Universal Credit provides assistance to individuals who are either out of work or on a low income. To be eligible for Universal Credit, a person must be 18 or over, or under state pension age. In addition, a person and their partner must have £16,000 or less in savings between them, and be resident in the UK.
He said: “It will be a huge relief for people on Universal Credit to not face a cut to their benefits next month.
“But with a challenging recovery ahead of us, this is a stopgap.
“A six-month extension kicks the can down the road, only to leave millions facing financial cliff edge in the autumn.
“We urge the Government to think again. The Universal Credit uplift must be kept for at least a year to help people pick up the pieces from this crisis.”
To provide further support, the DWP has also confirmed a slight change to advance payments of Universal Credit.
Another change to Universal Credit which will take place is the minimum income floor (MIF) – which is a limit on how much self-employed people are able to claim.
MIF was suspended in 2020 due to the pandemic, however, it has been confirmed the policy will be reintroduced at the end of July.
Under MIF rules, DWP assessors consider those who are self-employed as though they earn minimum wage, even if they are in fact earning less than this.
The consequences of this are that once a person’s earnings dip below the so-called “floor”, then they will have their Universal Credit capped.
Finally, there is also a change which is set to occur when it comes to surplus earnings for Universal Credit.
At present, due to the pandemic, the threshold stands at £2,500 – and this has been confirmed to continue until April 2022.
However, from then on, the threshold will return to its previous £300 rate.