Universal Credit: DWP demanded to address rule suspension as deadline ‘rapidly’ approaches

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Universal Credit claimants who work for themselves are usually assessed through minimum income floor rules, which involve the DWP working out payments by comparing a claimant’s real earnings with how much they expect them to earn each month. However, as coronavirus emerged the Government halted the use of the minimum income floor and instead based payments entirely off a claimant’s actual earnings.

These changes were to be temporary and under the current schedule, the suspension will end by November 13.

If this goes ahead, many fear thousands of claimants could be affected and see their income drop as winter approaches.

Thérèse Coffey, the Secretary of State for Work and Pensions was recently questioned on the issue in Parliament on the DWPs plans but her response didn’t seem to confirm or deny any changes.

As she said: “That policy is still under review.

“This is a matter of discussion, because the regulation will come to an end and I think it’s important to recognise we have different measures happening around different parts of the country.”

This lack of clarity ended up catching the attention of Stephen Timms, the Chair of the Work and Pensions Committee.

In a letter released today, Stephen asked Thérèse for an update on the government’s plans for the minimum income floor rules, noting the DWP detailed in September that they were looking “very carefully” at extending the suspension.

Stephen asked specifically for a date in which the DWP will announce a decision, while noting the government’s webpages have made a small yet substantial change in how the wording is framed.

As Stephen explained: “I also note that the Government’s guidance for claimants has changed since our evidence session.

“Before that session, we noted that the ‘Understanding Universal Credit’ webpages advised claimants that: ‘The Minimum Income Floor has been temporarily relaxed during the coronavirus outbreak. This change applies to all Universal Credit claimants and will last for the duration of the outbreak.’

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“The same section now reads: ‘The Minimum Income Floor has been temporarily relaxed during the coronavirus outbreak. This change applies to all Universal Credit claimants. You will be informed before the Minimum Income Floor is reinstated for you.’

Additionally, Stephen concluded the letter with the following two questions:

  • Should we understand from this that it is no longer the Government’s policy that the Minimum Income Floor will be suspended for the duration of the outbreak? If so, when did you make that decision, and on what grounds?
  • Please could you share with the Committee a copy of any guidance given to Work Coaches to support them in advising Universal Credit claimants who may be subject to the Minimum Income Floor when it is reinstated?

As the end of the suspension is approaching, Stephen asked for the response to come through as a matter of urgency, with a deadline set for November 3.

Universal Credit was not the only element of government support to see changes as the pandemic rolled on.

Struggling self-employed people may be eligible for the Self-Employment Income Support Scheme (SEISS) which provides taxable grants to keep people afloat.

It’s possible to receive support from both of these set ups but the grants may reduce or stop Universal Credit payments all together.

To be eligible for Universal Credit at all, a claimant must be:

  • On a low income or out of work
  • Aged between 18 and state pension age
  • Have less than £16,000 in savings
  • Living in the UK

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