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Universal Credit Cut. A Letter to MP's

Sutton Voluntary Sector have sent a jointly signed letter to their MP's to detail exactly what the cut to Universal Credit will mean locally. They have suggested sharing it for anyone to adapt to their locality. Thank you to Steve from Sutton CAB for this:

Dear MP's Name

Universal Credit

As you will recall, we have previously exchanged correspondence and had a useful meeting about the ending of the Universal Credit Coronavirus uplift.  Over the last few weeks, there has been a lot of media coverage and commentary about the issue.  There is a lot of concern among staff and volunteers in Sutton voluntary sector organisations about how the ending of the uplift will impact on Sutton residents.  I am writing on behalf of the Sutton voluntary sector organisations listed at the bottom of this letter.  We all have concerns about the £20.00 per week reduction in Universal Credit; concerns that recently have been exacerbated by the impending increases in fuel costs and food price inflation.

We would be grateful if you would consider asking the government to reconsider its decision to end the uplift.  We hope that the information below, about the impact of the reduction in Sutton and the Universal Credit regulations will be helpful to you.

There were, according to official DWP figures, 15,493 Sutton households ‘on’ Universal Credit as of May 2021..

The government increased the Universal Credit ‘standard allowances’ in 2020 in response to the Coronavirus pandemic. A monthly ‘standard allowance’ is included in the calculation of every UC claim.  There are different standard allowances for people for single people, couples and people under and over the age 25. The standard allowances are, as you can see from this table, quite low.

We can illustrate the impact of the Universal Credit reduction with an example calculation. The client is an illustration, but the calculation is based on actual Universal Credit amounts.

The claimant is a lone parent with one daughter aged 14. Her current ‘maximum amount’ of UC for is £694.01 per month (plus housing costs). This maximum amount is comprised of the £411.51 standard allowance and the Child Amount of £282.50.

The claimant works part time. She earns £520 per month (net).  The calculation of her UC includes a ‘work allowance.’ She can earn £293 per month without her UC being reduced.  She has earnings of £227 over her work allowance. Every £1.00 of earnings over the work allowance reduces Universal Credit by £0.63 – i.e., earnings ‘taper’ UC entitlement at 63%.

The calculation of her UC entitlement compares her maximum UC - £694.01 (plus housing costs) with her income. She is treated as having income of £143.01 (63% of net earnings minus the work allowance).  She is therefore entitled to UC of £551 per month, plus housing costs. Child Benefit is paid in addition to Universal Credit.

From 6^th October, the claimants maximum Universal Credit is £607.34. This is comprised of £324.84 standard allowance and Child Amount of £282.50.  She will then be entitled to UC of £464.33 (plus housing costs).  This is a reduction of £86.67 per month.

As you can see from this example, Universal Credit is reduced by £0.63 for every £1.00 of earnings over the work allowance. Only people responsible for a child or people with a limited capability for work have a work allowance. Other people such as those without dependent children and carers (who do not otherwise qualify) do not have a work allowance.

Most claimants cannot therefore make up the £86.67 per month shortfall by working additional hours.  If the claimant in the above example increased her working hours and therefore her net pay by £86.00 per month, she would lose £54.18 from her Universal Credit, meaning that she would, despite earning £86 more per month, only gain £31.82 per month - so the claimant can clearly not make up the £86 per month reduction in benefit by earning an additional £86 per month.

Many people in receipt of Universal Credit do not have any realistic way of making up for the £86 per month reduction at all. Some 60% of people in receipt of Universal Credit are not in employment. People may for example have a limited capability for work, be caring for a severely disabled child or adult or be a lone parent with a young child.  Some people in receipt of Universal Credit are working full time (and need the benefit to help with rent), so cannot further increase hours and therefore cannot, in any way, make up the reduction.  We would like to stress, that even if people can increase their earnings, those earnings will reduce Universal Credit by £0.63 for every £1.00 of earnings.

You can see, from the above table, that the Universal Credit standard allowances are quite modest. The standard allowances are the basic entitlements for single people or couples.  Although these allowances are not designed to cover rent or council tax and claimants may also receive amounts for children, caring responsibilities and having a ‘limited capability for work- and work-related activity,’ the amounts are very low when compared to the ‘Standard Financial Statement’ ‘Trigger figures.’

Debt advisers, such as the Citizens Advice Sutton debt team use a Standard Financial Statement.  The Standard Financial Statement includes ‘trigger figures’ The trigger figures are pre-agreed levels for certain areas of discretionary household expenditure. The trigger figures help identify levels of monthly expenditure deemed reasonable when completing the statement. Debt advisers do not need to explain the financial statement to creditors unless the trigger figures are exceeded.

The Universal Credit amounts are inadequate to allow claimants even the trigger figure amounts of discretionary expenditure.  The Standard Financial Statement ‘allows’ a single adult to spend a total of £666 per month on ‘discretionary’ items – communications / leisure and groceries etc.  However, the Universal Credit Standard Allowance for a single adult (over 25) is currently only £411.51 per month and is due to decrease to only £324.84 per month.

