Work & Pensions (DWP) reduces your Universal Credit when you earn money above the working allowance.

What is the work allowance?

The work allowance is the amount of money you can earn from a job before your Universal Credit (UC) payment is affected. 

The DWP will reduce your UC payments when you receive UC and earn over a certain amount of money from working. 

You will qualify for a Universal Credit work allowance if you or your partner either have:

  • Limited capability for work (because of a mental health condition or disability)
  • Responsibility for a child

There are two work allowance rates. Your Universal Credit claim determines these:

Universal Credit claim Monthly work allowance
If your Universal Credit payment include housing support £335
If you do not receive housing support for Universal Credit £557

The taper rate is how much the DWP begin taking back when you go above the work allowance. Learn more about the taper rate and work allowance here.

How will the taper rate reduction affect me?

If you are on Universal Credit and are working, then the reduction in the taper rate means you should keep more of the money you earn from working. If you are on UC but not in work, there will be no change to the amount of UC you get.

Until 1st December 2021 at the latest, the taper rate is set at 63p for every £1 you earn above your working allowance. This means you keep 37p of every £1 above the allowance.

By no later than 1st December 2021, the taper rate goes down to 55p. This means that you will keep 45p of every £1 you earn above your working allowance. 

On average, you might receive approximately £9-£10 extra a week in your Universal Credit payment. This is because the DWP will take back less of your earnings once you go above the work allowance.

How much Universal Credit will I get under the new rules?

This depends on your circumstances. If you are working whilst claiming Universal Credit (UC), you might receive more money in your UC payment. You might not. 

Your work allowance can also change depending on your situation. You can learn more about what happens if your circumstances change here.

If you are not working, these changes will not increase your Universal Credit payments. Still, you shouldn’t see a decrease in your payments either.

I am worried about what these changes mean for my money and mental health. What can I do?

We understand the taper rate reduction does not recover the £20 a week cut to Universal Credit made in October 2021. If you or anyone you know is struggling to cope, you can use the following resources to help:

  1. Use our Universal Credit Mental Health Guide
  2. Information & Support for Mental Health Conditions
  3. Managing your Mental Health & Money After Government Cuts
  4. Free mental health and money advice toolikt

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