THE government is bringing in three major changes to Universal Credit in the next year that will affect the amount claimants are paid.
The number of people in the UK claiming the benefit doubled during the pandemic from 3million in March 2020 to 6million in January this year.
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Chancellor Rishi Sunak responded to the surge by introducing a £20 a week uplift for all claimants.
But this extra support and other big changes to benefit boosts are set to take place over the next year.
Here we take you through three big upcoming changes to Universal Credit and this will affect your payments.
Minimum Income Floor reinstated – August 2021
The government is planning to reintroduce the Universal Credit minimum income floor in August, ending a benefits boost for workers.
It was temporarily removed in March 2020 as part of the emergency coronavirus budget.
The suspension was to help self-employed Universal Credit claimants who would have lost income due to self-isolation or restrictions on trading in the pandemic.
Since the minimum floor income was suspended, those earning less than the minimum wage have been receiving extra benefits.
How do I apply for Universal Credit?
HERE’S all you need to know about applying for Universal Credit.
You’ll need to apply to the new welfare system via the gov.uk website, starting by setting up an online account.
To make an account, you’ll need an email address and a phone number.
After that, you’ll need to answer a set of questions about your current circumstances, known as your “to do list”.
These include things like when you last received payment for a job, what your household income is and how many people depend on you financially.
If you’ve lost your job, Citizens Advice recommends that you don’t apply until you’ve received your final wages or any final holiday pay.
This is because any money you receive after you’ve applied for Universal Credit will count as income and mean that you’re entitled to less in your first payment.
You will then need to confirm your identity online.
In certain circumstances, you’ll be able to apply over the phone, such as those who don’t have regular access to the internet, are visually impaired, or have a physical condition that stops you from using a computer or smartphone.
To do this, you will need to contact the Universal Credit helpline to ask if you can apply by phone or arrange a home visit.
In this case, someone can call them on your behalf if you can’t do it yourself.
But it will be reinstated next month as the government rolls back Covid-related financial support despite the delay to easing lockdown restrictions.
According to poverty charity Turn2us, the average cut to each worker’s benefit could be around £3,200 a year.
Sara Willcocks, head of external affairs at Turn2us, said: “Self-employed people have been hit hard by the pandemic, and the suspension of the minimum income floor was a small but vital step in helping this group of workers stay afloat.
“But we must remember that the minimum income floor is just another arbitrary benefit cap that breaks the link between need and entitlement.
“Now is not the time to be cutting people’s income. We urge the government to keep the minimum income floor suspension, otherwise we risk seeing an increase in poverty this winter.”
End to the £20 uplift – October 2021
Sunak first announced the benefit uplift, which is worth £1,040 a year, to help Britain’s poorest families through the coronavirus crisis.
The Sun wants to Make Universal Credit Work
UNIVERSAL Credit replaces six benefits with a single monthly payment.
But there are big problems – it takes five weeks to get the first payment and this leaves some families worse off by thousands of pounds a year.
And while working Brits can claim back up to 85% of their childcare costs, they must find the money to pay for childcare upfront. We’ve heard of families waiting up to six months for the money.
Working parents across the country told us they’ve been unable to take on more hours – or have even turned down better paid jobs or more hours because of the amount they get their benefits cut.
The harsh taper rate also makes it hard for Brits to get back to work.
It’s time to Make Universal Credit work. Since December 2018, we’ve been calling for the government to:
- Get paid faster: The government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop millions from being pushed into debt.
- Keep more of what you earn: The work allowance should be increased and the taper rate should be slashed from from 63p to 50p, helping at least 4million families.
- Don’t get punished for having a family: Parents should get the 85% of the money they can claim for childcare upfront instead of being paid in arrears.
Together, these changes will help Make Universal Credit Work.
Join our Universal Credit Facebook group or email [email protected] to share your story.
The increase in payments applies to all new and existing Universal Credit claimants.
The extra support was meant to be withdrawn on March 31, but Sunak extended it until the end of September in his latest Budget.
Campaign groups, such as Citizens Advice, Turn2Us and Stepchange, have been calling for the £20 uplift to be made permanent.
But this week, the minister for welfare delivery Will Quince confirmed his “expectation” is that the boost “will end once our economy has opened”.
Speaking in the House of Commons, he said estimates that the £20 cut will push thousands of families below the poverty line were “purely speculative”.
Quince said: “Projecting the impact of an individual policy on poverty levels is complex and inherently speculative.
“It is difficult to isolate the specific impact of one policy and determine its effect on how many people fall below the poverty threshold, which itself changes over time.”
This comes despite the increase being described as a “lifeline” for struggling families.
Turn2Us said the removal of uplift could see 500,000 people “pulled into poverty overnight”.
What to do if you have problems claiming Universal Credit
IF you’re experiencing trouble applying for your Universal Credit, or the payments just don’t cover costs, here are your options:
- Apply for an advance – Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it’s a loan which means the repayments will be automatically deducted from your future Universal Credit payout.
- Alternative Payment Arrangements – If you’re falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you’re part of a couple.
- Budgeting Advance – You may be able to get help from the Government for emergency household costs of up to £348 if you’re single, £464 if you’re part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You’ll have to repay the advance through your regular Universal Credit payments. You’ll still have to repay the loan, even if you stop claiming for Universal Credit.
- Cut your Council Tax – You might be able to get a discount on your Council Tax by applying for a Council Tax Reduction. Alternatively, you might be entitled to Discretionary Housing Payments to help cover your rent.
- Foodbanks – If you’re really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the Trussell Trust website.
Meanwhile, almost half of adults on Universal Credit or Tax Credits are worried that the upcoming £20 cut will affect their ability to afford food, according to its research.
Of the 5million households on Universal Credit and 1million on working tax credits, 44% will struggle to pay bills.
One in three said they don’t know if they will be able to continue to pay their rent or mortgage without the uplift.
Pulling the support is expected to push 20% of claimants into debt, according to the charity.
MPs have also urged the government to continue with the extra £20 a week payment.
Universal Credit surplus earnings threshold extended – April 2022
Universal Credit claimants will continue to get the higher surplus earnings threshold of £2,500 until April 2022, Sunak confirmed in his Budget.
After this time, it will be reduced to £300.
Surplus earnings are taken into account in your next monthly assessment period for Universal Credit.
For example, if your monthly earnings are more than £2,500 over where your payment stopped – the current threshold – this becomes “surplus earnings”.
These surplus earnings are then carried forward to the following month, where they count towards your earnings.
If your regular income and surplus earnings are then still over the amount where your payment stops, your Universal Credit payment will be affected.
For when payments are cut, we’ve put together a round-up of seven other ways to get help paying bills.
Universal Credit’s tax on workers should be cut to help struggling Brits back into employment, a new think tank report has said.
Meanwhile, The Sun’s campaign Make Universal Credit Work is calling for claimants to get paid faster, not be punished for having a family and keep more of their earnings.
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