Minimum income floor (MIF)
The purpose of the MIF is to set a threshold of deemed income for the purposes of calculating a claimant’s award. This usually prevents significant increases in credits where self-employed income decreases.
During the pandemic, the MIF was suspended, allowing greater claims for those particularly affected by the global recession. From 1 August 2021, the MIF commenced a gradual reintroduction, extended to 12 months with the possibility of a further six months if still affected by COVID-19.
Taper rate reduction
The taper rate will be reduced from 63% to 55%. This means that claimants who earn over the work allowance (which is to be increased by £500 per year) will be able to retain more of their universal credit claim than before. In practice, a claimant will retain an extra 8p of their credit in each pound they earn above £550 per month.
Surplus income threshold frozen
For one year from 1 April 2022, the surplus earnings threshold will be frozen at £2,500, contrary to the previous announcement of a reduction to £300. This means that