“A tale of two-budgets to low-income families”: Campaigners claim that the Universal Credit rate cut is good news. This means 2m workers get more, but it’s bad news for those who are ‘living on the lowest benefits for 30+ years’.

  • Change to Universal Credit made to ‘soften blow’ of removal of £20 a week uplift 
  • However, those who cannot work or don’t earn enough will still be in worse shape
  • Campaigners claimed that the budget did not go far enough in order to protect the most vulnerable. 

Charities have described the Universal Credit changes as “the tales of two budgets for low-income families” and said that they do not go far enough in helping those who are disabled.

In his budget yesterday, Rishi Sunak announced a reduction from 63p in the pound to 55p in the universal credit taper rate – the amount in benefits a claimant loses for each pound they earn above a set work allowance.

The move was intended to soften the blow of the withdrawal of the £20-a-week uplift which was introduced during the pandemic.

Campaigners claim that while millions will be benefited by the change, at most two million people will not see any benefit because they are either unable or unable to work.

Charities branded the changes to Universal Credit by Rishi Sunak as 'the tale of two budgets for low income families' and said they do not go far enough to help those unable to work

Charities described the Universal Credit reforms by Rishi Sonak as “the tale of two Budgets for Low Income Families” and claimed that they don’t go far enough to help people who are unable or unwilling to work.

Katie Schmuecker, Deputy Director of Policy & Partnerships at Joseph Rowntree Foundation said: ‘This is a tale of two Budgets for families on low incomes.

“For those working, the changes to taper rate and work allowance along with the National Living Wage increases are very positive steps. They allow low-paid workers more of what they earn.

“But the truth is that millions of people who cannot work or are looking for work will not be able to benefit from these changes.


Who will be benefited by the Universal Credit changes?

Rishi Sunak announced  that the taper rate of UC will be cut by 8% ‘within weeks’, bringing it down from 63% to 55%.

The taper rate is the amount of benefit taken away from every £1 earned above the claimant’s work allowance – meaning claimants will now be able to keep an additional 8p per £1 of net income. The changes mean that nearly two million families will keep on average an extra £1,000 a year, Mr Sunak said.

The Treasury said that a single mother of two, aged over 25, working full-time and renting will save £100 a month and £1,200 a year. 

Meanwhile, a couple with two children, renting their home with one partner working full time and the other works 16 hours a week, will be £1,800 per year better off. 

However, campaigners say the change does not compensate for the removal of the £20-a-week UC – or do anything to help people who are not in work. 

The taper applies only to nearly two million families that receive universal credit. 

“The Chancellor’s decision not to acknowledge them as the cost rises risks increasing poverty among this group, who currently have the lowest main rate in real terms of out-of work support since around 1990.

“Cancer patients, people with disabilities, and people caring for elderly parents or young children are just a few of the people who cannot work in our society.

‘Their energy bills are rising as well as their weekly shopping, and they will face immediate hardship, hunger, debt, and other financial problems in the months ahead.

“The Chancellor had the opportunity to support families with the lowest incomes to weather any storm ahead, but he declined it.”

Michelle Wilson, a single mother living in Glenrothes, Scotland, stated to the BBC that she will not see any benefit as she is currently looking for employment.

Ms. Wilson worked as a Fife Council support officer, but she quit because she couldn’t afford childcare. 

She said: ‘It’s a real worry because the uplift was almost £100 a month, which is my main shop gone now, so it’s another big stress.

“My children have been eating healthier and I’m less worried about my fuel and gas bills. 

Meanwhile, Louise Rubin, head of policy at disability equality charity Scope, said: ‘The Budget does little to address the fears of many disabled people and families about their finances this winter.

“The greatest impact on disabled households will be the cut to Universal Credit, skyrocketing inflation, and spiralling energy prices.

“The Universal Credit taper rate was changed to make it more accessible for disabled workers. This is a small step forward.

“But the change won’t have any effect on people out-of-work. With the disability employment gap stuck at close to 30 per cent, it is disabled people who will continue to bear the brunt of the £20 Universal Credit cut.

Campaigners have said those who are unable to work or do not earn enough will still be worse off since the £20 a week uplift in Universal Credit was removed earlier this month

Campaigners have said those who are unable to work or do not earn enough will still be worse off since the £20 a week uplift in Universal Credit was removed earlier this month

‘We face a bleak winter of soaring prices and sky-high energy costs that come on the heels of a £20 cut to Universal Credit. The uplift was not available to those who were on legacy benefits.

‘Disabled people already face extra costs of £583 a month on average, and this is set to soar this winter.

“Levelling up does not mean anything if disabled persons are left behind.”

Sara Ogilvie, policy director at Child Poverty Action Group said the lower universal credit taper rate is ‘good news’ but added that there was ‘nothing for those who cannot work’.

She said that these people would still face the same cost pressures as other households, and will still have an unpaid debt after the universal credits cut.