Universal Credit alert as people warned over risks of making a claim

People who want to claim Universal Credit are warned about the effect it will have on their entitlement to other benefits.

Claimants on so-called legacy benefits such as Work tax credit or Child tax credit may decide they want to turn to Universal Credit if they think it could bring in more money.

But the Express reports that applying for Universal Credit in such circumstances is risky – since the right to benefits you are already on ends when you apply, a minister has warned.

This also applies if it is decided that you are not entitled to Universal Credit.

The message was underscored in a debate in the House of Commons as pressure on the government to boost people with Universal Credit at £ 20 a week is mounting after it ended in March next year.

The £ 20 increase awarded in March was not offered to people on benefits such as Employment and Support Allowance (ESA), Jobseeker’s Allowance and Income Support.

Will Quince, parliamentary secretary of state for work and pensions, told MPs that people on such benefits could apply for universal credit if they wanted to, but warned people to be aware of the risks.

“First of all, let me say that I appreciate that many people are facing financial dislocation as a result of the pandemic and that the government has put in place an unprecedented package of aid,” he said.

The increase in universal credit was intended to target those facing the most financial disruptions, but most legacy working-age benefits will be increased in April next year in line with inflation, and recipients legacy benefits can take advantage of the local housing benefit or, indeed, the local social assistance schemes.

“I remind the House that legacy benefit claimants can file a claim with Universal Credit if they think they would be better off, but I would encourage them to consider their eligibility as their right to legacy benefits on demand will lapse. “

The standard payout for Universal Credit was increased for one year by approximately £ 1,000 in March this year.

The basic element of Working Tax Credit increased by the same amount over the same period – although other benefits did not.

Now the government is facing many calls to expand the boost.

In addition, Chancellor Rishi Sunak was urged to increase all legacy benefits by the same amount.

A petition with a signature of 119,000 with the title Do not leave people with disabilities behind has already been handed over to the Chancellor.

It calls for two million disabled, single parents and families receiving legacy benefits such as Labor and support allowance (WHICH), Unemployment benefits and Income support to stop refusing the boost.

The issue came up in parliament when MPs asked questions to the ministers of the Department of Work and Pensions (DWP).

Conservative New Forest West MP Sir Desmond Swayne asked, “Is there any evidence that the financial impact of the coronavirus has been less severe on legacy benefit recipients than Universal Credit’s?”

In the same session, SNP MP Neil Gray said, “The Secretary of State is talking about jobs, but just as employment is expected to reach 2.6 million, she is scandalously planning to reduce universal lending.

Prior to the spending review, a petition, organized by the Disability Benefits Consortium and signed by 119,000 people, was filed with the government calling for the UC increase to be extended to legacy benefits.

Given that the cost of living for the disabled has risen dramatically during the pandemic, why hasn’t the government acted?

“Isn’t that just a perfect summary of the story of two governments: a Scottish government providing support to those who need it, while the British government is raising disability benefits by ridiculously low levels?”

Secretary for Work and Pensions Therese Coffey responded by saying: “Last week, I published the statement for the benefit increase, which indicated that inflation for benefits had risen, as well as 2.5 percent for state pensions.

“I am aware that there are a number of different things going on with the disbursement of benefits – my dear. Friend of the Minister for Disabled, Health and Work just reminded me that spending on benefits for people with disabilities is five percent are higher.

“I think there is a lack of understanding of what the spending review is: it is not about budgetary measures, which usually go hand in hand with major fiscal events.

“As indicated earlier, the decision to consider the temporary increase in universal lending will be taken in the new year.”

Shadowwork and pension secretary Jonathan Reynolds also urged the government to extend the universal credit.

He said, “ I am grateful to the Secretary of State for that answer, but last week the Chancellor said this is the biggest economic crisis in 300 years, and he is right, so I can’t understand how those same spending review documents the government is scrapping in April. universal credit – a cut of £ 1,000 a year, taken from 6 million families when they need it most.

“No government has cut unemployment benefits during a crisis since the Great Depression, so how can the biggest economic crisis in 300 years be the time to do that?”

Dr. Coffey replied: ‘As the honorable gentleman knows, the government has put in place a series of temporary measures to support the most affected individuals, including the leave scheme, the self-employed income support scheme and the £ 20 UC increase.

“The Chancellor has confirmed the UC increase until March ’21, and it is good that we are waiting for more clarity on the national economic and social picture before examining the best way to advance low-income families.

“That is exactly what I stated in the written ministerial statement last week.”

Citizen’s advice reports that Universal Credit will replace the following benefits by 2024 in an effort to simplify the distribution system:

  • Housing allowance

  • Income-related Employment and Support Allowance (ESA)
  • means-tested benefit for jobseekers
  • Work Tax Credits (WTC)

The MoneyAdviceService website offers a range of advice for those considering moving from legacy benefits to Universal Credit.

The site says, “It’s important to understand that you can get more or less money than you do now when you switch from legacy benefits to Universal Credits. For this reason, it’s best to check ahead of time how your income will be affected. circumstances that delay your claim for universal credit may make sense. ”

To learn more about Universal Credit, visit the government’s special webpage here.