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The Government announced several benefit changes in the 2021 Budget, to help the country to recover from the coronavirus pandemic and its huge impact on the economy. Elaine Drury, our Welfare Benefits Advisor, provides a rundown of some of the key changes for you to be aware of:

1. The £20 a week uplift in Universal Credit has been extended. The boost to your monthly Universal Credit payment will continue until September 2021, unless extended again. It applies to all new and existing claimants regardless of your circumstances or earnings and can be used to help pay for food, expenses, or utility bills for example.
2. Welfare support for the self-employed has been extended by six months. The suspension of the Universal Credit minimum income floor has been extended until the end of July 2021. This means that you’re not assumed to be earning at least minimum wage when the amount you’re due is calculated. So, if you’re earning less than minimum wage, you’ll get more financial help. The minimum income floor will gradually be re-introduced in August but with a discretion not to be applied to claimants whose self-employed earnings are adversely affected by the pandemic.
3. Universal Credit advances won’t need to be paid for 24 months (instead of 12 months). If you request an advance payment from the Department for Work and Pensions (DWP) from April 2021, you’ll essentially have longer to pay it back. The DWP won’t automatically start taking repayments from your Universal Credit for two years.
4. The maximum Universal Credit deduction rate has reduced from 30 percent to 25 percent. Universal Credit payments are based on a standard rate, but your payments can be reduced based on your individual circumstances, for example if you owe Council Tax or are in rent arrears. How much can be deducted to pay these debts has changed from April 2021. The amount of money deducted from your benefits to pay off any debts has been reduced by five percent, leaving you with more Universal Credit in the short term.
5. The higher surplus earnings threshold for Universal Credit will remain at £2,500 until April 2022. It will then be reduced to £300. This means if you earn more than £2,500 above a threshold specific to your circumstances, it can count towards your earnings. So you’ll get a smaller Universal Credit payment, or your payments will stop completely.
6. Working Tax Credit claimants will get a one-off payment of £500 paid direct to you. The temporary £20 uplift ends. This applies to all claimants across the UK who were in receipt of Working Tax Credits as of 2 March 2021. It includes those getting Child Tax Credit only, who would be entitled to Working Tax Credit but for their income being too high to qualify.
7. The Government’s furlough scheme has been extended to 30 September 2021. Workers who have been furloughed because of the coronavirus pandemic will still get 80 percent of their pay, capped at £2,500 per month. Employers will be expected to pay 10 percent towards the hours their staff do not work in July, increasing to 20 percent in August and September.
8. A fifth Self-Employment Income Support Scheme will run from May to September 2021. Self-employed people whose turnover has fallen by 30 percent or more will get the full grant worth 80 percent of three months’ average trading profits up to £7,500. People whose turnover has fallen by less than 30 percent will receive a 30 percent grant, up to a maximum claim of £2,850. The scheme has been extended to include those whose business started in 2019-20.

If you need help with welfare benefits, please call us on 0300 555 0500 and ask to speak to our dedicated Welfare Benefits Team.