#AceFinanceReport – June.13: Editor says ……….Hundreds of thousands of people are believed to have applied for Universal Credit as a result of the ongoing pandemic: #Coronavirus has affected almost every aspect of our lives and it has changed Universal Credit in 10 major ways: Personal circumstances have continued to change as job losses and pay reductions become more common as the pandemic continues: Hundreds of thousands of people are believed to have turned to Universal Credit for financial support during the difficult times: The impact of lockdown has driven many to seek help from benefits to pay their bills and feed their families: There were 1.5 million claims for Universal Credit between March 13 and April 9, over six times more than in the same period last year and the most in a single month since the welfare scheme was first introduced in April 2013: Up to May 19, there have been 2.9 million applications for the benefit……………………….For those who are new to the system, or for existing recipients who are still getting Universal Credit during the coronavirus pandemic, these are the 10 ways coronavirus has affected the scheme and how it affects you……………..
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Universal Credit Claimants could be entitled to further benefit support:
1. Making a claim:
The first thing is to check you are eligible. For instance, if you have £16,000 or more in savings, you can’t get Universal Credit.
Bear in mind that your partner’s income and savings will be taken into account, even if they are not eligible for Universal Credit and not intending to apply for it. Don’t take any steps towards applying before checking the criteria or you could irreversibly affect existing benefits such as tax credits.
Claims for Universal Credit are made on the internet. You have to set up an online account and you also need a bank, building society or credit union account.
In a bid to ease pressure on the system during the pandemic, the DWP says people making new claims will no longer need to make a phone call as part of the process. The department said its staff will ring up claimants if they need to check anything and will also message via the online process to confirm details.
The DWP says its calls may show on your phone as an 0800 number or an unknown or private number and urges people to check their online accounts so they know when to pick up such calls.
2. Jobcentre visits:
During the claim process, you no longer need to arrange a face-to-face appointment and you do not have to go along to the jobcentre. The DWP says people receiving benefits do not have to attend jobcentre appointments for three months from March 19 2020. If coronavirus restrictions continue, this could be extended.
Claimants will be contacted to discuss alternatives such as telephone or paper-based assessments. You will continue to receive benefits as normal, but all requirements to attend the jobcentre in person are suspended.
Don’t go to the jobcentre unless asked to do so “for an exceptional purpose”, the DWP said.
3. Temporary increase:
On March 20, 2020, the Chancellor announced a package of support for workers during the coronavirus pandemic. This included a £1,000 increase to the standard allowance for Universal Credit for one year.
It means the amount of Universal Credit went up twice – once in line with inflation as the benefits freeze came to an end, and then a further boost for the coronavirus increase.
Rates for Universal Credit are now as follows:
• Single and under 25 – £342.72
• Single and 25 or over – £409.89
• In a couple and both under 25 – £488.59 (for you both)
• In a couple and one of you is 25 or over – £594.04 (for you both)
But concerns have been raised about the £1,000 boost (about £90 a month) only being in place for 12 months.
Shadow work and pensions secretary Jonathan Reynolds said: “If the Government believes this level of support is necessary during lockdown, why do they believe people will need less money when the (lockdown) ends and the normal cost of living would apply? “Surely it is inconceivable that anyone still unemployed by March next year could see their benefits being cut?”
The DWP confirmed the one-year limit on the increase and has so far made no suggestion it could be maintained beyond then.
4. Looking for work:
Usually, going on to Universal Credit if you are unemployed means proving to the DWP you are still looking for a job. A formal agreement called a claimant commitment sets out what people are expected to do in return for benefits – and what happens if they fail to comply.
What is Universal Credit?
Universal Credit is a new benefits system that will eventually replace six seperate benefits.
• income support
• income-based jobseeker’s allowance
• income-related employment and support allowance
• housing benefit
• child tax credit
• working tax credit
Claimants will get one single payment to cover any and all of these benefits they are entitled to. Out of that single payment they will then have to cover their own costs directly, e.g. rent, rather than it being a deducted payment.
The brainchild of the Conservative Government, it is theoretically meant to make claiming benefits easier. But the policy has been bereft with problems since it started being rolled out across the country and has been blamed for pushing many vulnerable people into hardship and poverty.
Claimant commitments are normally agreed with a work coach when a person attends a local jobcentre and must be accepted in order to receive Universal Credit. However, because of the exceptional circumstances resulting from the coronavirus pandemic, people are not expected to accept claimant commitments before being entitled to Universal Credit.
In addition, requirements to prepare for work, search for work or be available for work are temporarily suspended. Most claims for Universal Credit begin on the date the claimant commitment is agreed but for applications received in the four weeks up to April 9, 2020, the date the claimant verifies their identity is taken as the start date.
5. Advance payments:
With more people going on to Universal Credit, there have been more requests for advance payments. This is like an upfront loan of the amount of your first expected UC payment and is repaid in instalments from future benefits.
