Universal Credit cuts will affect 3mil children - What this means for you and your family
UNIVERSAL credit is a lifeline for many Brits but upcoming changes could affect your payments - leaving families out of pocket. How much is being cut?
Universal Credit: Thomas Hunt MP calls for ‘permanent’ uplift
Universal Credit has been essential for many Brits over the pandemic, thanks to the £20 uplift. However, the Government is making three major changes to Universal Credit this year which will affect the amounts claimants are paid. And with 1.8m households currently claiming Universal Credit, this change could affect 3.4m children.
This year the number of Britons claiming Universal Credit shot up as many couldn’t work or lost their jobs over the pandemic.
To combat this, a number of changes were introduced to Universal Credit to support families struggling during the pandemic.
These changes were brought in by Chancellor Rishi Sunak in his emergency coronavirus budget in March 2020.
As Britain moves out of the pandemic the Government is starting to roll back some of the extra financial support given over the past year.
READ MORE: New ‘minimum income’ benefit scheme could be coming to the UK
Universal Credit claimants doubled this year from 2million claiming the benefit in March 2020 to 6million in January 2021.
In a bid to help Brits out during the pandemic Universal Credit claimants were given an uplift of an extra £20 a week.
This boost will shortly be scrapped as it was only intended as a temporary measure during the pandemic.
When it is scrapped, figures show nearly three and a half million children will be affected.
Data has shown the reduction of UC will adversely impact 1.8 million households currently claiming the benefit.
According to the Department for Work and Pensions, these 1.8 million homes contain around 3.4 million children as of May 2021.
Dan Paskins, director of UK Impact at Save the Children, said: “These figures confirm that the Government’s scheduled cut to Universal Credit will affect nearly three-and-a-half million children.
“The £20 increase has been a lifeline for many families. Parents we work with tell us that they’re relying on the extra £20 per week to buy essentials like food and clothes for their children.
"Without it, we know that many more families will be pushed into the red.
“This is especially worrying since three-quarters of families with children on Universal Credit have a child under ten, and we know that living in poverty as a young child has lifelong impacts.”
Here are two other key changes you may need to watch out for this year.
Minimum Income Floor
If you are a freelancer or self-employed and your earnings are low, your benefit may be worked out on higher earnings than you have.
This is called the "minimum income floor".
It's worked out by multiplying the number of hours you agreed to work by the national minimum wage.
It was temporarily removed in March 2020 as part of the Chancellor’s emergency coronavirus budget.
The minimum income floor will be reinstated from this month, August 2021, as the Government starts to remove its Covid related financial support.
Universal Credit surplus earnings threshold extended
The Universal Credit surplus earnings threshold will be extended until April 2022.
If your monthly earnings are more than £2,500 over the amount where your payment stopped, this becomes "surplus earnings".
Any surplus earnings will be rolled over to the following month, where they count towards your earnings.
Universal Credit claimants will continue to receive the higher surplus earnings threshold of £2,500.
After April 2022 it will be reduced to £300.