UNIVERSAL Credit claimants will want to know about upcoming changes to the benefit in 2021, including new rates and rules.
It comes after a year where the benefits freeze, which had been in place since 2016, ended in April 2020.
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Universal Credit claimants have also had their payments boosted by £1,040 (£20 a week) due to the coronavirus crisis – but it’s unclear if this will continue.
In November, the Department for Work and Pensions (DWP) also closed a loophole, which prevented around 85,000 people on benefits from being left out of pocket if they were paid by their employer twice in a month.
If a worker receives two wage payments in the same month, the benefits system will now register one in the following assessment period.
As we near the end of what’s been a long year for many, what’s changing to Universal Credit in 2021? We explain all you need to know.
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 or be entitled to Discretionary Housing Payments if your existing ones aren’t enough to 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.
Decision on Universal Credit coronavirus boost
Households on Universal Credit currently get an extra £20 a week (£1,040 a year) in temporary support due to the pandemic.
The boost was rolled out as a temporary measure for 12 months in April, applying to all new and existing Universal Credit claimants.
More than 50 charities and groups have since urged Chancellor Rishi Sunak to extend the support, and a decision is expected next year.
The support means that for a single claimant, who’s 25 or older, the standard allowance rose from £317.82 to £409.89 per month in April 2020.
The standard allowance is the amount that everyone is entitled to if they’re accepted on Universal Credit.
If the support isn’t extended after April 2021, Universal Credit claimants will see their payments fall.
Payments to increase in April
In April 2021, Universal Credit payments will rise as follows for the 2021/2022 financial year.
How much you’re entitled to depends on your individual circumstances, including your age, whether you have any disability and if you have children or are a carer.
Standard allowance (per month)
- For those single and aged under 25, the standard allowance will rise from £256.05 to £257.33 (this is lower than the 2020 amount of £342.72, which includes the coronavirus boost)
- For those single and aged 25 or over, the standard allowance will rise from £323.22 to £324.84 (this is lower than the 2020 amount of £409.89, which includes the coronavirus boost)
- For joint claimants both under 25, the standard allowance will rise from £401.92 to £403.93 (this is is lower than the 2020 amount of£488.59, which includes the coronavirus boost)
- For joint claimants where one or both are 25 or over, the standard allowance will rise from £507.37 to £509.91 (this is lower than the 2020 amount of £594.04, which includes the coronavirus boost)
Extra amounts for children
- For those with a first child born before April 6, 2017, the extra amount is going up from £281.25 to £282.50
- For those with a child born on or after April 6, 2017 or second child and subsequent child, the extra amount is going up from £235.83 to £237.08
- For those with a disabled child, the lower rate addition payment is going up from £128.25 to £128.89 and the higher rate from £400.29 to £402.12
Extra amounts for limited capability for work
- For those deemed to have limited capability for work, the extra amount is going up from £128.25 to £128.89
- For those deemed to have limited capability for work or work-related activity, the extra amount is going up from £341.92 to £343.63
Extra amounts for being a carer
Universal Credit claimants can get an additional amount if you’re caring for a severely disabled person for at least 35 hours a week.
The amount you get a month will rise from £162.92 to £163.73.
Increased work allowance
- The higher work allowance (no housing amount) for someone claiming Universal Credit with one or more dependent children or limited capability for work is going up from £512 to £515
- The lower work allowance for someone claiming Universal Credit with one or more dependent children or limited capability for work is going up from £292 to £293
Changes to housing cost contributions in April
Non-dependants’ housing cost contributions are going up from £75.15 to £75.53.
These contributions are deductions taken from your Universal Credit housing element for adults who live with you on an informal basis.
For example, this could be a relative who doesn’t pay rent.
In most cases, the DWP expects a non-dependant adult household member to contribute to your rent.
Other deductions to go up in April
Amounts can be taken out of your Universal Credit to pay back debt in council tax, energy or water bills, rent, court fines, compensation orders, or child maintenance.
For third party deductions where 5% of the standard allowance is taken, the amount is going up as follows:
- For those who are single and under 25, the deduction is going up from £12.80 to £12.87
- For those who are single and aged 25 or over, the deduction is going up from £16.16 to £16.24
- For joint claimants both under 25, the deduction is going up from £20.10 to £20.20
- For joint claimants where one or both are 25 or over, the deduction is going up from £25.37 to £25.50
For deductions to repay rent and service charges where a minimum 10% of the standard allowance is taken up to a maximum of 20%, the amounts are going up as follows:
- For those who are single and under 25, the minimum deduction is going up from £25.61 to £25.73 and the maximum deduction is going up from £51.21 to £51.47
- For those who are single and aged 25 or over, the minimum deduction is going up from £32.32 to £32.48 and the maximum deduction is going up from £64.64 to £64.97
- For joint claimants both under 25, the minimum deduction is going up from £40.19 to £40.39 and the maximum deduction is going up from £80.38 to £80.79
- For joint claimants where one or both are 25 or over, the minimum deduction is going up from £50.74 to £50.99 and the maximum deduction is going up from to £101.47 to £101.98
Fraud overpayments, recoverable hardship payments and administrative penalties will go up as follows (30% of the standard allowance):
- For those who are single and under 25, the amount deducted is going up from £76.82 to £77.20
- For those who are single and aged 25 or over, the amount deducted is going up from £96.97 to £97.45
- For joint claimants both under 25, the amount deducted is going up from £120.58 to £121.18
- For joint claimants where one or both are 25 or over, the amount deducted is going up from £152.21 to £152.97
For other overpayments, and civil penalties, the amounts taken will go up as follows (15% of the standard allowance)
- For those who are single and under 25, the amount deducted is going up from £38.41 to £38.60
- For those who are single and aged 25 or over, the amount deducted is going up from £48.48 to £48.73
- For joint claimants both under 25, the amount deducted is going up from £60.29 to £60.59
- For joint claimants where one or both are 25 or over, the amount deducted is going up from £76.11 to £76.49
Loan repayment terms are changing in October
Struggling Brits starting a claim for Universal Credit can get advances to help them get by during the five-week wait for the first payment.
An advance is an upfront loan up to the value of the first Universal Credit amount a person is expected to receive.
Advances currently have to be paid back in instalments from future Universal Credit payments over the next 12 months – but that repayment period is set to increase to 24 months from October 2021.
Deductions are currently capped at 30% of the standard allowance, but this will reduce to 25% from the same month too.
However, in the meantime the 30% maximum deduction will go up in April to take account of the increase in Universal Credit.
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