Millions of individuals receiving Universal Credit will experience a delay in receiving their increased payments, despite the planned rate hike in April. The standard allowance for Universal Credit, which represents the base amount before any deductions or additional factors are considered, will see an inflation-adjusted increase starting April 13. Specifically, for single claimants over 25 years old, the monthly standard allowance will climb from £400.14 to £424.90. However, due to the arrears payment structure of Universal Credit, beneficiaries will not observe the payment raise until June.
The enhanced rates will only impact assessment periods for Universal Credit starting on or after April 13. Since Universal Credit payments are disbursed a week following the end of each assessment period, the new rates will not come into effect until June payments.
The assessment period determines the amount of Universal Credit individuals receive based on earnings or deductions during that timeframe. Universal Credit is utilized by nearly eight million people across the UK. Eligibility for Universal Credit is contingent upon various personal factors, including 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. The taper rate stands at 55%, meaning 55p is subtracted from the maximum Universal Credit payment for every £1 earned. Some individuals qualify for a “work allowance,” allowing them to earn a set amount before their Universal Credit is reduced. The work allowance is set at £411 per month for those receiving housing assistance and £684 per month for those without.
Additional elements and deductions for Universal Credit payments can be found on the GOV.UK website.