There was no joy for claimants in the latest budget, with the £20 universal credit (UC) uplift limited to a further six months and still no uplift whatsoever for legacy benefit claimants.
It had been hoped that the chancellor would make the £20 uplift to UC permanent and extend it to the 2.5 million claimants of legacy benefits such as employment and support allowance, who have received no additional financial support during the pandemic. Disability and poverty charities had campaigned hard around this issue.
Instead, it was announced this week that the £20 uplift to UC, which was due to be withdrawn at the end of March, would be extended for a further six months and would them stop.
In addition, the temporary increase in working tax credit will end on 5 April and eligible claimants will receive a £500 one-off payment by 23 April instaed.
This includes those who, on 2 March 2021, receive:
Working Tax Credit payments
both Working Tax Credit and Child Tax Credit payments
Child Tax Credit payments and are eligible for Working Tax Credit but do not get a payment because their income is too high
More details on the one-off payment are available here.
The moves have been widely condemned by campaigning groups.
The Joseph Rowntree Foundation said:
“The government’s decision to cut universal credit and working tax credit in six months – just as the furlough scheme ends and unemployment peaks – will pull 500,000 people including 200,000 children into poverty as we head into winter.”
The Resolution Foundation argued:
“The poorest households will face a 7 per cent fall in income in the second half of 2021-22 due to the removal of the £20 a week universal credit uplift, which will take the basic level of benefits back to levels not seen since the early 1990s at the same time as unemployment is due to peak.”
The Institute for Fiscal Studies was equally scathing:
“It is, by the way, remarkable that while the chancellor felt the need for a gradual phase out of furlough, business rates support, stamp duty reductions and VAT reductions he is still set on a cliff-edge reduction in UC such that incomes of some of the poorest families will fall by over £80 between one month and the next. Whatever the case for cutting generosity into the longer term, if you’re going to do so the case for doing it gradually rather than all at once looks unanswerable.”
It looks very much like, once again, claimants will be expected to bear the brunt of a financial crisis that they did not create, at a time when their income has been reduced year after year in comparison to other sections of society.
