The Autumn Statement

The Chancellor of the Exchequer, Philip Hammond, has today (8 September 2016) announced that he will present his first Autumn Statement to Parliament on 23 November 2016.

The Autumn Statement is based on the latest forecasts from the Office for Budget Responsibility for the economy and public finances.

Key Points

• Earnings Taper to drop from 65p to 63p
• Means claimants can keep slightly more of the money they earn over the earning threshold of £192 per month (£397 if receiving housing help)

Earnings Taper for Universal Credit

What the Earnings Taper is and how this affects Universal Credit?

The Earnings Taper is a reduction to your Universal Credit based on your earned income. The taper rate is to drop to 63%. This means for every pound you earn over the Work Allowance (if you are eligible for one) you will keep 35 pence.

To work out the taper that applies to your award, Universal Credit will:

Take your total monthly earnings figure after tax, National Insurance and relevant pension contributions have been taken off.

Deduct your monthly Work Allowance (if you are eligible for one), which is the amount you can earn without your benefit being affected.

Apply the taper rate by multiplying the balance by 0.65.

This is the amount that will be taken from your Universal Credit maximum amount when calculating your award.

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Note: According to the Child Poverty Action Group

The Treasury is briefing that a single parent with one child and no housing costs working 15 hours a week will gain £170 per year from the lower Universal Credit ‘taper rate’ announced today, but in reality today’s announcement simply means this lone parent will lose £3000 a year, rather than £3,170 a year, as a result of the substantial package of cuts announced in the Summer 2015 Budget.

Responding to the Autumn Statement, Alison Garnham, Chief Executive, Child Poverty Action Group, said:

“For all the talk, this was a rescue package for ‘just managing’ families that failed to turn up.  That’s hugely disappointing for those of us who felt that the Prime Minister was going to take robust action to help hard up families.  The Chancellor applied a sticking plaster to family budgets haemorrhaging losses imposed on them by his predecessor’s budgets.  

“The Prime Minister knows the country isn’t working for just managing families.  These families have been left worse off and horribly exposed to rising prices. So it was surprising and disappointing that today the Government chose the better off and businesses, rather than ’just managing’ families, when it chose to spend billions on raising personal tax allowances and cutting corporation tax.

“The rhetoric on just managing families will end up being meaningless if the Government intends on largely persisting with policies that will tip the just managing into hardship and more children into poverty