Budget 2021: Rishi Sunak quizzed on universal credit on GMB
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Universal Credit provides assistance to individuals who are either out of work or on a low income. To be eligible for Universal Credit, a person must be 18 or over, or under state pension age. In addition, a person and their partner must have £16,000 or less in savings between them, and be resident in the UK.
The changes which will take place to Universal Credit are likely to affect significant numbers of people who make a claim, and therefore it is important to pay attention.
One major change occurring is the confirmed extension of the £20 uplift, which the Government has stated will ultimately come to an end.
Universal Credit was provided with an increased sum due to the impacts of COVID-19, however, the uplift was scheduled to come to a close in April 2021.
In the months leading up to the Budget, several organisations called for the uplift to be extended, or to be made permanent.
Chancellor Rishi Sunak took action in his economic statement, confirming the uplift would be extended.
The £20 weekly increase to Universal Credit payments will continue for a further six months to provide the support people need.
However, despite this extension, Mr Sunak stated the uplift would be cut from October 1, 2021.
Alistair Cromwell, Acting Chief Executive of Citizens Advice, commented on the matter.
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He said: “It will be a huge relief for people on Universal Credit to not face a cut to their benefits next month.
“But with a challenging recovery ahead of us, this is a stopgap.
“A six-month extension kicks the can down the road, only to leave millions facing financial cliff edge in the autumn.
“We urge the Government to think again. The Universal Credit uplift must be kept for at least a year to help people pick up the pieces from this crisis.”
To provide further support, the DWP has also confirmed a slight change to advance payments of Universal Credit.
Advance payments are intended to provide financial support to individuals who are waiting to get their first Universal Credit payment.
People will be able to request an upfront loan on their payment to help them during their wait.
While the advance must be repaid, the time to address this will also be changed.
The repayment period is due to increase from 12 months to 24 months, and deductions will be reduced from 30 percent to 25 percent of the standard allowance.
This change will kick in from April 2021, to offer further help to Universal Credit claimants.
Another change to Universal Credit which will take place is the minimum income floor (MIF) – which is a limit on how much self-employed people are able to claim.
MIF was suspended in 2020 due to the pandemic, however, it has been confirmed the policy will be reintroduced at the end of July.
Under MIF rules, DWP assessors consider those who are self-employed as though they earn minimum wage, even if they are in fact earning less than this.
The consequences of this are that once a person’s earnings dip below the so-called “floor”, then they will have their Universal Credit capped.
Finally, there is also a change which is set to occur when it comes to surplus earnings for Universal Credit.
At present, due to the pandemic, the threshold stands at £2,500 – and this has been confirmed to continue until April 2022.
However, from then on, the threshold will return to its previous £300 rate.
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