Universal Credit claimants are expected to get a £20 a week boost to payments over the next six months under government plans.
Chancellor Rishi Sunak is expected to confirm the extension in the Budget announcement on Wednesday (3 March).
A temporary rise
The extra £20 payment was launched last year to help Universal Credit claimants who were struggling due to the Covid-19 pandemic.
The payment boost was due to be scrapped at the end of March, but MPs have campaigned for it to continue and if given the go-ahead, will continue to be offered for a temporary period of six months.
Mr Sunak is understood to have rejected demands to agree to a year-long extension of the increase.
A government source told the Daily Telegraph: "This was a temporary increase to deal with the crisis and has done that job.
"So it makes sense to continue it as we reopen, but supporting people into jobs will be the priority come the autumn."
A group of backbench MPs have said that a six month extension of the payment boost is too short, but the Chancellor argued that dramatic measures would be needed to cover the cost for a longer period, such as a rise in fuel duty or income tax.
The Chancellor also considered replacing the £20 boost with a one off £500 payment, equal to six months worth of cash, to everyone who is entitled to it, although this was dismissed by Work and Pensions Secretary Therese Coffey.
The Treasury has been reluctant to keep the top-up as it is estimated to cost taxpayers £6billion per year, and was only introduced as a temporary measure in March 2020 to support the poorest households through the pandemic.
The extension of the boost has not yet been formally approved, although it is expected to be confirmed in next week’s Budget.
Who is eligible for Universal Credit?
To be eligible to claim Universal Credit, you need to meet one of the following criteria:
- you’re on a low income or unemployed
- you’re 18 or over (there are some exceptions if you’re 16 to 17)
- you’re under State Pension age (or your partner is)
- you and your partner have £16,000 or less in savings between you
- you live in the UK
The number of children you have does not affect your eligibility for Universal Credit, but it may affect how much you get.
If you live with your partner, their income and savings will be taken into account – even if they are not eligible for Universal Credit.
You cannot claim Universal Credit if you receive, or are entitled to, the severe disability premium.