What the Universal Credit change in April means for your money

Millions of people who have lost their jobs or had their working hours slashed have turned to Universal Credit to support them through the coronavirus pandemic.

With the new financial year starting on 6 April, the amounts claimants will receive are changing.

The standard allowance will go up, but it is not yet clear whether the coronavirus top-up introduced in 2020 will be extended, replaced with a one-off payment or scrapped completely.

If the coronavirus boost is removed, then the total sum that claimants receive will actually be lower overall each month.

The temporary hike is worth £1,040 a year, or £20 a week, and was billed as a temporary measure until the end of March 2021 by Chancellor Rishi Sunak.

It is expected that the Chancellor will give further information about what will happen to the top-up at the budget on 3 March.

Below are the new Universal Credit rates that will come into force for the new financial year starting 6 April, 2021.

Universal Credit rates 2021

Standard allowances

  • If you are single and under 25, your standard monthly allowance will rise to £257.33 from £256.05. But the new sum will be lower than the 2020 amount of £342.72 which includes the coronavirus boost
  • If you are single and 25 or over, your standard monthly allowance will rise to £324.84 from £323.22. But the new sum will be lower than the 2020 amount of £409.89 which includes the coronavirus boost
  • If you are joint claimants and you're both under 25, your standard monthly allowance will rise to £403.93 from £401.92. But the new sum will be lower than the 2020 amount of £488.59, which includes the coronavirus boost
  • If you are joint claimants and one or both of you are 25 or over, your standard monthly allowance will rise to £509.91 from £507.37. But the new sum will be lower than the 2020 amount of £594.04. which includes the coronavirus boost

  • Relaxing lockdown rules for the summer could cause 130k deaths, scientists warn

Extra amounts for children

  • If you have a first child born before 6 April, 2017, the additional amount you receive will go up to £282.50 from £281.25
  • If you have a child (born on or after 6 April, 2017) or a second child and subsequent child (where an exception or transitional provision applies), the additional amount you receive will go up to £237.08 from £235.83
  • If you have a disabled child, the lower rate addition to your payment will go up to £128.89 from £128.25 and the higher rate will rise to £402.41 from £400.29

Extra amount for limited capability for work

  • If you are considered to have limited capability for work, the additional amount you receive will go up to £128.89 from £128.25
  • If you are considered to have limited capability for work or work-related activity, the additional amount you receive will go up to £343.63 from £341.92

Extra amounts for childcare costs

If you are on Universal Credit and need help with childcare costs, you can get up to 85 per cent of it back:

  • If you are on UC and have one child, the maximum amount you can get for childcare costs remains unchanged at £646.35
  • If you are on UC and have two or more children, the maximum amount you can get for childcare costs remains unchanged at £1108.04

Extra amount for being a carer

  • If you are on Universal Credit and provide care for at least 35 hours a week for a severely disabled person who receives a disability-related benefit, the additional amount you receive in your UC will go up to £163.73 from £162.92

Housing costs

  • Non-dependants’ housing cost contributions will increase up from £75.15 to £75.53 (this is the sum taken off your UC)

Work allowance

  • If you are claiming UC and you have one or more dependent children or limited capability for work, the higher work allowance (no housing amount) will increase to £515 from £512
  • If you are claiming UC and you have one or more dependent children or limited capability for work, the lower work allowance will increase to £293 from £292

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