Universal Credit: When does the £20 top-up end? Why is the uplift being phased out?
As the UK Government continues to announce eased restrictions in England ahead of the country’s ‘Freedom Day’, Work and Pensions Secretary Thérèse Coffey has announced that the Government will begin to phase out its £20 top-up to Universal Credit.
Ms Coffey’s statement on the decision to cut the £20 per week uplift in Universal Credit was made to MPs in Parliament yesterday morning (July 7), with Prime Minister Boris Johnson later confirming the move during his afternoon appearance in front of the House of Commons Liaison Committee.
This came despite calls from former Conservative Work and Pensions Minister Sir Iain Duncan Smith MP and other Tory MPs to make the uplift a permanent feature of Universal Credit support.
The £20 top-up to Universal Credit was brought in by the UK Government in March 2020 as part of support measures put in place to mitigate the economic impact of the covid-19 pandemic.
Today (July 8), Chancellor Rishi Sunak appeared on BBC Radio Scotland’s Good Morning Scotland and defended the government’s decision to cut the universal credit uplift, saying that this would no longer be required in due course and too expensive to continue.
Speaking to the BBC’s Gary Robertson this morning, Mr Sunak said: "This is one part of a huge package of support that we put in place during the crisis that was always meant to be temporary.
"It's right that we did certain things to help us get through the worst parts of the crisis – that's what we've done.
“But much like other things, the Furlough Scheme for example, these things will naturally come to an end, as we have got through the worst of it and we can look forward to a different future.”
Here’s what you need to know about the end of the Universal Credit uplift and why it’s being cut.
When will the £20 uplift be phased out?
Universal Credit, the UK’s unemployment or low income financial support scheme introduced by the UK Coalition Government in 2013, became lifeline for many during the pandemic alongside schemes like the Coronavirus Job Retention Scheme.
The £20 uplift, introduced in March last year and extended in March 2021, will now officially expire on October 1 this year following the decision by the UK Government to not extend it beyond this date.
Plans to phase out the £20 increase have been criticised by opposition MPs and economic experts for some time, saying that removing the uplift while the pandemic continues could lead to a crisis for those still struggling to find work or unable to open their doors under continued restrictions for certain industries.
Why is it being cut?
The UK Government has cited multiple reasons behind its decision to not extend the uplift beyond October 1, with Chancellor Sunak reiterating the Prime Minister’s comments in yesterday’s Liaison Committee in stressing that the primary aim of doing so was to encourage people into work.
Speaking yesterday, Mr Johnson repeatedly said that cutting the uplift would help to stimulate the economy and "get people into work".
Mr Sunak said in his Good Morning Scotland appearance that the end of the uplift coinciding with the phasing out of the Furlough Scheme had been “a hugely important but expensive intervention”, adding that a focus on reopening to economy “is the right way to sustainably help people”.
The uplift’s expense is a further reason which has been cited by Conservative Ministers, while charities argue that cutting the £20 top up could plunge thousands into poverty and see the loss of around £1,040 a year for millions of families across the UK.