New Universal Credit claimants ‘likely to get less than they hoped’

NEW benefit claimants are likely to receive less than they had hoped, the Department for Work and Pensions has said.

Neil Couling, director general for Universal Credit, advised a “little bit of caution”, saying people may be “confused” over what they were entitled to, as “they have not had experience of how Universal Credit works”.

There were fears new claimants would take home much less than anticipated because they received redundancy pay in the past month or declared earnings from self-employment.

Universal Credit is subject to the taper rate, which means that for every £1 earned over a certain allowance, 63p is deducted from credit payments.

Torsten Bell, of the Resolution Foundation, said: “If people have received income within the assessment period for Universal Credit, their initial payment could be a lot lower than if they’d been on a benefit calculator and worked out what they’re entitled to. I hope people are being advised of this when they apply, so it’s not a shock.”

A spokesman for the department conceded people were likely to “make assumptions” on their entitlement and could be “surprised that it’s not as much as they were expecting”.

The first 270,000 to put in claims in the first week of the lockdown were able to find out in their online account yesterday how much they would be paid next Wednesday. There have been 1.4 million new applications for Universal Credit, suggesting the annual cost to the Treasury could be an extra £9.6 billion.

It follows mounting fears that payments from the job retention scheme will not reach businesses before April’s payroll. It covers 80 per cent of salaries, capped at £2,500 per month. Rishi Sunak,

the Chancellor, said firms would receive the money “before the end of the month if everything goes to plan”.

Yesterday it was announced many more employees may receive support after the eligibility date was extended from Feb 28 to March 19. Meanwhile, Shelter, the housing charity, said more tenants were likely to struggle to pay their rents between now and June.