Salary Increase for Healthcare Workers using Universal Credit
Due to a wage raise and bonus, thousands of people on Universal Credit may see their benefits reduced or suspended entirely. In August, healthcare employees in Northern Ireland will get a £1,505 bonus in addition to a 5% wage increase this month.
However, although the salary increase is positive news for thousands of workers, Universal Credit recipients may not be so happy about it. This is because Universal Credit has a “taper rate” that decreases when you begin to generate income and is a means-tested benefit.
Following the salary increase, beneficiaries of the benefit would receive smaller payments, according to the agency for Communities, a devolved government agency in Northern Ireland.
“The Department has confirmed that a person’s amount of Universal Credit will be reduced if their earnings increase,” a Department for Communities official stated. “However, a person can earn a certain amount before their Universal Credit payments are reduced, for example they keep £0.45 of every £1 they earn.”
Healthcare workers will receive a “smack in the teeth” from the reductions in Universal Credit, according to Income Max benefits expert Lee Healey.
He continued: “If you earn more, the UC calculation reflects those changes in earnings. If you make fewer dollars, payments may increase. So the opposite is true. As always good money management is key; be on top of your finances, plan for fluctuations and changes in Universal Credit payments if your wages vary, and be prepared to adapt accordingly when things like bonuses or overtime hits your pay packet.”
Your Universal Credit payments are impacted by your pay
Being a means-tested payment, Universal Credit declines the more money you make. This is because the benefit is designed in a way that individuals are encouraged to return to work. The amount you receive from Universal Credit decreases by 55p for every £1 you make from employment. This is called the taper rate.
Certain individuals may also qualify for a “work allowance,” in which deductions are deferred until after a predetermined threshold is reached. In case you or your spouse have “limited capability for work” or are taking care of a child, you will receive a work allowance.
You may have limited capability for job if you need to take actions to obtain employment even though you are not now able to hunt for it. If you get assistance with housing costs, your Universal Credit work allowance is reduced. This implies that your claim to Universal Credit will decrease if your employer increases your wages due to the taper rate. It does, however, imply that your eligibility for Universal Credit may increase if you were to lose your employment and the money that came with it.
Given that your monthly wage determines how much Universal Credit you are eligible for, a one-time bonus may have a temporary effect on your eligibility the following month. If your salary stays the same, it should usually return to your former entitlement the next month.
Remember that you might not even be aware that you qualify for benefits like Universal Credit. According to recent data from Policy in Practice, millions of people have the opportunity to claim further assistance but aren’t doing so. Over the course of the previous fiscal year, a total of £23 billion went unclaimed, with £8.3 billion in Universal Credit being unclaimed.
On the website of the government, you can apply for benefits. Benefits offer more than simply more cash; a number can lead to other advantages. Individuals receiving Universal Credit are eligible for assistance with various costs, including as child care expenses and travel expenses.