Home Finance Universal Credit extension: Are you entitled to delay your advance repayments?

Universal Credit extension: Are you entitled to delay your advance repayments?

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Universal Credit is available to those who are out of work or on a low income. As of January 13, six million people were receiving Universal Credit, which is an uplift of 98 percent from March 12, 2020. During the initial months of the coronavirus pandemic, there was an increase in the number of advances being paid. Now new changes are being introduced to Universal Credit, but will you be affected?

What is Universal Credit?

Universal Credit is a benefit payment available to eligible recipients on a monthly or bimonthly basis to help them with the cost of living.

The payment is designed to support individuals who are out of work or on a low income.

Universal Credit replaced these payments, which are called legacy benefits by the Department for Work and Pensions:

  • Income support
  • Working tax credit
  • Income-based jobseeker’s allowance (JSA)
  • Income-related employment and support allowance (ESA)
  • Housing benefit
  • Child tax credit.

READ MORE: PIP assessments set to change as DWP issues important update

Currently, all those who apply for advance repayments must repay them within a 12-month period.

However, from next month, new recipients will be entitled to repay it over 24 months.

The Budget reads: “The Government will support claimants to keep more of their Universal Credit awards while ensuring they meet their financial obligations by bringing forward previously announced changes.”

This allowance does not just include an advance repayment period though as the maximum rate at which deductions can be made which is due to reduce from 30 to 25 percent of the standard allowance.

In addition to the extension of the repayment period for advances, millions of claimants will also see their payments boosted for a further six months.

The £20 a week uplift, previously due to end on April 6, will now remain in force until the end of September.

The Universal Credit minimum income floor will also not return until August.

The higher surplus earnings threshold for Universal Credit will remain at £2,500 until April 2022, after which it will revert to £300.



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