From March 1 to May 19, 2020, there were 1,132,570 advance payments issued. Most were advances requested by new claimants but there has also been an increase in the number of advances given to those already on the benefit – these include budgeting advances to help people cover emergency expenses such as replacing a broken cooker.
You normally need to have been receiving Universal Credit for six months or more to qualify for a budgeting advance. In addition, you need to have earned less than £2,600 (£3,600 together for couples) in the past six months.
You can receive up to £348 if you’re single, £464 if you’re part of a couple or £812 if you have children.
The DWP runs a similar scheme called a budgeting loan for those on Income Support, income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA), or Pension Credit.
The DWP says repayments on these loans have been temporarily stopped because of the impact of coronavirus. Repayments won’t restart until July 2020 at the earliest.
6. Maximum deductions:
Money can be taken out of your benefits by the DWP to repay anything you owe to the department or to other organisations. This includes rent arrears and other debts.
The maximum amount that can be deducted used to be 30 per cent of your Universal Credit standard allowance. This was lowered to 25 per cent from April 6, 2020, meaning UC recipients get more money per month.
In addition, deductions to pay off debts to housing providers, energy firms, water suppliers or the council were temporarily halted when the DWP was dealing with a massive surge of benefit claims at the start of the pandemic. These third party deductions resumed from May 10.
The DWP says that if you fail to do what you have agreed in your claimant commitment without good reason, your Universal Credit payments can be reduced for a set period. This is called a sanction.
These financial penalties can be applied for failing to attend jobcentre appointments, job interviews or training courses.
This became an issue when the coronavirus pandemic began to take hold.
The DWP confirmed that such punishments won’t be applied if you break the rules because of coronavirus – such as if you are self-isolating and can’t leave the house.
Therese Coffey, Secretary of State for Work and Pensions, said: “People will not be penalised for doing the right thing.
“I think it’s important that people do have that conversation with their work coach. As I’ve emphasised already, work coaches can exercise discretion but the important thing is that ongoing conversation which a claimant has with their work coach.”
8. Housing allowance:
Those on Universal Credit get money towards their housing costs included in their monthly payment.
Staff at the Government’s Valuation Office Agency set a Local Housing Allowance (LHA) which is used to work out how much is given to claimants renting from private landlords.
It’s based on average rents in the area where you’re living.
The Government increased the LHA from April when the benefit freeze came to an end.
People should now get more money towards their rent. It also means more rented properties are now affordable to tenants who need to move.
For instance, in Birmingham the LHA rose as follows from April 2020:
• Category A (tenant has exclusive use of one bedroom with shared use of other facilities) – increased from £57.34 to £67
• Category B (tenant has exclusive use of one bedroom with exclusive use of other facilities) – increased from £101.84 to £120.82
• Category C (tenant has use of two bedrooms) – increased from £127.62 to £143.84
• Category D (tenant has use of three bedrooms) – increased from £135.96 to £155.34
• Category E (tenant has use of four bedrooms) – increased from £173.41 to £195.62
9. Minimum income floor:
There was good news for self-employed people when the Minimum Income Floor was lifted. The MIF is an assumed level of income calculated by the DWP based on what it would expect an employed person to receive in similar circumstances.
It is used instead of a person’s actual earnings when working out how much Universal Credit they would get on top – even though self-employed people typically have income that goes up and down from month to month.
Chancellor Rishi Sunak confirmed in the March 2020 budget that the MIF would be temporarily suspended to help the economy during the coronavirus outbreak. He did not state how long this would be in place but did say it was part of a package of measures to tackle the impact of the epidemic.
So the benefits received by a self-employed person will be based on their actual earnings. Those whose income is a lot less during the coronavirus crisis – lower than the previous MIF that would have been applied – will see a rise in their Universal Credit.
The benefit cap is a limit on the total amount of state help you can receive.
The benefit cap outside Greater London is:
• £384.62 per week (£20,000 a year) if you’re in a couple
• £384.62 per week (£20,000 a year) if you’re a single parent and your children live with you
• £257.69 per week (£13,400 a year) if you’re a single adult
The benefit cap inside Greater London is:
• £442.31 per week (£23,000 a year) if you’re in a couple
• £442.31 per week (£23,000 a year) if you’re a single parent and your children live with you
• £296.35 per week (£15,410 a year) if you’re a single adult
The DWP said: “For some of those new to the benefits system, who have been employed for the previous 12 months, the benefit cap won’t apply for a nine month period.”………………..You will get this nine month grace period if you are claiming Universal Credit because you stopped working or your earnings went down; if you are now earning less than £604 a month; or if, in each of the 12 months before your earnings went down or you stopped working, you earned the same as or more than the earnings threshold (this was £569 up to March 31, 2020 and is £604 from April 1, 2020)
#AceFinanceDesk report …………Published: June.13: 2020: