Big Brexit and Covid-19 changes to Universal Credit, benefits and pensions are coming into force this year.
The Department of Work and Pensions (DWP) has confirmed a raft of amendments to the social security system as a result of the end of Britain’s union with the EU.
There have already been a number of implications to welfare payments in the UK as a result of Covid-19, including Universal Credit and Child benefit.
But on New Year’s Eve, at 11pm, the Brexit transition period finally took place. The move has had several ramifications on things like travel, border checks, banking and more.
Now the DWP has unveiled a number of changes to its system, saying it makes it fairer for everyone.
The system is already changing in the UK after the benefits freeze ended in April last year after being implemented in 2016. The freeze meant benefit levels had not risen in line with inflation for at least four years.
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People on Universal Credit and the benefits it is replacing could have lost as much as £1,800 a year while the cuts were in place, figures suggest. In addition, Universal Credit was given an additional boost of £1,040 a year – that’s around £20 a week or £80 a month – because of the impact of the Covid-19 coronavirus crisis.
A similar Covid boost was given to those on Working Tax Credits, with the basic element going up by £1,045 per year.
Here are the changes to Universal Credit, benefits, pensions, winter fuel payments and more as a result of Brexit and Covid-19 you can expect this year.
Universal Credit Brexit benefits ban
A benefits ban is being imposed to prevent anyone coming to the UK from claiming income-related payouts such as Universal Credit for five years, reports BirminghamLive.
EU migrants who come to Britain from January 1 will be treated the same as non-EU migrants. EU nationals already living in Britain and those from Ireland will not be affected.
Up until December 31, when the transition period ended, EU migrants could claim income-related benefits within their first year of coming here. But leaving the EU has enabled the Government to change the rules so all migrants arriving from January 1 are treated the same.
Work and Pensions Secretary Thérèse Coffey said it is “fair and right” people living here from abroad should pay into the tax system for an amount of time before they can claim benefits.
“We have delivered on our Manifesto commitment to restore fairness in access to our welfare system, by treating EU and non-EU migrants equally,” she said.
“It is both right and fair that people making the UK their home should pay into the tax system for a reasonable period of time before they can access the benefit system.”
In April 2021, Universal Credit payments will rise as follows for the 2021/2022 financial year:
- For those single and aged under 25, standard allowance per month will rise from £256.05 to £257.33 (this is lower than the 2020 amount of £342.72 which includes the coronavirus boost)
- For those single and aged 25 or over, standard allowance per month will rise from £323.22 to £324.84 (this is lower than the 2020 amount of £409.89 which includes the coronavirus boost)
- For joint claimants both under 25, standard allowance per month will rise from £401.92 to £403.93 (this is is lower than the 2020 amount of £488.59. which includes the coronavirus boost)
- For joint claimants where one or both are 25 or over, standard allowance per month will rise from £507.37 to £509.91 (this is lower than the 2020 amount of £594.04. which includes the coronavirus boost)
Extra amounts for children
- For those with a first child born before April 6, 2017, the extra amount is going up from £281.25 to £282.50
- For those with a child (born on or after April 6, 2017) or second child and subsequent child (where an exception or transitional provision applies), the extra amount is going up from £235.83 to £237.08
- For those with a disabled child, the lower rate of the additional payment is going up from £128.25 to £128.89 and the higher rate from £400.29 to £402.12
Extra amount for limited capability for work
- For those deemed to have limited capability for work, the extra amount is going up from £128.25 to £128.89
- For those deemed to have limited capability for work or work-related activity, the extra amount is going up from £341.92 to £343.63
Extra amounts for childcare costs
Those on UC who need help with childcare costs can get up to 85 per cent of it back:
- For those on UC with one child, the maximum amount given for childcare costs is staying the same at £646.35
- For those on UC with two or more children, the maximum amount given for childcare costs is staying the same at £1108.04
Extra amount for being a carer
- If you are on UC and provide care for at least 35 hours a week for a severely disabled person who receives a disability-related benefit, the extra amount you receive in your UC is going up from £162.92 to £163.73
- Non-dependants’ housing cost contributions are going up from £75.15 to £75.53 (this is the amount taken off your UC)
Benefits help site EntitledTo explains: “If you share your home with someone who is not your partner or a dependent child, this may affect your benefits.
“Non-dependants are often people like grown-up sons and daughters or elderly relatives. A non-dependant is a person who lives with you but is not liable for paying rent under a formal arrangement.
“If you live with a non-dependant your Housing Benefit, Universal Credit Housing Element and Council Tax Reduction may be reduced through rules on non-dependant deductions.”
