Universal Credit taper rate cut to benefit thousands in Mansfield and Ashfield

Thousands of working Universal Credit claimants in Mansfield and Ashfield will be able to keep more of the benefit as part of a major tax cut, figures suggest.

By Katie Williams
Tuesday, 2nd November 2021, 8:37 am

Chancellor Rishi Sunak announced in his latest Budget that the taper rate, the tax on a claimant's payment for every £1 they earn above their work allowance, will be cut from 63 per cent to 55 per cent.

Department for Work and Pensions data shows 42 per cent of the 10,743 Universal Credit claimants across Mansfield were in work as of August 12 – the latest available figures.

It means the tax burden on 4,461 claimants in the area will be eased when the move comes into effect.

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Chancellor Rishi Sunak with his Budget Box ahead of presenting his Autumn Budget and Spending Review to Parliament.

In Ashfield, 41 per cent of the 11,323 UC claimants were in work, meaning the burden on 4,642 will be eased.

Mr Sunak has faced criticism the cut does not compensate for last month’s £20-a-week reduction in UC, or help people not in work.

In Mansfield, about 6,300 UC claimants were not in work as of August 12, compared with 6,700 in Ashfield.

Announcing the changes, Mr Sunak said: “This is a £2 billion tax cut for the lowest paid workers.

“It supports working families, helps with the cost of living and rewards work.”

He said the changes mean nearly two million families across the UK will keep, on average, an extra £1,000 a year.

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Rising cost of living

However, Labour’s shadow chancellor Rachel Reeves said ‘never has a Chancellor asked people to pay so much for so little’.

She said: “After taking £6bn out of the pockets of some of the poorest people in this country, he is expecting them to cheer at being given £2bn to compensate.”

Thomas Lawson, chief executive of anti-poverty charity Turn2us, said: “For single parents and others with caring responsibilities the benefits will be smaller, and for people unable to work at all, this will do nothing to help with the rising cost of living.”

The number of people on UC across Great Britain has risen substantially during the pandemic.

In March 2020, some 3m people were on the benefit, but by August 2021 the figure was 5.8m – a 93 per cent increase.

In Mansfield, the number of claimants rose by 91 per cent, from 5,623 in March 2020. In Ashfield, the number doubled, from 5,658.

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