A MAJOR change to Universal Credit could see thousands of households have their payments cut.
The change will impact around 120,000 in receipt of the benefit.
1
This is because of a change to the Administrative Earnings Threshold – the amount of money you’re expected to earn if your Universal Credit rises.
The change means that many will have to look for or prepare for work if they want to carry on receiving help.
Previously, households on Universal Credit had to earn the equivalent of 12 hours’ pay a week, at the level of the National Living Wage, to not have to meet certain requirements.
But since January 30, the 12-hour threshold has increased to 15, meaning thousands need to earn more to be exempt from the requirements.
We spoke to Anna Stevenson, senior benefits specialist at Turn2us, who explained exactly how the increase to the Administrative Earnings Threshold works in practice.
Anna said: “Before, single people were expected to earn £494 per month to avoid having to have regular meetings at the Jobcentre and being expected to look for more hours or another job.
“That’s going up to £617 per month. For couples, joint earnings had to be £782 but now that’s going up to £988 per month.
“This will go up again, to £677 for single people, and £1,083 for couples, in line with increases to the national living wage in April.”
Most read in Money
If you’re asked to look for work and you don’t, or you miss meetings at the Jobcentre, you will be sanctioned, according to Anna.
This means that your Universal Credit will be reduced or, in some circumstances, could be stopped.
“You need to be checking your online Universal Credit journal at least twice a week to see if you’ve had any messages from the Department for Work and Pensions,” said Anna.
The move is likely to affect single parents and households with children the most because lots of people work fewer hours while their children are in school to fit around pick-up and drop-off times.
But Anna said it’s important to remember that Universal Credit can still help with the costs of childcare.
She said: “You can use the free, confidential Turn2us benefits calculator to check how increasing your hours and adding childcare costs will affect your benefit entitlement.”
Who is not affected by the change?
Anna said that if you’re a carer or have a disability that means you’re not expected to work there will be no change to your allowance.
This is also the case if you’re the main carer for a child under three.
Another exception is if you are over the state pension age, which is currently 66.
The rules can be complicated so it’s worth talking to your work coach who can help guide you on the change.
What help is there for people on Universal Credit?
There’s plenty of extra help on offer if you’re on Universal Credit.
The Department for Work and Pensions has announced millions will get a £900 cost of living payment over the next two years, including those on Universal Credit.
The payment is going to be split into three instalments.
You don’t have to apply for the payments as they will be made automatically into bank accounts.
There’s a host of freebies you can get if you receive Universal Credit as well.
This includes free or cheap broadband, through so-called social tariffs.
Plus, you can get free school meals, a discount on your council tax, cold weather payments and help with rent.
