Coronavirus: 'One click on and we have been worse off' after common credit score claim
Some individuals making use of for universal credit score for the first time have found themselves worse off after dropping their present profit funds.
The system means legacy advantages reminiscent of tax credits are stopped when somebody applies for common credit score, even if the declare is finally rejected.
One applicant stated his family was worse off "on the click on of a button".
Universal credit score claims have soared amid the coronavirus outbreak, with the subsequent figures revealed on Tuesday.
Individuals who have seen a sudden drop in revenue, for quite a lot of reasons, can declare universal credit score. In lots of instances this can depart them higher off than they might otherwise have been.
Nevertheless, some - commonly these with savings - might find they're ineligible for common credit score. Even so, present benefit funds are stopped as soon as the appliance is made.
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- From being an MP to claiming universal credit
The difficulty existed before the coronavirus outbreak, and is being legally challenged.
Now, with a surge of recent claims from people who have misplaced jobs or revenue, campaigners are urging individuals to seek advice earlier than applying. The federal government has posted a video on social media concerning the rule.
'Left without help once we most want it'
Jon Fitzgerald, 52, is a freelance promoting copywriter, and his wife Vicky had solely just arrange her inside design enterprise. Their irregular revenue meant they have been already receiving about £400 a month in tax credit.
Work dried up as coronavirus unfold, so Mr Fitzgerald began a claim for common credit.
When the appliance was submitted, a cease discover was despatched to cancel their tax credit score award, regardless that they didn't full the declare once they realised they might be unsuccessful.
But their savings meant they have been ineligible for universal credit and their previous tax credit couldn't be reinstated.
"We've got now lost properly over half our present monthly revenue at the press of a button," Mr Fitzgerald stated.
"We took the government recommendation in late March to use for universal credit score to assist us via [but] we have now been left with out monetary help at a time once we most want it."
He stated they might cope financially in the short-term, however feared others in an identical state of affairs can be finding it robust.
"Though we are ok in the mean time, I've to maintain reminding myself that it's because we've frozen loans and lowered our payments on utilities. These allowances will end in July," he stated.
"Who knows how long the fall-out shall be from lockdown when it comes to work alternatives."
Victoria Todd, head of the Low Incomes Tax Reform Group, stated this "vital" concern had been "highlighted additional by the present state of affairs".
Some 1.8 million individuals have utilized for common credit score because the authorities suggested individuals to stay at residence because of coronavirus, in response to the newest figures.
The quantity is predicted to be even higher when up to date knowledge is revealed on Tuesday.
Mrs Todd burdened that many individuals can be higher off underneath universal credit, but stated the principles on legacy benefits ought to be made clear at each opportunity.
The place to go for help
- Benefits calculators - verify earlier than you make a claim
- Turn2Us - a national charity offering benefits info, grants and help
- Citizens Advice - help with benefits, shopper points and different work and financial matters
The benefits which might be replaced by universal credit score, and so stop when a universal credit declare is made, are youngster tax credits, working tax credit, housing benefit, income-based jobseeker's allowance, revenue help, and income-related employment help allowance.
Mrs Todd stated these might add up to "fairly sizeable amounts" and they might be at risk from an unsuccessful common credit software.
Individuals who have financial savings might be caught out as a result of there was no restrict on the quantity someone holds in capital when receiving tax credits, however there was with common credit score, she stated.
She urged anyone considering of applying for universal credit to seek recommendation from charities similar to Citizens Recommendation earlier than beginning a claim.
Work and Pensions Secretary Therese Coffey just lately advised MPs she was "actively wanting" into this state of affairs to see what might be achieved.
In the Commons, the minister for welfare delivery, Will Quince, stated: "I am taking a look at knowledge and exploring choices."
He stated the division had been working with HM Revenue and Customs, which administers tax credit, to encourage individuals to verify their eligibility before making a declare and "be sure that tax credit score claimants perceive that once they have claimed UC, their tax credit will finish, they usually can't return to legacy benefits".
In a number of, very slender, conditions, corresponding to individuals with severe disabilities, a tax credit declare might be made again.