Advice NI fears Universal Credit chaos leading up to Christmas

Despite the Government announcement on Friday about a different Job Support Scheme to follow the current furlough scheme, we in Advice NI remain concerned that thousands of employees across Northern Ireland could see their jobs under threat and so face the daunting prospect of claiming UC.
In addition, the reinstatement of the ‘Minimum Income Floor’ for self-employed claimants in November is likely to deprive many of much needed financial support.

Advice NI is calling on officials and Ministers both in the Department for Communities, and the Department for Work & Pensions in Great Britain, to clarify when people (who unfortunately are not assisted by the Government’s new scheme and so lose their job) should claim Universal Credit in order to receive a payment for their first Assessment Period and so not be left penniless at Christmas.

In addition, Advice NI is calling for an extension to the suspension of the Minimum Income Floor for the entire 2020/21 financial year, as is the case for other Covid-19 measures within Universal Credit, for example the £20 uplift.

Kevin Higgins, Advice NI Head of Policy, said:
 
“I am deeply concerned about the poverty and destitution that could potentially face many people this Christmas.

“Firstly, if we take the end of furlough, many thousands of people may find their jobs at risk and face into a redundancy situation. They will have to turn to the social security system for support, and for many, this will mean having to claim Universal Credit which is based on a monthly Assessment Period, hence the much-publicised concerns about the 5 week wait for the first payment. However, the biggest fear is associated with when these people claim Universal Credit.

“For example, if they claim Universal Credit and then afterwards receive their final furlough payment this will be counted as income in their first Assessment Period and will likely mean that they will receive little or no Universal Credit payment for the first Assessment Period; and have to wait until after the second Assessment Period to receive a full Universal Credit payment which will most likely be after Christmas.”

“Secondly, if we take the ‘Minimum Income Floor’, during the Covid-19 pandemic self-employed people have been able to claim and get paid Universal Credit as this assumed level of earnings has not been taken into account in the calculations. However, this measure is due to end in November, meaning that self-employed people, regardless of their actual income, will be treated as having an assumed level of earnings equivalent to the National Minimum Wage depending on the age of the claimant (Eg for someone 25 or over this would be £305.20 per week or £1,220.80 for the monthly Assessment Period). There is no doubt that this will significantly reduce or even eliminate any Universal Credit payment for self-employed claimants.”

“Advice NI therefore urges both the Department for Communities and the Department for Work & Pensions in Great Britain to provide clarity on both the timing for a Universal Credit claim and an extension to the suspension of the Minimum Income Floor so that people are not left penniless during the holiday period.”

If you are worried about furlough ending, Universal Credit or any social security issue, please contact Advice NI on 0800 915 4604 or visit our website www.adviceni.net.

Notes:
  1. For further information contact Kevin Higgins, Head of Policy, Advice NI on 028 9064 5919 / 07743496957. Please note Kevin is only available for Zoom and telephone interviews at this time.
  2. Advice NI is the umbrella body for the Independent Advice Network in Northern Ireland and its members dealt with 404,594 enquiries in 2018/19, the majority being social security benefits related. For more information log on to www.adviceni.net.
  3. NI Direct - Universal Credit information 
  4. Minimum Income Floor relevant legislation 
  5. Advice NI Briefing Paper: ‘Universal Credit & Redundancy’ August 2020 
  6. Parliamentary Question on the issue
  7. Redundancy Payments: Whether paid as a lump sum or over a given period, redundancy payments count as capital for UC purposes and not as earnings. So if a redundancy payment takes a claimant’s savings over £16,000, they would no longer be entitled to UC from the beginning of the monthly assessment period in which they receive this payment. If it takes their savings to between £6,000 and £16,000 then the amount of UC they are entitled to will reduce due to the ‘tariff income’ that these savings are deemed to generate. If your capital is below £6,000, universal credit is unaffected.
  8. ANNOUNCEMENT Friday 9th October: Employees who work for UK firms forced to shut by law because of coronavirus restrictions will get two-thirds of their wages paid for by the government.
    Chancellor Rishi Sunak said it was an "expansion" of the Job Support Scheme, which begins on 1 November and will be available for six months.
    A Treasury source says it could roughly cost hundreds of millions a month.
    The chancellor described Friday's announcement as "a very different scheme to what we've had before, this is not a universal approach, this is an expansion of the job support scheme specifically for those people who are in businesses that will be formally or legally asked to close".
  9. Advice NI’s new single helpline number for all our advice services is 0800 915 4604