CeMPA WP 1/24 UBI-eh? Strengthening minimum income guarantees, universality and

Table 1 shows both the estimated gross cost and the changes to income tax required to cover the cost in multiples of 0.2 percentage points in the basic rate and 0.4 in the higher and top rate. [...] Three individual reforms are sufficiently low in cost that they are closer to not requiring any tax changes than the minimum required tax change of 0.2 percentage points in the basic rate and 0.4 in the higher and top rate: the migration to Universal Credit, the removal of wealth and savings from the means test and the abolishing of the two-child limit in Universal Credit. [...] The two big-ticket items are the reduction of the taper rate to 40% and the increase in the standard allowance to £120 a week for singles and £200 a week for couples. [...] The reduction in the taper and the increase in Child Benefit have the most significant impact on the income of the median household and therefore increase elderly poverty the most, albeit still only 0.6 percentage points in the case of the former. [...] Although the standard allowance is seemingly targeted at supporting those on the lowest incomes, the nature of the taper in Universal Credit means that any increase in the standard allowance is felt by all recipients of the benefit further up the income spectrum.