Covid-19 Benefits Advice
Welfare Benefit Advice & Support

14th April 2020

We previously mentioned that the standard allowance was increasing from 12th May. We have since found out that this information is incorrect. The earliest you will receive the standard allowance increase is 13th April 2020. This is because the changes came into effect on 6th April, and have included any assessment period which falls on this date.

All other elements will not increase until 12th May as you have to have completed a whole assessment period from 6th April.

2nd April 2020
This update is further information linked to the first update on 30th March, so please read both updates. The first update is below this update further down the webpage.

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.

Benefit Increases

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.

This means;

  • Deductions from Universal Credit and legacy benefits for benefit overpayments, Social Fund loans and Tax Credit debts managed by Debt Management Team will be suspended. This action will start straight away but an IT solution will need to be implemented to stop some of the deductions by Debt Management
  • Local Authorities (Councils) will stop referrals for Housing Benefit overpayments.
  • New Tax Credit debt from HMRC has already been suspended
  • Recovery from Estates will also be suspended.

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;

https://www.gov.uk/national-minimum-wage-rates

https://www.uceplus.co.uk/covid-19-news.html

https://www.rightsnet.org.uk/forums/viewthread/15842/?utm_source=Expert+advice&utm_campaign=5b15220dbe-EMAIL_CAMPAIGN_2020_03_31_03_43&utm_medium=email&utm_term=0_19bd99be06-5b15220dbe-283844401&mc_cid=5b15220dbe&mc_eid=32dce985d3#

https://mailchi.mp/9be7da8ca757/debt-update-covid-19-2?e=a3c52e6628

Benefits Update
All information is correct at 12noon on 30th March 2020.

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.

  • If a claim must be made for Universal Credit (UC) as a result of COVID-19 or self-isolation, you can access an advance payment without the current requirements of the Jobcentre. This means that you should be able to access an advance payment without going to the Jobcentre at the beginning of your claim.
  • The Government has announced that the rates of Universal Credit will go up temporarily for 12 months. This means that if you are over 25, you currently receive £317.82. This amount will increase by around £80 to £409.89. The earliest you will see the increase is 12th May 2020.
  • People claiming benefits do not need to attend Jobcentre appointments for three months from 19th March 2020. Face-to-face medical assessments for ESA, PIP, Universal Credit and IIDB are currently suspended. If you already have an appointment arranged, the assessment provider will contact you to discuss further.

Self-employment

  • For self-employed people who are currently receiving Universal Credit, the Minimum Income Floor (presumed amount of income after first 12 months of self-employment) will be temporarily lifted from 6th April 2020. This means that self-employed who are already affected by the Minimum Income Floor will need to recommence with uploading earnings each month to Universal Credit claim, even if earnings are £0.
  • You may be able to apply for self-employment Income Support Scheme if you have loss of earnings as a result of the COVID-19 outbreak. See below link for further information;
    https://www.businesssupport.gov.uk/self-employment-income-support-scheme/

Local Housing Allowance (LHA)

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.

https://www.gov.uk/government/publications/local-housing-allowance-lha-rates-applicable-from-april-2020-to-march-2021

What do I have to do to claim this amount?

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.

Benefit Cap

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.

Council Tax Hardship Fund

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;

https://www.understandinguniversalcredit.gov.uk/coronavirus/

https://www.birmingham.gov.uk/news/article/560/covid-19_affected_birmingham_city_council_services

https://www.socialwelfaretraining.co.uk/sites/default/files/files/Social%20Welfare%20Training%20Covid-19%20Coronavirus%20Benefit%20Briefing1%20-%20at%20a%20glance%20guide%20to%20Benefit%20Changes%20in%20the%20Spring%20Budget%202020%3A%20ongoing%20announcements.pdf?utm_source=phplist301&utm_medium=email&utm_content=HTML&utm_campaign=free+Covid19-+Coronavirus+Benefit+Briefings-+please+circulate

https://www.gov.uk/government/publications/local-housing-allowance-lha-rates-applicable-from-april-2020-to-march-2021

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