Working people in Scotland will face an income shock if the £20 increase to Universal Credit is not made permanent, Citizens Advice Scotland (CAS) warned on Monday 4th January.
In March 2020, the Chancellor announced a £20 per week increase to the value of Universal Credit. The move was a lifeline for people on the payment, but there has been no confirmation the uplift will be made permanent, leaving people facing a cut of over £1,000 per year in their incomes.
New data released by CAS reveals around 1 in 3 people who seek help from the Citizens Advice network on Universal Credit are in work.
Since April, the network issued over 6,500 pieces of advice about Universal Credit to clients who are in part-time or full-time work.
2020 also saw more homeowners than usual seek help from the CAB network with Universal Credit in addition to those in social or private sector tenancies.
Mortgage payers are not entitled to any support with housing costs until 39 weeks of claiming Universal Credit – for this group the current additional £20 a week will be making a vital contribution to covering housing costs. 28 per cent of new CAB clients seeking help with Universal Credit are owner occupiers
CAS is calling for action to both strengthen the Universal Credit system and ensure workers get a fair deal at work through adequate wages and secure hours.
CAS Social Justice spokesperson Nina Ballantyne said:
“Universal Credit is a key element of our social security system, and the decision last spring to increase the payment by £20 a week has been a lifeline for many people during the Covid-19 pandemic.
“It’s now essential it’s retained permanently, otherwise there is a real risk more people on Universal Credit will face an income crisis, unable to meet their living costs, while our shell shocked economy is still dealing with the fallout of the pandemic.
“Universal Credit should be a safety net for people on low incomes who are in and out of work, with 1 in 3 people who come to the Citizens Advice network for help with the benefit currently in work.
"Cutting the increase will remove around £1,000 per year and contribute to a crisis of in-work poverty when we need to build back better.
“We already face unacceptable levels of poverty in our society, this cut could see even more people swept under the tide. Keeping the £20 a week increase, boosting pay and delivering more secure work for people will grow the economy in a fair way.
“There is still time for the Government to keep this lifeline permanently, and give people the security of knowing that their incomes will be protected beyond March 2021.”