Three Universal Credit Changes Coming Next Year and How They Affect Your Payments
THE government will make three major changes to universal credit over the next year that will affect the amount paid to applicants.
The number of people in the UK claiming the benefit doubled during the pandemic, from 3 million in March 2020 to 6 million in January this year.
Chancellor Rishi Sunak responded to the increase by introducing an increase of £ 20 per week for all applicants.
But this additional support and other big changes to increase benefits are expected to take place over the next year.
Here we show you three big upcoming changes to universal credit and it will affect your payments.
Minimum income floor restored – August 2021
The government plans to reintroduce the universal credit minimum income floor in August, ending an increase in benefits for workers.
It was temporarily phased out in March 2020 as part of the coronavirus emergency budget.
The suspension was intended to help independent universal credit applicants who reportedly lost income due to self-isolation or restrictions on trade during the pandemic.
Since the income floor was suspended, those earning less than the minimum wage receive additional benefits.
How can I apply for universal credit?
HERE’S everything you need to know about applying for universal credit.
You will need to register for the new social protection system via the gov.uk site, starting by creating an online account.
To create an account, you will need an email address and a phone number.
After that, you will need to answer a series of questions about your current situation, known as the “to-do list”.
These include the date you received the last payment for a job, your household income, and how many people are financially dependent on you.
If you have lost your job, Citizens Advice recommends that you do not apply until you have received your last salary or vacation pay.
This is because any money you receive after applying for universal credit will be considered income and will mean you are entitled to less on your first payment.
You will then need to confirm your identity online.
In some circumstances, you may be able to apply by phone, such as those who do not have regular internet access, are visually impaired, or have a physical condition that prevents you from using a computer or smartphone.
To do this, you will need to contact the Universal Credit helpline to ask if you can apply over the phone or arrange a home visit.
In this case, someone can call them on your behalf if you cannot do it yourself.
But it will be reinstated next month as the government cancels financial support linked to Covid despite the delay in easing lockdown restrictions.
According to the charity Turn2us, the average reduction in benefits for each worker could be around £ 3,200 per year.
Sara Willcocks, Head of External Affairs at Turn2us, said: “Self-employed workers have been hit hard by the pandemic, and the suspension of the minimum income floor was a small but vital step in helping this group of workers stay afloat.
“But we must remember that the minimum income floor is just another arbitrary ceiling on benefits that breaks the link between need and entitlement.
“Now is not the time to cut people’s incomes. We urge the government to maintain the suspension of the minimum income floor, otherwise we risk increasing poverty this winter.”
End of £ 20 increase – October 2021
Sunak first announced the increase in benefits, worth £ 1,040 a year, to help Britain’s poorest families get through the coronavirus crisis.
The Sun wants to make universal credit work
The UNIVERSAL Credit replaces six services with a single monthly payment.
But there are big problems – it takes five weeks to get the first payment and that leaves some families worse off than thousands of pounds a year.
And while working Brits can claim up to 85% of their childcare costs, they need to find the money to pay for childcare up front. We have heard of families who wait up to six months for money.
Parents who work across the country have told us they haven’t been able to take on more hours – or have even turned down better-paying jobs or more hours because of how much they get from their benefits.
The severe taper rate also makes it difficult for Brits to get back to work.
It’s time to make universal credit work. Since December 2018, we have been calling on the government to:
- Get paid faster: The government must cut Britons’ wait times for their first universal credit payments from five to two weeks, helping keep millions out of debt.
- Keep more of what you earn: The work allowance should be increased and the reduction rate should be reduced from 63p to 50p, helping at least 4 million families.
- Don’t be punished for having a family: Parents should get the 85% of the money they can claim for child care up front instead of being paid in arrears.
Together, these changes will help make universal credit work.
The increase in payments applies to all new and existing universal credit applicants.
The additional support was supposed to be withdrawn on March 31, but Sunak extended it until the end of September in its latest budget.
Campaign groups, such as Citizens Advice, Turn2Us and Stepchange, have called for the £ 20 increase to be made permanent.
But this week, Welfare Minister Will Quince confirmed that his “expectation” is that the boost “will end once our economy opens.”
Speaking in the House of Commons, he said estimates that the £ 20 cut would push thousands of families below the poverty line were “purely speculative”.
Quince said: “Projecting the impact of an individual policy on poverty levels is complex and inherently speculative.
“It is difficult to isolate the specific impact of a policy and determine its effect on the number of people who fall below the poverty line, which itself changes over time.”
This comes despite the increase being described as a “lifeline” for families in difficulty.
Turn2Us said suppressing the uprising could see 500,000 people “trapped in poverty overnight.”
What to do if you have problems claiming universal credit
If you’re having trouble applying for your Universal Credit, or if the payments just don’t cover the fees, here are your options:
- Request an advance – Applicants can get cash within five days rather than waiting weeks for their first payment. But this is a loan which means that the repayments will be automatically deducted from your future Universal Credit payment.
- Alternative payment methods – If you are behind on rent, you or your landlord may be able to request an APP that will send your payment directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split payments if you’re in a couple.
- Budget advance – You may be able to get help from the government for emergency cleaning costs of up to £ 348 if you are single, £ 464 if you are in a couple or £ 812 if you have children. These are only in cases such as your stove breaking down or to help you find a job. You will need to repay the advance through your regular Universal Credit payments. You will still have to repay the loan, even if you stop applying for universal credit.
- Reduce your housing tax – You may be able to benefit from a reduction on your council tax by requesting a reduction in council tax. Alternatively, you may be eligible for discretionary housing payments to help cover your rent.
- Food banks – If you are really struggling and struggling to buy food and toiletries, you can find your local food bank who will provide help for free. You can find your nearest one on the Trussell Trust website.
Meanwhile, nearly half of adults on universal credit or tax credits fear the next £ 20 cut will affect their ability to feed themselves, his research shows.
Of the 5 million households benefiting from the Universal Credit and 1 million benefiting from the Labor Tax Credit, 44% will have difficulty paying their bills.
One in three respondents said they did not know whether they will be able to continue paying their rent or mortgage without an increase.
The withdrawal of support is expected to push 20% of applicants into debt, according to the charity.
MPs also urged the government to maintain the extra payment of £ 20 per week.
Extension of the Universal Credit surplus threshold – April 2022
Universal credit applicants will continue to earn the higher excess income threshold of £ 2,500 until April 2022, Sunak confirmed in his budget.
After this time it will be reduced to £ 300.
The excess income is taken into account in your next monthly assessment period for Universal Credit.
For example, if your monthly income exceeds the point at which your payment stopped (the current threshold) by more than £ 2,500, it becomes “excess income”.
These surpluses are then carried over to the following month where they are counted in your earnings.
If your regular income and surpluses are then still greater than the amount at which your payment stops, your Universal Credit payment will be affected.
Because when payments are cut, we’ve rounded up seven more ways to get help paying the bills.
The universal credit workers tax should be reduced to help struggling Britons find jobs, a new think tank report has said.
Meanwhile, the Sun’s campaign, Make Universal Credit Work, calls on applicants to get paid faster, not be punished for having a family, and to keep more of their income.