THOUSANDS of self-employed people on Universal Credit will keep a boost to their incomes until April after ministers extended the Minimum Income Floor.
DWP boss Thérèse Coffey confirmed the news about the six-in-one benefit to MPs today in a statement.
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She said: “After careful consideration of the ongoing public health situation and the national working environment, the current easement of the suspension of the Minimum Income Floor in Universal Credit that was due to expire on 12th November 2020 will be extended to the end of April 2021.”
The Minimum Income Floor assumes that self-employed workers earn at least 35 hours a week on the minimum wage, but if people earn below that then they won’t see the benefits topped up.
Self-employed people’s income tends to vary from month to month, and many are still struggling as a result of the ongoing pandemic.
It’s this threshold that was suspended during the coronavirus crisis given many workers have lost their jobs or face reduced hours or lower earnings.
Instead, these workers have their actual earnings, rather than assumed earnings, used to determine their benefit payments.
The move was part of a package of measures brought in by the DWP to help people through the pandemic.
It means self-employed people who rely on the benefits help won’t see their support cut if they don’t make up the hours they need in the following few months.
Around 750,000 people are on Universal Credit and self-employed, and 450,000 self-employed workers are affected by the MIF, according to research published by the Institute for Fiscal Studies (IFS) this month.
The think tank believes these workers lose an average of £3,200 a year due to MIF calculations, which are based on estimated average annual earnings rather than actual monthly income.
Martin Lewis warned about the quiet change to Universal Credit earlier this month – as it was meant to expire on November 12.
He urged people to write to their MPs to urge them to extend the support.
He warned that without it self-employed workers could be hit by a “huge sinkhole” – effectively a cut in their benefits.
What to do if you have problems claiming Universal Credit
IF you’re experiencing trouble applying for your Universal Credit, or the payments just don’t cover costs, here are your options:
- Apply for an advance – Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it’s a loan which means the repayments will be automatically deducted from your future Universal Credit payout.
- Alternative Payment Arrangements – If you’re falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you’re part of a couple.
- Budgeting Advance – You may be able to get help from the Government for emergency household costs of up to £348 if you’re single, £464 if you’re part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You’ll have to repay the advance through your regular Universal Credit payments. You’ll still have to repay the loan, even if you stop claiming for Universal Credit.
- Cut your Council Tax – You might be able to get a discount on your Council Tax or be entitled to Discretionary Housing Payments if your existing ones aren’t enough to cover your rent.
- Foodbanks – If you’re really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the Trussell Trust website.
The coronavirus pandemic has sparked the biggest surge in unemployment in a decade, according to the latest Office for National Statistics (ONS) figures with 1.52million people out of work.
Rishi Sunak and Ms Coffey are said to be considering whether to keep the £1000 a year Universal Credit boost in place beyond next April.
The Chancellor is said to be happy for it to continue if it’s needed, but no firm decisions have yet been made.
Last week The Sun revealed how Scots Tory boss Douglas Ross has demanded the PM extend the £20 a week lifeline for people past April.