Minimum and Living Wage increase
From 1st April 2020, National Living Wage and National Minimum Wage hourly pay rates increase.
Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice
April 2020 (current rate) £8.72 £8.20 £6.45 £4.55 £4.15
April 2019 to March 2020 £8.21 £7.70 £6.15 £4.35 £3.90
If you receive Universal Credit and are paid at the National Minimum wage or National Living Wage rates, your wage deduction will increase due to higher wages.
The Chancellor announced that both Universal Credit standard allowance and Working Tax Credits will be increasing by £1000 to support people through the COVID-19 Pandemic. This will be for financial year April 2020 – March 2021 (financial year starts on 6th April). From April 2021, the rates will go back to the current rates of payment – The current rates will be slightly higher as the Government previously announced that all Welfare Benefits will increase by 1.7%.
If you are still on legacy benefits (Jobseeker’s Allowance, Employment and Support Allowance and Income Support), they are increasing by 1.7%. The Government is not increasing by £1000 for the financial year.
We have also found information on the exact rates of Universal Credit increase that we referenced in previous update. The first time you will see this increase is in Universal Credit payments from 12th May 2020.
Age Current Rate New Rate (from 6th April 2020)
Single, under 25 £251.77 £342.72
Single, aged 25 or over £317.82 £409.89
Couple, both under 25 £395.20 £488.59
Couple, one or both over 25 £498.89 £594.04
Every other component including Child Element, Carer Element, LCWRA and Severely Disabled Child Element are also increasing by 1.7%.
Carer’s Allowance is increasing to £67.25 per week. If you receive Universal Credit as well as Carer’s Allowance, the monthly Carer’s Allowance amount that will be deducted from Universal Credit will be £291.42.
DWP freeze on repayment of benefit debt
We have read on two different sources (see the links at end of update) that the DWP are suspending repayments of overpayments and social fund loans. These deductions will stop automatically if you have them deducted directly from your benefit.
What deductions will still occur?
From the information available to us, the only DWP debt that is still recoverable is the advance payment.
There is no guidance available on third party deductions including landlords for rent arrears, gas, electricity, Council Tax, water and fines.
PLEASE note that 30% is the maximum amount of the standard allowance that is allowed to be deducted.
With the DWP debt recovery currently suspended, it may mean that other third party deductions increase.
We have taken this information from reputable sources (Citizen’s Advice and RightsNet with the links below). Once we receive official guidance via DWP or gov.uk, we will post a further update.
Information found from below sources;
Here at The Project, we understand that all the recent changes can get a little bit confusing, so we have collated information from different sources (links to resources are at the bottom of the update).
We hope that this is useful for you, but please call The Project for any further information or clarification.
The government has announced that LHA rates (the maximum private rent you can be paid depending on your circumstances) are increasing. At The Project, we are happy to see the large increase to Local Housing Allowance as this will help prevent homelessness, and open up private renting to some people who are struggling to find accommodation. The increases are due to come into force from April. See the table on next page for the new figures.
Number of bedrooms Category Weekly amount Monthly amount
1 bedroom with shared facilities A £67.00 £291.13
1 bedroom self contained B £120.82 £524.99
2 bedrooms C £143.84 £625.02
3 bedrooms D £155.34 £674.99
4 or more bedrooms E £195.62 £850.02
These figures are for Birmingham City Council, and each Local Authority (Council) has different LHA rates. Please see below website to find your own Local Authority.
You do not have to do anything! Universal Credit and Housing Benefit will be automatically amended depending on circumstances. Please ensure you check the statements.
If your rent is below the new LHA amount for the property, your full rent entitlement will be paid. If your rent is above Local Housing Allowance, you will need to pay the difference (shortfall).
However, if your landlord has changed the rent from April, you need to let Housing Benefit or Universal Credit know about this change and how much your rent costs.
With increases to personal element and Local Housing Allowance, it may mean that some people now become affected by Benefit Cap. The amount you can claim (including Child Benefit) is £1666.67 each month. The way they reduce your benefit is either by deducting it from your Universal Credit or Housing Benefit claim.
There are some exemptions to the Benefit Cap including PIP, DLA or Carer’s Allowance / Carer Element within the household.
If you feel you may be affected by Benefit Cap, please call The Project and speak to Adam or Nicky on 0121 453 0606 option 3, and they will be able to do an assessment with you over the phone.
The Government announced a £500 million hardship fund for those receiving Council Tax Support. Birmingham City Council (BCC) has been awarded £17 million. The reduction will be awarded after any award of Council Tax Support has been awarded, and will not affect any other benefits. The Government expects local authorities to reduce bills of all working-age recipients of Council Tax support by £150 for the financial year. Local Authorities will already have enough information to award, so applications do not need to be made. If you make a Universal Credit claim and you are required to pay Council Tax, please ensure that you also make an application for Council Tax Support online.
Information taken from below websites;