- The higher work allowance (no housing amount) for someone claiming UC with one or more dependent children or limited capability for work is going up from £512 to £515
- The lower work allowance for someone claiming UC with one or more dependent children or limited capability for work is going up from £292 to £293
Amounts can be taken out of your Universal Credit to pay back arrears owed for council tax, energy or water bills, rent, court fines, compensation orders, or child maintenance.
For third party deductions where five per cent of the standard allowance is taken, the amount is going up as follows:
- For those who are single and under 25, the deduction is going up from £12.80 to £12.87
- For those who are single and aged 25 or over, the deduction is going up from £16.16 to £16.24
- For joint claimants both under 25, the deduction is going up from £20.10 to £20.20
- For joint claimants where one or both are 25 or over, the deduction is going up from £25.37 to £25.50
Deductions to pay fines are staying the same at £108.35
Child maintenance deductions are staying the same at £36.40
For deductions to repay rent and service charges where a minimum 10 per cent of the standard allowance is taken up to a maximum of 20 per cent, the amounts are going up as follows:
- For those who are single and under 25, the minimum deduction is going up from £25.61 to £25.73 and the maximum deduction is going up from £51.21 to £51.47
- For those who are single and aged 25 or over, the minimum deduction is going up from £32.32 to £32.48 and the maximum deduction is going up from £64.64 to £64.97
- For joint claimants both under 25, the minimum deduction is going up from £40.19 to £40.39 and the maximum deduction is going up from £80.38 to £80.79
- For joint claimants where one or both are 25 or over, the minimum deduction is going up from £50.74 to £50.99 and the maximum deduction is going up from to £101.47 to £101.98
Fraud overpayments, recoverable hardship payments and administrative penalties will go up as follows:
- For those who are single and under 25, the amount deducted is going up from £76.82 to £77.20
- For those who are single and aged 25 or over, the amount deducted is going up from £96.97 to £97.45
- For joint claimants both under 25, the amount deducted is going up from £120.58 to £121.18
- For joint claimants where one or both are 25 or over, the amount deducted is going up from £152.21 to £152.97
For other overpayments, and civil penalties, the amounts taken will go up as follows:
- For those who are single and under 25, the amount deducted is going up from £38.41 to £38.60
- For those who are single and aged 25 or over, the amount deducted is going up from £48.48 to £48.73
- For joint claimants both under 25, the amount deducted is going up from £60.29 to £60.59
- For joint claimants where one or both are 25 or over, the amount deducted is going up from £76.11 to £76.49
Child Benefit stopped for EU migrants
EU migrants who come to the UK after January 1 will also not be able to apply for Child Benefit for five years.
And, in a major change to the rules, they will no longer be eligible to claim Child Benefit for any of their children who still live outside the UK.
It won’t affect anyone from the EU who is already living in the UK.
Those starting a claim for Universal Credit can get advances to tide them over during the five-week wait for the first payment. An advance is an upfront loan up to the value of the first Universal Credit amount a person is expected to receive.
Advances have to be paid back in instalments from future Universal Credit over the next 12 months – but that repayment period is set to increase to 24 months from October 2021.
At the same time, the maximum level of deductions from a person’s Universal Credit will reduce from 30 per cent to 25 per cent.
However, in the meantime the 30 per cent maximum deduction will go up in April to take account of the increase in Universal Credit.
- For those who are single and under 25, the maximum deduction of 30 per cent will rise in April 2021 from £76.82 to £77.20 – and then the rate drops to 25 per cent from October, meaning your deduction would fall to £64.33 by our calculations
- For those who are single and aged 25 or over, the maximum deduction of 30 per cent will rise in April 2021 from £96.97 to £97.45 – and then the rate drops to 25 per cent from October, meaning your deduction would fall to £81.21 by our calculations
- For joint claimants both under 25, the maximum deduction of 30 per cent will rise in April 2021 from £120.58 to £121.18 – and then the rate drops to 25 per cent from October, meaning your deduction would fall to £100.98 by our calculations
- For joint claimants both under 25, the maximum deduction of 30 per cent will rise in April 2021 from £152.21 to £152.97 – and then the rate drops to 25 per cent from October, meaning your deduction would fall to £127.48 by our calculations
Winter Fuel Payments stopped
The DWP said that EU migrants who come to the UK after January 1 won’t qualify for Winter Fuel Payments.
These are automatic payments of between £100 and £300 towards heating bills for those born on or before October 5, 1954.
Normally, recipients must also have lived in the UK for at least one day during a ‘qualifying week’ each year (for 2020 it was September 21 to 27).
Before Brexit, the Winter Fuel Payment could also be given to those from the EU who were not here during the qualifying week but have “a genuine and sufficient link to the UK” – this could include having lived or worked in the UK, or having family in the UK.
