Roundup of DWP’s Budget announcements
On Wednesday 27 October the Chancellor delivered the Autumn Budget and Spending Review for 2021, setting out how we will level up opportunities as we build back better from the pandemic. Here are some key points of interest:
Cut to the Universal Credit taper rate, and Universal Credit Work Allowance increased
The taper rate means that if people increase their earnings, by working more hours for example, their Universal Credit is gradually reduced. The current taper rate is 63p, meaning for every £1 a person earns after tax, their Universal Credit is reduced by 63p.
The Chancellor announced that the Government is cutting the taper rate by 8p, from 63p to 55p, ensuring more money in people’s pockets.
The Work Allowance allows some households to earn a set amount before the taper rate kicks in. This is generally for households on Universal Credit who are in work and either looking after a child or have a household member with limited capability for work.
Work Allowances are currently set at £293 a month if the household receives housing support, or £515 if they do not receive housing support. These are both being increased by £500 per year.
Both of these changes will be implemented from December 2021, and together will benefit 1.9 million households who will on average keep around an extra £1,000 a year. The changes apply across Great Britain, and the Northern Ireland Executive will be funded to match them.
If you provide benefits advice or offer benefit calculators on your website, we encourage you to update your advice by 1 December to reflect these changes.
UK Shared Prosperity Fund
The UK Shared Prosperity Fund (UKSPF), worth over £2.6 billion, will give funding to local areas to help people get better skills and to get on in life. The fund will help people access opportunity in places in need, such as ex-industrial areas, deprived towns and rural and coastal communities.
The first priority for the UKSPF will be boosting skills through a locally-delivered new adult numeracy programme called Multiply. This will receive £560m between 2021-24 to help hundreds of thousands of adults across the UK improve their maths. It will also support a wider range of local priority programmes.
The UKSPF will at a minimum match the size of EU Funds received previously in all nations, each year. The Government will also match current EU funding levels in Cornwall.
Further details will be set out later this year.
Supporting disabled people into work
To support disabled people into work, the Government confirmed as part of the Spending Review that it is providing specialised disability employment support worth over £1.1bn over the next three years, including an additional £156m over the SR period for health and disability support with a focus on additional work coaches.
This is alongside the Work and Health Programme which will continue to provide personal support to disabled people to find jobs that match their employment and health needs, and the Access to Work scheme which will continue to help cover the costs of workplace adaptations, special equipment and travel.
Helping people into work and making work pay
The Government is increasing the National Living Wage from £8.91 per hour to £9.50 per hour from April 2022 for over 23s.
The Government will also continue supporting people into work with over £6 billion of funding for DWP over the next three years to help people earn more and gain the right skills. There will be targeted additional support for groups needing extra help to get into work and progress. This includes the following:
- workers who have left the furlough scheme and are making a UC claim who will be prioritised through the Job Finding Support scheme. They will receive online, tailored, one-to-one support, recruitment advice from a skilled adviser, support with CVs and a mock interview.
older workers – those over 50 – will benefit from additional support, including better information and guidance on later life planning, and help to plan their career and remain in work. For those who have lost their jobs, this funding will ensure that older job seekers on Universal Credit receive more intensive, tailored support.
Read the full Autumn Budget and Spending Review details.