Although the higher Standard Allowance - that was introduced at the beginning of the Coronavirus outbreak in April 2020 - is continuing for Universal Credit claimants until September 2021, for Working Tax Credit claimants, the government has decided to award a one-off payment instead.
Eligibility for this £500 payment is based on eligibility for WTC on 2nd March 2021. This also includes those who are entitled to both Working Tax Credit and Child Tax Credit but they only receive Child Tax Credit because their earnings are too high for them to receive both.
There is no need to make an application for the £500 payment, as HMRC will contact claimants by text message or letter in April to confirm they are eligible. Payments should be received by 23rd April 2021.
Will the £500 payment affect HB?
As it is a one-off payment, it would not count as income for HB, but if the payment takes the claimant’s savings over £6000, they should notify the HB Office.
Could claimants get the £500 payment and then move onto UC instead and get the extra £20 pw on UC?
Once someone has received their £500 payment, there appears to be nothing at the moment to stop them from claiming UC instead – and getting the £20 per week uplift until September. But they should check first that UC is the best option for them.