But post-Brexit, the payment won’t be given to EU residents who start a new life in Britain.
Who can get Universal Credit
Whether you can claim Universal Credit depends on your circumstances and where you live.
You can apply for Universal Credit if you are on a low income or unemployed.
You will usually only be able to claim Universal Credit if you are aged 18 or over, but some people aged 16 or 17 can get it, depending on their circumstances.
And you usually won’t be able to claim Universal Credit if you’re in full-time education or training, but people with certain circumstances can still apply.
Read the detailed guidance on eligibility and Universal Credit and students to find out more.
You can use a benefits calculator to help you understand what benefits you could get. You will be asked to enter information about your circumstances, and it will tell you which benefits you might be able to apply for. One of those might be Universal Credit.
Where you live
The Citizens Advice eligibility checker will tell you if you live in an area where you can claim Universal Credit. Using this link will take you to the Citizens Advice website.
Universal Credit is being introduced in stages, so even if you can’t claim Universal Credit now, it may become available in your area in the future.
If you want to go straight to making a claim for Universal Credit visit gov.uk/universal-credit
What Universal Credit replaces
Universal Credit replaces:
- Child Tax Credit
- Housing Benefit
- Income Support
- income-based Jobseeker’s Allowance (JSA)
- income-related Employment and Support Allowance (ESA)
- Working Tax Credit
If you are already claiming these benefits or tax credits you don’t need to do anything now.
The Department for Work and Pensions will get in touch with you before there are any changes to your benefits or tax credits.
If you receive these benefits or tax credits and your circumstances change in a way that would have meant you would make a new claim to one of these benefits, you will now need to claim Universal Credit instead.
If you are receiving any of these benefits or tax credits they will stop if you make a Universal Credit claim.
If you are getting tax credits you can still choose to apply for Universal Credit, depending on your circumstances, but if you do all your benefits that Universal Credit replaces will stop.
State Pension rights retained
The DWP says that you can carry on receiving your UK State Pension if you move to live in the European Union (EU), EEA (European Economic Area) or Switzerland and you can still claim your UK State Pension from these countries.
The EEA consists of the member states of the EU and three countries of the European Free Trade Association (EFTA) (Iceland, Liechtenstein and Norway; excluding Switzerland).
Your UK State Pension will be increased each year in the EU in line with the rate paid in the UK.
You can also count relevant social security contributions made in EU countries to meet the qualifying conditions for a UK State Pension.
This guidance is for UK nationals, but the same rules on the State Pension apply to everyone regardless of nationality and when you moved.
The Government says Brexit should not have any effect on UK workplace pensions paid to ex-pats.
Your bank should contact you if they need to change the way you receive your work pension because the UK has left the EU.
Benefits changes if moving to EU
If you are moving, or thinking of moving, from Britain to an EU, EEA country or Switzerland from January 1, the rules on which UK benefits can be paid in those countries have changed.
If you are eligible, the following benefits and payments can be paid while you are living in the EU:
Statutory Maternity Pay and Statutory Paternity Pay
Bereavement Support Payment and other bereavement benefits
Industrial injuries benefits
Statutory Sick Pay
Social security contributions made when you are working in an EU country can help you qualify for some UK benefits during any periods you are back in the UK – including New Style Jobseeker’s Allowance and New Style Employment and Support Allowance.
For further information, see the Government guidance on where you pay your social security contributions when working in the EU.
Rules are still being updated for those permanently moving to Norway, Switzerland, Iceland or Liechtenstein.
You will still be able to claim some benefits abroad for a limited time if you move temporarily, such as for medical treatment, as long as you meet the criteria.
Brits already living in the EU, EEA or Switzerland by December 31, 2020, can keep getting any UK benefits they already receive as long as they still meet eligibility requirements.
They may also be able make new claims for some UK benefits from January 1 but could be asked to provide evidence they had been living abroad by December 31, 2020.
Review of repayment periods and deduction limits
In a new report published earlier this year, MPs sitting on the Work and Pensions Committee asked for a review of repayment periods and deduction limits.
They want the 2021 changes to be be brought forward from October 2021 to “no later than April 2021” because of a “likely increase in claimants over this winter.”
And the committee says the maximum level of deductions should be brought down further to 10 per cent.
At present there are some circumstances, such as where a claimant has rent or fuel arrears, or benefit sanctions, where the DWP can dock more than the maximum 30 per cent of someone’s UC.
The committee says this must not be allowed to continue.
It further recommended that anyone claiming an advance should be given the option of having housing costs paid directly to their landlord so they are not at risk of falling into arrears or eviction as a result.
-- to www.plymouthherald.co.uk