Millions of individuals receiving Universal Credit will experience a delay in receiving their increased payments, despite the scheduled rate hike in April. The standard allowance for Universal Credit, which represents the amount before any deductions or additional factors, will see an above-inflation increase starting from April 13. For single claimants over 25 years old, the monthly standard allowance will rise from £400.14 to £424.90. However, due to Universal Credit being paid retrospectively, recipients will only observe the pay raise in their June payments.
The enhanced rates will solely impact Universal Credit assessment periods commencing on or after April 13. Payments for Universal Credit are disbursed one week after the conclusion of each assessment period, resulting in the new rates taking effect in June payments.
The assessment period determines the amount of Universal Credit received based on earnings or deductions within that timeframe. Nearly eight million people in the UK claim Universal Credit. Eligibility for Universal Credit is contingent on various personal factors such as age, living arrangements, relationship status, income, savings, and sometimes physical and mental health.
For those employed, a taper rate is applied, reducing the maximum Universal Credit payment as earnings increase. The taper rate stands at 55%, deducting 55p from the maximum payment for every £1 earned. Some individuals are entitled to a “work allowance,” allowing them to earn a set amount before their Universal Credit is reduced. The work allowance amounts to £411 per month if housing costs are included and £684 per month without housing assistance.
Additional elements and deductions for Universal Credit payments are detailed on GOV.UK.