Millions of individuals receiving Universal Credit will experience a delay in receiving their increased payments, despite the rates going up in April. The standard allowance for Universal Credit, which represents the amount entitled before any deductions, will see an inflation-adjusted increase starting April 13. Specifically, for single claimants above 25 years old, the monthly standard allowance will rise from £400.14 to £424.90. However, due to the arrears payment system of Universal Credit, the impact of this raise will not be noticeable until June.
The increased rates will only affect Universal Credit assessment periods commencing on or after April 13. Since Universal Credit payments are disbursed a week after each assessment period ends, the new rates will only take effect in June payments.
Your Universal Credit amount is determined based on your earnings and deductions within your assessment period. Nearly eight million people in the UK claim Universal Credit. Eligibility for Universal Credit is contingent upon various personal factors such as age, living arrangements, relationship status, income, savings, and sometimes, physical and mental health.
For employed individuals, there is a taper rate that reduces the maximum Universal Credit payment as earnings increase. This taper rate stands at 55%, meaning 55p is deducted from the maximum payment for every £1 earned. Some individuals receive a “work allowance,” allowing them to earn a set amount before their Universal Credit is reduced. The work allowance is £411 per month for those receiving housing cost assistance and £684 per month for those who do not.
In addition to standard allowances, there are various other elements and deductions that can impact Universal Credit payments. Further details on these can be found on the GOV.UK website.