Spring benefits update – the new benefits year and budget news
April is always an important time within welfare benefits. Some rates of benefit payment increase and this is often the time that changes are implemented. Added to that, there was a budget on 3rd March 2021. So, this seems a good time to update you with all the things that might affect you or a member of your family.
Universal Credit uplift
The temporary increase to the standard allowance within Universal Credit (worth about £20 weekly) which was introduced in response to Covid-19 will not be removed from April 2021, as was originally planned. Instead, it will be continued until the end of September 2021. The plan is that it will be removed then, but we will have to wait and see.
Sadly, despite a lot of pressure being applied, the Government has not agreed to give any equivalent increase to people receiving Employment and Support Allowance, which we believe is extremely unfair.
Working Tax Credit Uplift
The temporary increase that was also given to people receiving Working Tax Credit has ended though. Instead, they will be given a one-off £500 lump sum payment in April 2021. Payment should be made by 23rd April 2021.
Deductions from Universal Credit
Many people who receive Universal Credit (UC) find that they have deductions made from their payments for things like rent arrears and utility arrears. Until recently, the DWP could make deductions of up to 30% of a person’s standard allowance, in order to repay any debts or advance payments. From April 2021, this has been reduced to 25%. Whilst this will mean that it will take longer to repay the debts, it will mean that UC recipients will have more to live on month by month.
Advance Payments of Universal Credit
People making a new claim for Universal Credit receive their first payment about 5-6 weeks after they make their online claim. For many people, this is far too long to wait.
In order to manage during that period, they can request an advance payment of up to 100% of what it appears they will be entitled to receive.
Until recently, repayment had to be made over the following 12-month period. However, from April 2021, any applicants who take an advance payment will be offered the option to repay over a 24-month period. This is good news.
Resumption of face to face medicals
During the Pandemic, the DWP suspended face to face medical assessments for Personal Independence Payment and the Work Capability Assessments for ESA and Universal Credit.
From May 2021, these face-to-face medical assessments will restart in a Covid safe way. For details of how these will take place, see this weblink:
Minimum Income Floor – Universal Credit self-employed claimants
When self-employed people claim Universal Credit, it is assumed after one year that their earnings will have reached a certain level, which is the equivalent of what they would earn working full time at the national minimum wage! So, whether they earn this amount of not after one year, this is the income that is used to calculate their UC entitlement. This is known as the ‘minimum income floor’ (MIF).
During the Pandemic, use of the MIF was suspended. This suspension has now been extended to July 2021. After that, it will be up to individual UC work coaches to decide whether it should be applied on a case by case basis – presumably after exploring whether the Pandemic has affected the claimant’s self-employed earnings.
The Local Housing Allowance
When private sector tenants claim Universal Credit and need help with their housing costs, these are calculated using the Local Housing Allowance or LHA. The LHA rate is the maximum amount that can be paid towards private sector housing costs, and the limits are based on average prices in the rental area and the size property that the household needs to live in.
Most people under 35 are deemed to only need a bedsit or a room in a shared house – and this is known as the ‘shared accommodation rate’ of LHA.
At the moment, care leavers up to age 22 are exempt from having the shared accommodation rate applied to them. However, from June 2021, this exemption will apply until their 25th birthday.
Another exemption from the shared accommodation rate is where someone aged 25-34 has been living in a hostel for 3 months and has been getting help with rehabilitation. From June 2021, this exemption from the shared accommodation rate will apply to those aged under 25 as well.
We do hope this round-up has been a useful explanation as to the latest benefits news.
We are able to help you with most areas of benefits advice and advocacy. We offer meetings by phone or Zoom, and we can assist you in your dealings with the Department for Work and Pensions, your local authority, and various other agencies.
Please note that we only offer a chargeable service, and to obtain our help you will need to register as a Renaissance Legal client. Please contact us to discuss your own individual situation.
If you need access to free advice, then you can use this website to find advice services in your local area: www.advicelocal.uk