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Universal Credit slammed ‘entirely insufficient’ as claimants face homelessness | Personal Finance | Finance


Universal Credit claimants could be up to £670 worse off next year even if benefits are increased in line with the rate of Consumer Price Index (CPI) inflation.

If benefits increase in line with September’s inflation rate, as expected, they will be boosted by 6.7 per cent from April 2024 onwards.

Even with the potential increase in benefits, those on benefits may be worse off as there may be no cost of living support. If the cost of living support ends in April next year it could offset any increase in benefits.

An assessment by the New Economics Foundation found that many families are facing further struggles as uncertainty about future support continues.

If cost of living payments end as planned by April next year, around 40 per cent of all households would fall below the ‘minimum income standard’ – a widely used benchmark for a reasonable standard of living after housing and childcare costs.

The financial support available to a single person over the age of 25 on Universal Credit would fall by £670 in April 2024 compared to the same time last year.

In the same circumstances, the income of a single parent with one child on Universal Credit would fall by £350, while a couple over 25 with two children would see their benefits increase by just £35, the analysis found.

Gareth McNabb, director of external affairs at Christians Against Poverty (CAP), said: “As it stands, benefits are paid at a level that is not quite enough to meet even basic needs – the standard Universal Credit allowance of £35 a week is short . And falling inflation doesn’t mean prices are going down, just that they’re rising so fast.

“The Consumer Price Index figure of 6.7 per cent used to determine benefit increases also does not reflect what life is like on low incomes, where a much larger percentage of their outlays are on areas like with food where prices are increasing almost. double the average.

CAP research has found that nearly half of their clients will not have enough income to cover their essentials, with an average deficit of £85 a week.

It cannot be right to consider cutting wages for those on the lowest incomes, as is being considered by the United Kingdom Government, explained Mr. McNabb.

Exclusive Freedom of Information details obtained by Councils across England show that more than 170,811 households contacted their local authority as homeless when claiming Universal Credit between 2019 and 2023.

Figures also show that between 2019 and 2021 the number of homelessness from households receiving Universal Credit more than halved, increasing from 23,730 to 36,598.

Meanwhile, 60,170 families who claimed the monthly payment needed accommodation in the year to June 2023.

Although an increase of 6.7 per cent is expected it has not been confirmed by the Government, which means that benefits may rise by a different amount.

Jeremy Hunt is understood to be considering using a lower benchmark, possibly reflecting the expected level of inflation for next year, to limit the cost to the Treasury.

Charity campaigners have warned the Chancellor to ensure that benefits keep up with prices so that claimants’ living standards do not fall over time.

The current standard allowance for single universal credit claimants under the age of 25 is £292.11 per month. If it rises by 6.7 per cent it will go up by £19.57, to £311.68.

For single claimants over the age of 25 it would go up by £24.71, from £368.74 to £393.45 a month. For under-25s living with a partner, the monthly payment would increase from £458.51 to £489.23 – an increase of £30.72.

And for those who live with a partner and if either of them is over 25, a 6.7 per cent increase would mean a £38.78 rise in monthly payments, from £578.82 to £617.60.

During this tax year 2023/2024, millions of households are set to receive a Living Cost Payment of £900. This is a tax-free amount to help people pay for ever-increasing energy bills and other costs such as food and rent during the cost of living crisis.

The £900 was divided into three payments for those eligible and on means-tested benefits, such as Universal Credit, Pension Credit, or tax credits. However, campaigners argue that this lack of support in the next tax year 2024/2025 will offset any increase in benefit.

A Government spokesman said: “Our welfare system provides a strong financial safety net for those who need extra support, and there are almost two million fewer people in extreme poverty than in 2010.

“But we know that some families are struggling, and that is why we have increased benefits by more than 10 percent this year, we are focused on halving inflation, we have increased financial support ever available worth around £3,300 per family, and that we have announced another increase for National Living. Pay.

“To help people escape poverty through work, we’re investing £3.5 billion to help thousands into jobs and we’re removing barriers for parents with the biggest ever expansion of free childcare – providing 30 hours the free hour of childcare for working parents and support for children from the age of nine months until they start school. This will save eligible parents up to £6,500 a year on average.”

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