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Universal Credit

Question for Department for Work and Pensions

UIN 51631, tabled on 20 September 2021

To ask the Secretary of State for Work and Pensions, pursuant to the Answer of 16 September 2021 to Question 48169 on universal credit, if she will revise the calculations for the National Living Wage to include the taper rate.

This answer is the replacement for a previous holding answer.

Answered on

28 September 2021

The National Living Wage and National Minimum Wage are set annually on the basis of recommendations from the independent Low Pay Commission, an independent body of employers, unions and experts.

On 1 April 2021, following the recommendations of the Low Pay Commission, workers on the National Living Wage saw a 2.2% pay increase to £8.91 an hour. The April 2021 increase in the National Living Wage represents an increase of over £345 to the annual gross earnings of a full-time worker on the National Living Wage, equivalent to a total increase in annual gross earnings of around £4,030 since the introduction of the National Living Wage in April 2016.

The Government is committed to raising the National Living Wage through its long term target to reach two-thirds of median earnings, and extending to those aged 21 and over by 2024.

Universal Credit promotes work as an effective route out of poverty. The single universal credit taper means that as earnings increase, above any applicable work allowance, Universal Credit payments reduce by less than the earnings, meaning claimants can clearly understand the advantages of work.

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