UNIVERSAL Credit payments are a welcome relief for hardened Britons – but many continue to struggle.
Benefits have been frozen for five years, with 2.5 million people needing UC to survive.
Has universal credit increased?
Fortunately for these 2.5 million households benefiting from universal credit and inherited benefits, yes.
The five-year freeze ended Wednesday April 1.
Inherited benefits are social assistance payments received by struggling households before the launch of universal credit.
The increase was announced in October, following the release of September inflation figures which are used to calculate benefit increases.
However, that’s not all, as additional measures against coronaviruses to help struggling families stay afloat during the lockdown came into effect on Monday, April 6.
Chancellor Rishi Sunak introduced a number of temporary measures as part of his budget last month, seeing an additional £ 20 per week added to payments in addition to last week’s increase.
The changes include increases to the standard allocation of universal credit and labor tax credits, as well as a suspension of the minimum income for universal credit.
Chancellor Rishi Sunak says that four million vulnerable households will benefit from Monday’s changes, below we explain everything you need to know.
How the changes affect you
Flat-rate deduction and tax credits for employment
The standard allowance – the amount everyone is entitled to if they are accepted on universal credit – has increased by about £ 20 per week for the next 12 months, adding £ 1,000 over the year.
The DWP reports that the standard rate has been increased by £ 86.67 per month in addition to the planned annual increase.
This means that applicants can earn up to £ 1,040, but the exact amount you will get depends on your personal circumstances.
Before the increase in coronaviruses, the standard universal credit allowance varied between £ 251.77 and £ 498.89 depending on your age and whether you were part of a couple or not.
Now the standard allowance is:
- Single, under 25 – increased from £ 251.77 to £ 342.72 (or £ 4,112.64 per year)
- Single, 25 or over – increased from £ 317.82 to £ 409.89 (or £ 4,918.68 per year)
- Couple, joint applicants under 25 – increased from £ 395.20 to £ 488.59 (equivalent to £ 5,863.08 per year)
- Couple, joint applicants, one or both of 25 years or more – increased from £ 498.89 to £ 594.04 (equivalent to £ 7,128.48 per year)
The usage tax credit was also increased by the same amount, in addition to the inflation-related increase.
The basic amount of the work tax credit was £ 1,960 per year, but it has increased to £ 3,040 for the next 12 months.
You may be able to get some extra money on top of that, depending on your circumstances and income, but that’s just the basics that got an extra boost from the government.
Still, the DWP says the increase could mean up to an additional £ 20 per week.
The amounts raised should have been activated automatically for all eligible people, which means that you should do nothing if you are entitled to more money.
It will also apply to new and existing applicants for 12 months.
Minimum Income Floor (MIF)
The temporary removal of the universal minimum income (MIF) floor helps self-employed workers who lose their income either by self-isolation or by foreclosure.
Universal credit is calculated for the self-employed whose business has been in existence for more than 12 months by predicting what they can earn. This is called MIF.
This is done by multiplying the national minimum wage by the number of hours you have agreed to work.
How do these benefits currently work?
Universal credit replaces six benefits – including the tax credit for work and housing – with a monthly payment.
You may be eligible if you are on low income or unemployed, which is why the government is suggesting that those who have been forced to quit their jobs because of a coronavirus should apply for it.
You get your standard allowance, plus possibly a supplement if you have children, a disability or a health problem, or if you take care of a disabled person.
The tax credit for work, on the other hand, depends on the hours of paid work you work each week, as well as on your income and your situation.
Again, you can then get additional “items” depending on whether you are in a relationship, if you have children, have a disability and how many hours you work.
How can I apply for universal credit?
JobCentre phone lines are currently very busy, so new applicants are asked to apply for universal credit online.
You can do this on the GOV website – you will need information about your income, your housing situation and proof of your identity.
We’ve told you the best time to ask for universal credit when it’s the quietest online.
Since the tax credit for work has been mainly replaced by the universal credit, you can only reapply if you receive a severe disability premium.
Find out more information on the GOV website.
What To Do If You Are Having Problems Applying For Universal Credit
If you’re having trouble applying for your universal credit, or if the payments just don’t cover the costs, here are your options:
- Request advance – Applicants can get cash within five days rather than waiting weeks for their first payment. But it 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 APA that will receive your payment directly from your landlord. You may also be able to change your payments to get them more frequently, or you can split the payments if you are a couple.
- Budget advance – You may be able to get help from the government to cover emergency cleaning costs up to £ 348 if you are single, £ 464 if you are a couple or £ 812 if you have children . These are only in cases like your stove down or to get 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 municipal tax – You may be able to get a discount on your housing tax or be eligible for discretionary housing payments if your current payments aren’t enough to cover your rent.
- Food Banks – If you’re 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.
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You can use a free calculator to help you figure out how much you will get with universal credit or the benefits after the coronavirus redesign.
Many mortgage lenders, for example, offer payment holidays while some banks offer larger overdrafts.
You should also consider turning to a free help organization such as Citizens Advice or StepChange.