Universal Credit payments and other benefits have been flat for a number of years. In 2016, the former Chancellor of the Exchequer George Osborne introduced a freeze which meant all benefit payments remained flat, regardless of changes to inflation. However, in November 2019, the government confirmed that this freeze will soon come to an end.
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From April 2020 working-age benefits, which includes Universal Credit and jobseekers allowance, will rise by 1.7 percent.
It is not just the new Universal Credit system that will benefit from this as “legacy benefits” will also be raised.
Legacy benefits are what was claimed before Universal Credit launched.
Universal Credit consolidated a lot of these benefits together but some people may still be claiming under the old system.
The legacy benefits include child tax credit, housing benefits, income-related employment and support allowance, income-based jobseeker’s allowance, income support and working tax credit.
There are plans to completely roll these benefits into Universal Credit eventually but claimants can still receive income from them until that time.
Universal Credit payments are based on specific circumstances so it may be difficult to work out how the new rates will affect claimers.
It is possible to visualise how the rates could benefit claimants however by looking at the standard allowances.
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There is a monthly standard allowance in place that everyone will get as a minimum.
These allowances are split into four specific circumstances.
People who are single and under 25 will get £251.77 a month or if they’re over 25 it will be £317.82
Couples who are claiming and are both under 25 will receive £395.20 each and couples over 25 will get £498.89.
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With the 1.7 percent increase coming it is possible to see how the base rates will rise.
Single people will get either £255.97 or £323.22 a month Couples will receive £401.91 or £507.37.
It should be remembered that the base rates in place are the minimum that a Universal Credit claimant will receive.
It is likely that many people receiving benefits will get even more in income than this from April.
While the rates will be welcomed by many, some organisations have detailed that they don’t go far enough. Citizens Advice produced research detailing that despite the upcoming rises, many households will still end up in a negative budget.
It claims that the measure used to raise these rates, the consumer prices index (CPI), is not adequate and it should actually be two percent higher than the CPI rate to really make a difference.
While there have been no changes made to the official rise, many within the political world are pushing for change.
Following the research from Citizens Advice, the All Party Parliamentary Group pushed for the government to take heed of the findings and make a change to the Universal Credit system.Source: Read Full Article