Increased support available through tax credits and Universal Credit
The UK Government has made some changes to the support available through working tax credits and Universal Credit, which will provide some help to individuals and self-employed who may have lost their job or seen a reduction in their salaries or income
Increases in the standard rates
The standard rate for Universal Credit and tax credits will both increase by £20 a week for one year from 6 April 2020. This increase is in addition to the increase already announced, meaning claimants will be up to £1,040 better off.
The standard monthly allowances for Universal Credit are:
|
REQUISITES |
MONTHLY STANDARD ALLOWANCE 2020/21 |
MONTHLY STANDARD ALLOWANCE 2019/20 |
|
Single and under 25 |
£342.72 |
£251.77 |
|
Single and 25 or over |
£409.89 |
£317.82 |
|
Couple both under 25 |
£488.59 |
£395.20 |
|
Couple and either person is 25 or over |
£594.04 |
£498.89 |
Support for rental payments
The government has significantly increased the support available for rent payments for those claiming Universal Credit. From April, local housing allowance rates will cover at least 30% of market rents in each area. For instance, for a two-bed home in London, the maximum was £1,390 per month and it could now be as high as £1,550 per month. The housing element of Universal Credit can also be used to cover mortgage interests and service charges.
Additional allowances are available to those with children. For 2019/20 these are:
1. First child: £277.08 (born before 6 April 2017) or £231.67 (born on or after 6 April 2017).
2. The second child and any other eligible children: £231.67 per child.
Childcare costs
Up to 85% of the childcare costs will be covered (for 2019/20 up to £646.35 per month for one child and £1,108.04 per month for two or more children).
Advance and hardship payments
For those who do not have enough to live on while waiting for the first payment, it will be possible to ask for an advance payment, after the claim has been made. The maximum amount which is possible to get is equal to the estimated amount of the first payment of the Universal Credit.
People who can’t afford to pay their rent, heating, food and/or personal hygiene goods because of a sanction can also ask for a hardship payment.
The way the reimbursement of the advance payments works is through the Universal Credit payments. The payments will be lower (the amount will depend on the number of months agreed to repay the advance payment) until when it will be entirely repaid.
Alternative Payment Arrangements
Whether somebody faces financial difficulties in paying the rent, the tenant or the landlord can apply for an Alternative Payment Arrangement (APA).
Depending on the circumstances, it is possible to get an APA to:
- pay the rent directly to the landlord;
- get paid more frequently than once a month;
- receive split payments from those part of a couple;
Budgeting Advance
People might be able to get a Budgeting Advance to cope with:
- emergency household costs, such as replacing a broken cooker;
- getting a job or essential costs to continue working;
- funeral costs.
The reimbursement will be made through the regular Universal Credit payments, which will be lower until when the anticipated payment is completed repaid. If the Universal Credit payments are stopped, the anticipated payment must be repaid in other ways.
How much it can be borrowed
The smallest amount which is possible to borrow is £100. People can get up to:
- £348 if they are single;
- £464 if they are part of a couple;
- £812 if they have children.
The amount which can be borrowed depends on whether the applicant has savings of over £1,000 and his/her ability to repay the loan.
Eligibility
To get a Budgeting Advance, all of the following conditions must apply:
- Having applied to one of the known government schemes:
- Universal Credit;
- Employment and Support Allowance (ESA), whether there is a disability or a health condition which influence the ability to work;
- Income Support, that is a support for some low-income people (pregnant women, a single parent with a child under the age of five or, in some cases, a person unable to work because sick or disabled).
- Jobseeker’s Allowance or State Pension Credit for at least 6 months, unless the money is needed to start a new job or is essential to continue working.
- Having earned less than £2,600 (£3,600 for couples) in the past 6 months;
- Having paid off any previous Budgeting Advance loans.
