Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, if she will make a comparative assessment of the potential effect on public finances of an (a) increase and (b) decrease of 1p per £1 to the earnings taper rate for universal credit.
No such assessment has been made. Whilst we keep our policies under review, no decisions have been taken about making further changes to the Universal Credit Taper rate.
The way Universal Credit treats people’s earnings seeks to ensure they are better off in work. The single 63% taper rate reduces their Universal Credit by less than they are earning and some claimants, those with children or limited capability for work, will also benefit from a work allowance which is the amount they can earn before their benefit is reduced.
Universal Credit reduces the financial and administrative barriers to work in the former system of benefits and tax credit, where claimants could face a withdrawal rate of over 90%, meaning Universal Credit claimants get to keep more of their earnings.