Around 800 Orkney households to benefit from Budget Universal Credit announcement

Around 800 households in Orkney are set to benefit from the Chancellor’s Autumn Budget announcement on Wednesday 27 October in relation to the Universal Credit taper reduction.

This reduction from 63 per cent to 55 per cent means that anyone claiming Universal Credit who has a job will get to keep more of their earnings before it starts to affect the benefit.

William Moore, OIC Revenues and Benefits Manager, said: “If you think of the taper like this - for every £1 you earn above the minimum, the Government will now deduct 55p rather than 63p from your Universal Credit, so someone earning £100 in a month above their work allowance would now lose £55 from their monthly Universal Credit claim, compared to £63 now. The Chancellor Rishi Sunak said the change would be brought in during the 'coming weeks', but no later than 1 December.

“Unfortunately, that is not the end of the story. We feel it is important to point out that any increases in Universal Credit would mean a corresponding reduction in Council Tax reduction for those who are getting it – so in effect more Council Tax to pay. This should correlate automatically via our systems when the Universal Credit taper changes. However, the Council Tax reduction should be less than the Universal Credit being gained so, overall, people should still have more money in their pocket so to speak.”

Contact the OIC Benefits Team by email, call 873535 ext 2116, or speak to your normal Universal Credit advisor for questions about the benefit changes.

Universal Credit is a benefit for working-age people, which helps with living costs and is often claimed by those who are on low incomes, out of work or cannot work. The payment counts almost 40 per cent of its recipients as being in employment. It was introduced in 2013 in an attempt to simplify the welfare system by merging six benefits into one payment.

The replaced benefits were:

• income support
• income-based jobseeker's allowance (except for some people with severe disabilities)
• income-related employment and support allowance
• housing benefit
• child tax credit
• working tax credit

A single universal credit payment is paid directly into claimants' bank accounts.

The payment will take into account: your earnings if you are in work, your partner’s earnings if they are working and any other household income.

Where can I get financial advice and help if I am struggling?

• Check your benefits are being calculated correctly. Use a benefits calculator to make sure you're getting everything you are entitled to.
• The Citizens Advice Bureau offers free financial advice