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Universal Credit: Wales

Question for Department for Work and Pensions

UIN 113159, tabled on 27 January 2022

To ask the Secretary of State for Work and Pensions, what discussions she has had with the Welsh Government on the effect on universal credit claimants of the Welsh Government's NHS and Social care Financial Recognition payment being classed as salary.

Answered on

1 February 2022

Following the announcement of their intention to provide financial recognition for NHS and Social Care staff, we corresponded with the Welsh Government to explain that as the tax system treats such payments as earnings, it follows that DWP would treat them in the same way. There have been no further discussions.

The £500 payments to health and social care workers you refer to are classed as earnings within the Income Tax (Earnings and Pensions) Act 2003, so are treated as earnings for the purposes of calculating entitlement to Universal Credit. To ensure consistency with the approach taken across different forms of earnings and Covid-19 financial support, the UK Government does not believe there is a case for disregarding these payments from benefit calculations. They are therefore subject to the Universal Credit taper rate of 55%, unless the earnings form part of the work allowance, which is the amount someone can earn before the taper is applied to their earnings.

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