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<p>Universal Credit, at the heart of our welfare reforms, aims to reduce the number
of workless households by reducing the financial and administrative barriers to work
that existed in the previous system of legacy benefits.</p><p> </p><p>In recent years
the Government has made significant investment to improve work incentives including:</p><p>o
the reduction in the UC taper rate from 65% to 63% in 2017; and.</p><p>o An extra
£1.7 billion a year put into UC work allowances for working parents and disabled claimants
to increase them by £1,000 a year from April 2019. Providing a boost to the incomes
of the lowest paid and resulting in 2.4 million families keeping an extra £630 per
year of what they earn.</p><p> </p><p>We have also taken a range of broader steps
to help families keep more of what they earn including another rise in the National
Living Wage to £8.21 and increasing a full-time worker’s annual pay by over £2,750
since its introduction. Tax changes have also made basic rate taxpayers over £1,200
better off since April, compared with 2010. The most recent changes mean that, from
April, a single person on the National Minimum Wage is taking home over £13,700 a
year after income tax and National Insurance – £4,500 more than in 2009/10. Additionally,
further help is being provided to working families by doubling free childcare to 30
hours a week for nearly 400,000 working parents of three and four-year-olds and introducing
Tax-Free Childcare, worth up to £2,000 per child per year;</p><p> </p><p>The Government
has no plans to remove sanctions but continue to monitor the operation of the policies
and processes to ensure the sanctions system remains clear, fair and effective in
promoting positive behaviours.</p><p> </p><p>The Government believes that these improvements
help people on UC to keep more of what they earn, support employment and help to make
work pay.</p>
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