Universal Credit payments to be cut for thousands this Christmas

Payments for Universal Credit will be cut for tens of thousands of people this Christmas.

Thousands of households are reaching the end of the so-called benefit limit period – and as many as 160,000 households could be affected, the Express reports.

The benefit ceiling is a limit to the total amount that people of working age can receive from benefits, Citizens Advice says – and is designed to get people into work.

It only applies if you receive housing benefit or universal credit, and your benefits are capped if you receive more than the limit that applies to your circumstances.

The so-called grace period is because the limit may not affect your universal credit payments for up to nine months.

But for many people preparing for Christmas, that grace period is coming – and the change can cause financial trouble at the worst possible time.

Now the government has been brought on the scene in the House of Commons.

Seema Malhotra, Labor and Co-operative Party MP for Feltham and Heston, asked, “About 85 percent of hooded households have families with children, and the minister revealed last week that more than 160,000 households with Universal Credit have their payout could see December when their grace period ends.

Doesn’t she feel ashamed to get families and children into trouble just before Christmas?

“Children pay the price for their parents who lose their jobs.

“This is a ticking time bomb and she can stop it – it’s her choice: will she take the cap off?”

Therese Coffey, Secretary for Work and Pensions, replied: “The cap was an important part of the policy to encourage access to work.

“I am aware that there are only half a million vacancies, compared to a significant number of unemployed people.

However, I am sure that the honorable lady will welcome, along with me, some actions that are possible for some of the most disadvantaged families.

“These are mainly the ones backed by the £ 170 million COVID winter allowance, of which I understand her council will benefit approximately £ 823,000. ”

The grace period takes effect when an applicant’s income from work is below the threshold (between £ 569 and £ 604), but immediately before that, his earnings were at least at the previous year’s threshold.

However, it can also occur in a situation where before the entitlement to Universal Credit began, the plaintiff stopped working, but before doing so, his income was at or above the threshold every month for the preceding 12-month period.

Stephen Timms, Labor MP for East Ham, said in the House of Commons: “The number of households affected by the ceiling has more than doubled since the start of the pandemic to 170,000.

In addition, 160,000 households will reach the end of their nine-month benefit period in the coming month.

“So, will the Secretary of State consider extending the grace period to avoid scrapping benefits from troubled families in the run-up to Christmas?”

Ms. Coffey said: “Statistics show that the benefit of 140,000 households with children has been capped.

“I understand it’s about 3.1 percent of the Universal Credit case total.”

The government says that benefits usually decrease at the end of the grace period.

In some cases, however, this may not be the case.

This can happen if conditions change, while certain benefits are unaffected by the ceiling.

How does the grace period work?

The government says people will get the grace period if all of the following are true:

  • you are claiming universal credit because you have stopped working or because your income has decreased
  • you now earn less than £ 604 a month
  • in each of the 12 months before your earnings fell or you stopped working, you earned the same or more than the income threshold (this was £ 569 until March 31, 2020 and £ 604 from April 1, 2020)

Your partner’s income is included in the calculation of your earned income. This is the case even if they are not claiming benefits.

In a situation where you are divorced from your partner, their income is counted towards the time you lived with them before you split up.

But beware, you must report your income for the past 12 months when you use Apply for universal credit to get the grace period.

In addition, you will are not affected by the benefit ceiling if you or your partner gets Universal Credit because you have a disability or health condition, or because you care for someone with a disability, or if you jointly earn £ 604 or more.

Visit it Government website here.