Covid-19: Increased support available through tax credits and universal credits

While the government announced measures to support the self-employed through the current crisis on 26 March 2020, it has made some changes to the support available through working tax credits and universal credit which will provide some help to the self-employed.

Increases in the standard rates

The standard rate for universal credit and tax credits will both increase by £20 a week for one year from 6 April 2020. This increase is in addition to the increase already announced, meaning claimants will be up to £1,040 better off.

The standard monthly allowances for universal credit are:

CIRCUMSTANCES

MONTHLY STANDARD ALLOWANCE 2020/21

MONTHLY STANDARD ALLOWANCE 2019/20

Single and under 25

£342.72

£251.77

Single and 25 or over

£409.89

£317.82

Couple both under 25

£488.59

£395.20

Couple and either person is 25 or over

£594.04

£498.89

Support for rental payments

The government has significantly increased the support available for payments of rent by those claiming universal credits. From April, local housing allowance rates will cover at least 30% of market rents in each area. For example, in one London borough, for a two-bed home the maximum was £1,390 per month and it could now be as high as £1,550 per month. The housing element of universal credit can also be used to cover mortgage interest and service charges.

Universal credit minimum income floor

The requirements of the minimum income floor for the self-employed are being temporarily relaxed for anyone applying for universal credit due to the impact of the coronavirus. This took effect on 13 March 2020 for new applicants and will last for the duration of the outbreak. The minimum income floor relaxation will apply from 6 April 2020 for existing self-employed UC claimants.

Additional elements of universal credit

Additional monthly allowances for children

Additional allowances are available to those with children. For 2019/20 these are:

  • First child £277.08 (born before 6 April 2017) or £231.67 (born on or after 6 April 2017).
  • Second child and any other eligible children £231.67 per child.

Childcare costs

Up to 85% of the cost of childcare (for 2019/20 up to £646.35 per month for one child and £1,108.04 per month for two or more children).

Disability and caring responsibilities

Additional monthly amounts are available for claimants:

  • with a disability or health condition;
  • with a disabled child; or
  • who care for a severely disabled person.

Warning: If you are already claiming benefits and find yourself needing extra support you may need to claim universal credit. Existing benefit claimants should seek specialist welfare rights advice before claiming universal credit as doing so will usually end existing claims and it is unlikely you will be able to go back at a later date.

Other support

Claiming universal credits may also unlock other benefits such as free school meals, a reduction in council tax and help with prescription costs and dental treatment. See the full list of additional support.

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