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Changes to benefit payments

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WRU BUDGET CHANGES 871X581

Changes to benefit payments

The budget announced by the government in March included changes to benefits. With many people affected by coronavirus and struggling to pay bills, it’s important to keep up to date with how your benefits will be affected. Read on to find out what’s happening with benefit payments and how this may impact your household income.

Universal Credit and Working Tax Credit

In April last year, the government introduced a temporary weekly increase of £20 for people receiving Universal Credit and Working Tax Credits. This ‘£20 uplift’ was designed to support those struggling through the coronavirus pandemic and was due to be in place for one year until the end of March 2021. However, it has now been extended until September this year.

The Working Tax Credit (WTC) uplift will be replaced with a £500 one-off payment that is intended to cover six months of extra support for existing claimants. If you were in receipt of Working Tax Credit on 2 March 2021, you should already have automatically received your £500 payment.

If you receive WTC and your working hours have reduced as a result of coronavirus (including your role being furloughed), you will continue to be treated as working your normal hours and do not need to report your change to HMRC.

Universal Credit advances

You can apply for an advance payment of Universal Credit (UC) to help you get by while you are waiting for your first payment.

The advance payment is a loan that will have to be repaid from your future UC payments until the advance is fully paid back. The time you have to repay this has now increased from 12 to 24 months.

Universal Credit deductions

Also announced in the budget was the maximum rate at which deductions can be made from your Universal Credit payments. This has now reduced from 30% to 25% of your standard allowance. These changes were originally due to come in from October 2021.

If you have any questions or queries about your benefit entitlement or payments check the online benefit calculator or get in touch with our Welfare Rights & Money Advice Team.

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