In this series we aim to highlight specific parts of the universal credit that will hopefully prove useful to people applying for the Universal Credit in 2013.
We have decided to take a look at the annexes of the DWP document “Welfare that works”. In this profile we look at how the DWP envisages the treatment of earnings and income in respect of the Universal Credit.
In Universal Credit, different amounts will be disregarded from earnings before the taper applies in order to reflect the needs of different families and ensure that work pays. The amount to be disregarded will be reduced to reflect support people receive for rent or mortgage interest support.The actual disregard levels will be set closer to the date of implementation. We currently envisage maximum disregards (annual figures) of around:
couple: £3,000 plus £2,700 per household for a child (regardless of number of children); lone parent: £5,000 plus £2,700 per household for a child; and disabled people: £7,000 per household if a recipient or either partner in a couple is disabled.
The reduction for housing costs goes as far as a â€˜disregard floorâ€™. The annual amounts we have modelled are:
couple: £520 per household plus £520 for the first child, £260 for each of the second and third children; lone parent: £1,560 per household plus £520 for the first child, £260 for each of the second and third children; and disabled people: £2,080.
37 We envisage that disregards will be reduced by one-and-a-half times the recipientâ€™s eligible rent or mortgage interest
“We do not expect to include a disregard for a single person without children â€“ any earnings would be tapered off straight away.”
The above information is from the DWP “welfare that works” document and further worked examples can be found on the DWP website in the annexes