The Standard Financial Statement ‘allows’ a single adult with a dependent child to spend a total of £885 per month on ‘discretionary’ items. However, a single parent with one child could receive Universal Credit of no more than £648.59 per month (due to decrease to only £562.92 per month) plus Child Benefit of £21.15 per week. Even including Child Benefit, the family’s income would total only £740.24 per month, decreasing to only £654.57 per month in October.

Furthermore, many people in receipt of Universal Credit have a shortfall between their rent and the amount of housing costs included in their UC calculation – the Local Housing Allowance only covers the 30^th percentile of local rents.

A very high proportion of Citizens Advice Sutton debt advice clients are in receipt of Universal Credit and have a ‘deficit budget’ – in other words, their incomes are inadequate to cover even essential expenditure such as rent, utilities and food.

We understand that the government introduced the £20 per week uplift as a temporary measure, in response to the pandemic.  However, many people need to claim Universal Credit for the long term. As we have said above approximately 40% of Universal Credit claimants are in employment and need Universal Credit to help pay rent. Many of these people have not seen any improvement in their situation since the introduction of the uplift – in fact their financial positions may have deteriorated due to rising food costs and will deteriorate further with increases in fuel costs. The Citizens Advice Sutton debt team has seen an increase in demand in recent months.

We hope that this information is helpful to you. We would be grateful if you would ask the government to reconsider their decision to end the Universal Credit uplift – a decision that will have significant adverse financial consequences for over 15,000 London Borough of Sutton households.

Yours sincerely

by Liza Dresner

Blog Post from Alketa Hystuma of The Shpresa Programme  

The Shpresa Programme works with Albanian nationals in the UK who have mainly migrated from Italy, Greece and Bulgaria. Their dual nationalities make them EU citizens. 

The 23rd of June 2016 marked a seismic change for a country, which for 47 years was a member state of the European Union and its predecessor, the European Communities (EC). Assisting with the completion of online applications has been challenging since the Brexit process as many service users have difficulties with the language or  have no English skills. Others have difficulties using computers and online services, like not understand the confirmation emails or calls they receive to provide further evidences as part of their EUSS applications. Many of the people we work with have completed wrong applications, equally many are not aware of their rights on public funds including housing and homelessness assistance. A general problem is that many do not yet fully understand what Brexit means and why having a Settled or Pre-Settled status is important in protect their future immigration status, as well as their rights  and entitlements to family reunions, work, benefits, and access to the NHS.

Since COVID-19 we witnessed a rise of applications for universal credit. We’ve noticed indirect discrimination when an EU citizen has only arrived to the UK a few months ago and is working a limited number of hours per week. Most of the claims made resulted in refusals, not once, but 2-3 times. We have previously requested reviews and have appealed decisions to highlight that the EU citizens have the same rights as a British passport holder or someone with refugee status.

Our other immense concern is for groups or people who are isolated and have no contact with us or any other organisations who promote and do campaign work around the EU Settlement Scheme. If vulnerable members of our community fail to apply before June 30 2021 their immigration status will inevitably be compromised, no matter how long they have resided in the UK.

Our partnership with New Europeans UK started in September last year. Since then, we have jointly delivered more than 5 events and information sessions tailored for the Albanian community. New Europeans UK have advised and trained our staff, as well as a cohort of our Albanian speaking volunteers. We have found a valuable partner that is keen to hear the challenges our service users face and offer free professional advice.

It has been a highlight of Shpresa’s activity, to work intensively with the many EU citizens part of the Albanian community in the UK and raise awareness of their rights in the UK during and after Brexit. With the continuous support from New Europeans UK, the Shpresa Programme has campaigned extensively through social media, our digital work and information sessions, as well through our advocacy “Be the change” project. This will ensure effective support continues to reach our community, so that no EU citizen gets left behind. We will continue to assist anyone who needs help to integrate and become self-sufficient once they chose to make the UK their home.

Shpresa Programme

www.shpresaprogramme.com

020 7511 1586

by Liza Dresner

No Child Left Behind – new website! Blog by Mari Burton from the NEU.

New data released by the End Child Poverty collation has revealed that even before the pandemic child poverty levels had risen to 4.3 million children – an increase of 200,000 on the previous year, This means that across the UK, 31 per cent of children are now growing up trapped in poverty – the equivalent of 9 pupils in every class of 30.

It doesn’t have to be this way. The Government must take urgent action to right this wrong.

The National Education Union have launched a brand new campaign website which allows visitors to search for the latest child poverty statistics for their area, simply by typing in their postcode. Visitors to the site are asked to email their local MP, asking them to show their commitment to tackling poverty in their area by signing the NEU’s anti child poverty pledge. The pledge reads:

As a member of Parliament, I pledge to do everything in my power so that no child is left behind in East Worthing and Shoreham:

• I call for the development of a cross-Government strategy to eradicate the poverty faced by the 4.3 million children currently growing up trapped in poverty.
• I will use my vote and voice in Parliament to try to stop an expected 730,000 more children being plunged into poverty by 2024.

We must value and invest in all our children, so they are supported to learn, succeed, and go on to have bright futures.

Poverty is not inevitable – with enough political will we can eradicate it. At the time of writing 91 MPs from across the parties had committed to do everything in their power to leave no child behind – check if yours has signed up by visiting nochildleftbehind.org.uk and supporting our campaign!

by Liza Dresner