DWP confirms Universal Credit payments to rise by £1,000 before Christmas – will yours?

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Martin Lewis: 500,000 more people now eligible for Universal Credit

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Universal Credit taper rate rules – which determine how a claimant’s payments are reduced the more they earn – were altered in the Autumn Budget. The rate will be dropping from 63 to 55 percent and this week the DWP broke down how much this will save families.

How much will be saved?

On top of the taper rate, work allowances – the amount eligible claimants can earn before their Universal Credit is reduced – have increased by £500 per year. This means the changes will allow claimants to keep more of what they earn, representing an effective tax cut worth £2.2billion for the lowest earners.

Taken together the move will see almost two million of the lowest paid working families better off each year by an average of £1,000, the DWP said. The changes mean, for example, that a single mother of two, renting in Darlington, working a full-time job on the National Living Wage, will see her take-home income increase by £1,200 on an annual basis.

Larger families are also set to benefit. A couple with two children, renting their home, where one partner works full time at the National Living Wage and the other works 16 hours a week earning the same, will be £1,800 per year better off.

The DWP worked to introduce the changes as quickly as possible, passing regulations last week to secure the higher payments for the lowest earners in time for Christmas.

Thérèse Coffey, the Work and Pensions Secretary, commented: “Tens of thousands of the lowest earners will see a boost to their bank accounts today following changes to Universal Credit, meaning that people can keep more of what they earn to help with the cost of living.

“We introduced this change earlier than planned which will see up to 500,000 more households benefiting before Christmas.”

Prime Minister Boris Johnson also said: “It’s right that we support hard-working families, and this change will help some of the country’s lowest income families keep more of their money.

“Together with the increase in the minimum wage and our investments in skills and training, it shows this is a government committed to making work pay.”

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Universal Credit eligibility

The Government confirmed a number of people are expected to be newly eligible for Universal Credit and as such, would-be claimants are being urged to check a benefit calculator on gov.uk to see if they could increase their income.

People may be able to get Universal Credit if they’re on a low income or out of work entirely. Usually, claimants will need to be aged 18 or over but there are some exceptions for those who are 16 or 17.

Claimants will also need to be under state pension age, have less than £16,000 in savings and be living in the UK when they claim.

Where claimants are eligible, they’ll receive a monthly payment designed to help with their living costs. A monthly standard allowance will be paid and extra amounts will be issued on top of this to cover certain costs such as rent and childcare.

Claims for Universal Credit are made online through the Government’s website. People will need to apply as a couple if they and their partner live together. They do not need to be married for this to apply.

When applying, claimants will need certain information at the ready. This includes banking details, personal information, details on income and outgoings.

This is important to note as if a claimant does not provide the right information when they claim it could affect when they get paid or how much they’ll receive.

Those who cannot use or access the digital services, or who have a question about their claim which cannot be answered online, can call the Universal Credit helpline on 0800 328 5644 by those who cannot use or access the digital services or who have a question about their claim which cannot be answered online.

There is also a Help to Claim service which can support claimants through the early stages of their Universal Credit claim. This is a free, independent, confidential and impartial service provided by trained advisers from Citizens Advice. They can help with things like how to gather evidence for your application or how to prepare for your first Jobcentre appointment.

Payments for Christmas

Those looking to receive payments for the Christmas period will need to act as soon as possible as it usually takes around five weeks to get an initial payment. This means claimants who apply from today are unlikely to get paid before Christmas but they may be able to apply for an advance.

Advances on a first payment can be issued by the DWP to help cover bills while the claimant waits for their first Universal Credit payments. The most one can get from an advance is the amount of their first estimated payment and these advances must eventually be paid back to the Government.

After an initial payment, claimants will be paid on the same date of every month. Where payment dates fall on a weekend or bank holiday, claimants will usually be paid on the first working day beforehand.

Claimants will get a monthly statement telling them how much Universal Credit they’re getting that month. If payments do not arrive on time, claimants should call the Universal Credit helpline straight away.

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