What You Need to Know About Rishi Sunak's £1,000 One-off Universal Credit Payment
Finance minister Rishi Sunak is proposing a one-off grant that would replace the £20 a week - or £1,040 a year - boosts introduced in March to support millions of families facing poverty during the pandemic. In this article we’ll tell you everything you need to know about this new stimulus plan.
This benefit will substitute the boosts introduced last April, so it would be available to all benefit claimants - particularly those facing some financial crisis, such as unemployment or the inability to cover essential expenses.
Is it better than the £20 a week plan?
It’s different. Universal Credit was raised by £1,040 for the 2020/21 financial year to help ease the impact of coronavirus. However, this was a "temporary" rise, which is due to end on April 12, so the payments will fall back down to pre-pandemic levels and households will lose £84 as a result. The £20-a-week permanent rise would add around £6billion a year to public spending, which is unsustainable considering the UK’s skyrocketing public debt situation. Sunak is thus considering a one-off payment of between £500 and £1,000. This payment would be up-front so you would have to plan and organize your finances well. If you need help, consider talking to a financial advisor.
An alternative to the current £20 a week increase?
Yes, since the £1,000 lump sum would compensate for the ending of the temporary £20-a-week increase in benefits. Also, because more people receiving Universal Credit have signed on for it since the onset of the pandemic, they will most likely qualify for it.
Is it definitely going to happen? What’s the official position here?
No official decision has been made yet. Nonetheless, many reports have been going around discussing it and Downing Street has not denied them at all. In any case, the government is in need of a plan to substitute the current one. Moreover, Government sources have stated that they are very hopeful the one-off payment will help rebuild the economy. The Treasury believes this will make people spend more in order to stimulate the economy. Nevertheless, if this goes to those who are financially struggling and unemployed, it's very unlikely that the money will be spent on anything beyond essential items. Leaving people without an alternative would leave the most vulnerable in a difficult situation and the government’s credibility would take a massive hit, so the plan is very likely to happen.
What about financial support for parents?
If you're a parent struggling to cover your bills, you could be entitled to extra financial support depending on your situation:
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