We all welcomed the £20 weekly increase in payments for those claiming Universal Credit (and Working Tax Credit) introduced by the government at the start of lockdown last year - this was initially set to be in place for a year. However in his Spring Budget on 3rd March 2021, Rishi Sunak announced that the £20 increase in UC would remain in place for a further six months, until the end of September 2021 (with WTC claimants receiving a £500 lump sum payment). When will UC claimants first see the drop?
Despite calls for a further extension it is looking like this lifeline - that has helped so many - will be removed as planned, meaning that the majority of Universal Credit claimants will then see a reduction in their Standard Allowance of £20 per week (£86.67 per month) from October 2021.
From the Monthly Assessment Period (MAP) which ends on or after 6th October 2021 claimants' UC awards will include the normal, lower, standard allowance of:
£257.33 - single claimant under 25
£324.84 - single claimant age 25+
£403.93 - couple both under 25
£509.91 - couple one or both age 25+.
Any MAP which ends on or before 5th October should still include the higher amount.
Are claimants being warned?
The DWP is now notifying claimants through their UC journals about when their UC will reduce. See our new Hot Topic for further details.
ImpactAlthough provided as a safety net and aimed to 'make work pay', recent research has shown that even Universal Credit claimants who have jobs are falling into poverty - with in-work poverty being at a record high. And one in six working households were living below the breadline just before the pandemic.
Anti-poverty campaigners and MPs have said that the extension should stay and it comes at a time when many will face other pressures. Even former Conservative welfare ministers have written to the Chancellor urging him to make the £20 increase permanent to avoid sending families into financial crisis.Many organisations are campaigning for the uplift to be left in place permanently - on the grounds that people were already struggling before the Coronavirus pandemic.
In last month's newsletter, we highlighted the Joseph Rowntree Foundation's 'Keep the Lifeline' campaign - one of many putting pressure on the government to keep the uplift. They are encouraging as many people as possible to write to their MPs.
They have produced template letters for:
- UC claimants - click here
- ESA, JSA & IS claimants - click here
- People who are not directly affected by the cut but are concerned about the impact it would have on people they know or wider society - click here
The amount of a Third Party Deduction taken from a claimant's UC award for certain debts - including rent - is based on a % of their Standard Allowance. So when the £20 uplift is removed, this will mean the amount of any Third Party Deductions will also drop.