Six Universal Credit and benefit Budget changes explained
RISHI Sunak outlined key changes for those who claim Universal Credit and other benefits in his Budget today.
The Chancellor confirmed he would be “extending support for the lowest paid and most vulnerable” including those who claim welfare payments.
Part of the help includes extending the Universal Credit £20 per week uplift that was due to finish at the end of March.
People who claim Working Tax Credits will also get financial help in the form of a one-off £500 benefit payment.
As of January 2021, six million Brits were on Universal Credit, up from 2.8million in the same month a year earlier, according to Government stats.
Here are six changes to benefits the Chancellor announced:
1. Universal Credit £20 boost extended
The Chancellor finally confirmed he would be extending the £20-a-week uplift to Universal Credit payments, in what has been described as a “lifeline” for families.
The measure works out at around £1,040 extra for households per year, although the support will only last another six months.
The Government had originally planned to scrap the boost from the end of this month.
Instead, claimants will now continue to get the extra cash until the autumn.
The boost comes on top of a planned benefits rise taking place in April.
2. Universal Credit surplus earnings threshold extended
Universal Credit claimants will continue to get the higher surplus earnings threshold of £2,500 until April 2022.
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.
3. Universal Credit MIF suspension extended
Mr Sunak confirmed he won't reinstate the Universal Credit minimum income floor until the end of July 2021.
It will gradually be reintroduced from August 2021, but Department for Work and Pensions coaches will be given discretion to not apply it on an individual basis.
The minimum income floor was originally meant to be reapplied from April 2021.
It's the amount you're thought to earn each month, and is used to work out how much Universal Credit you get on top of your earnings.
It applies to those who've been self-employed for more than a year.
4. Universal Credit loan repayment changes brought forward
The Chancellor confirmed he is bringing forward several changes to loan repayments, including how soon you have to pay back an advance.
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.
Deductions are currently capped at 30% of the standard allowance, but this will reduce to 25%.
The following measures will now come into force from April 2021 instead of October 2021.
5. One-off £500 payment for Working Tax Credit claimants
Brits who claim Working Tax Credits will get a one-off payment worth £500, in a move designed to echo the Universal Credit support.
The Chancellor said that because of the way that the Working Tax Credits system works, people will not be able to get the extra weekly £20.
Lots of people have been switched from Tax Credits to the newer Universal Credit system, which means they would already be getting the uplifts.
New benefits claimants are usually added to Universal Credit rather than Working Tax Credit - unless they are eligible for the severe disability premium.
But there are also plenty of people who are still on the old-style system.
There is no detail in the speech or the budget documents about how Working Tax Credits claimants can apply or when the money will be paid.
6. More people remain eligible for Working Tax Credit
The budget documents also confirm the government will continue
to treat Working Tax Credit claimants who have been furloughed, or experienced a temporary reduction in their working hours, as working their normal hours.
This allows these claimants to remain eligible for Working Tax Credit rather than losing the benefit because the pandemic has impacted their earnings.
The entitlement to working tax credits is usually based on you working a set number of hours.
In other news, Universal Credit claimants urged to claim council tax discounts "straight away".
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