Payments are available to help people who have lost their job or need extra financial support.
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The £20-per-week boost to universal credit will be extended until the end of September, Chancellor Rishi Sunak announced in his Budget on Wednesday.
The increase was brought in at the start of the pandemic to help struggling families, and was due to end on 31 March.
Universal credit is claimed by more than 5.5 million households across the UK. The payment was increased by £20 a week in April 2020 as part of the Chancellor’s early Covid economic response.
The Joseph Rowntree Foundation – a charity which researches poverty – says millions of households would have faced an income loss equivalent to £1,040 a year if the increase was scrapped, with 500,000 more people driven further into poverty.
Universal credit is a benefit for working-age people, which was introduced to replace six benefits and merge them into one payment. The replaced benefits are:
- income support
- income-based jobseeker’s allowance (except for some people with severe disabilities)
- income-related employment and support allowance
- housing benefit
- child tax credit
- working tax credit
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Most people who would have made a new claim for these individual benefits must now make one for universal credit, which was designed to make claiming benefits simpler.
Making a claim for universal credit stops payment of any existing legacy benefits, so it is worth getting advice before doing so.
A single universal credit payment is paid directly into claimants’ bank accounts – monthly in England and Wales, but there is the option of payment every two weeks in Scotland and Northern Ireland.
It can be claimed whether you are in or out of work.
Universal credit may not be appropriate or available for everyone. Claiming it can affect other benefits, and it is vital to get some advice – available for free – before applying.
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It is complicated to work out exactly how much universal credit you might receive. Some people, such as those with £16,000 or more in savings, will not be eligible at all.
Others may find what they receive depends on their circumstances, including any income their family has, as well as housing and childcare costs.
One contentious issue is that it usually takes five weeks from the date of claiming to receiving a first payment, although claimants may be able to get an advance loan.
An application for universal credit may put a stop to any tax credits you receive, even if it proves to be unsuccessful.
You may be able to claim a reduction in council tax when on universal credit, and get help with childcare costs. There is also support to pay the rent, which works in different ways across the UK. In time, there may also be assistance in paying the mortgage, although there are some strict criteria involved.
The main benefit for anyone losing their job after a period in work is new-style jobseeker’s allowance (JSA).
This is worth £58.90 a week, if you are under 25, or £74.35 a week if you are 25 or over.
You can get this for up to six months and it will be paid into your bank, building society, or credit union account every two weeks. Unlike universal credit, your partner’s or spouse’s income will not affect your claim.
You may be able to claim new-style JSA as well as universal credit.
There is a host of free guidance and advice available, including:
- The Money Navigator tool from the Money and Pensions Service relates to coronavirus-related money matters
- The Turn2Us charity has a benefits calculator
- Guidance is available from Citizens Advice and from the Low Incomes Tax Reform Group