Chancellor Rishi Sunak has bowed to pressure from charities and political opponents by extending the £20-per-week Universal Credit uplift until the end of September.
Announcing the measure, Sunak said it would take the increase “well beyond” the end of the current lockdown, but stopped short of meeting demands by a growing number of charities and organisations to make the boost permanent.
He also announded that working tax claimants who haven’t yet moved to Universal Credit will receive equivalent support in the form of a one off £500 payment.
The Chancellor also said that the minimum wage, also known as the ‘National Living Wage’, will increase to £8.91 an hour from April 2022.
But Citizens Advice said the Chancellor’s decision on the Universal Credit uplift simply “kicks the can down the road”, warning that millions of families still face a “financial cliff edge” when the extyra support expires.
Alistair Cromwell, Acting Chief Executive of Citizens Advice, said: “It will be a huge relief for people on Universal Credit to not face a cut to their benefits next month. But with a challenging recovery ahead of us, this is a stopgap.
“A six-month extension kicks the can down the road, only to leave millions facing a financial cliff edge in the autumn.
“We urge the government to think again. The Universal Credit uplift must be kept for at least a year to help people pick up the pieces from this crisis.”
Thomas Lawson, chief executive at the charity Turn2us, said: “There is much in this budget that those of us struggling with money will welcome; especially the extension of the furlough scheme, expanding the Self-Employed Support Scheme, and the rise in the National Living Wage.
“However, the decision to only extend the Universal Credit uplift for six months will have far reaching consequences for those of us dependent on this income.
“Especially the half a million families who are expected to fall into poverty as a result – directly challenging the governments own commitment to levelling up.
“Our social security system has endured years of cuts, freezes and austerity. The £20 uplift went someway to making up this shortfall, but is still significantly less than people received a decade ago.
“Today our government could have taken the opportunity to fundamentally and permanently make our social security system fit for purpose.
“We will now continue to work in partnership to make the case that the £20 uplift should both be made permanent, and extended to legacy benefits.
“Only then will we be able to see a full financial recovery which leaves no one behind.”
Anastasia Berry, Policy Manager at the MS Society and Policy Co-Chair of the Disability Benefits Consortium, said:: “It is outrageous that over 1.9 million disabled people on legacy benefits, including Employment and Support Allowance and Jobseekers Allowance, have been refused the same financial lifeline those on Universal Credit have been getting for nearly a year.
“How the Chancellor can stand up and say the Government’s response to COVID-19 has been “fair, with the poorest households benefitting the most” – when so many vulnerable are having to chose between heating their homes or eating – is beyond us.
“Government excuses so far have been at best feeble, and at worst actively insulting to those being pushed further into poverty.
“They must give people on legacy benefits the £20 per week uplift, and end this discrimination against disabled people immediately.”