unemployment

Changes to Universal Credit and how to access alternative financial assistance

by Madaline Dunn

As part of the government’s Covid-19 support plan, back in 2020, it introduced a £20 boost to those receiving Universal Credit. However, this financial intervention was only temporary and officially ended on 6 October 2021, despite a considerable amount of backlash from across the board.

Of course, the announcement of the scheme’s end is not good news for many, and it’s understandable to be concerned about how this will affect you and your family financially. After all, the cut means that around six million unemployed and low-paid workers will face a £1,040 cut to their yearly incomes.

Speaking about what the cuts will mean for many families, Morgan Wild, Head of Policy at Citizens Advice, said: “More than half a million people have come to Citizens Advice for support with Universal Credit since the pandemic. We know the extra £20 a week has often meant the difference between empty cupboards and food on the table.”

That said, there are a number of different forms of alternative financial assistance that can help support you in this difficult and turbulent time.

At The Salary Calculator, we’ll guide you through some of the different types of financial assistance available, including:

  • Help with essential costs
  • A reduction in council tax
  • Assistance with paying rent
  • Free prescriptions
  • How to check what financial aid you’re eligible for

Essential costs

If you and your family are finding it hard to keep up with the cost of essentials, whether that’s food or clothes, you can reach out to your local council and ask if you’re eligible for a hardship fund. To find out what your local council is and reach out for more information, head over here.

Equally, for those struggling to pay for food costs, you can try food bank vouchers. To access these vouchers, you can ask an organisation that’s supporting you, whether that’s a charity, school or Citizen’s advice, for a referral.

If you have children who are attending school and you receive governmental financial support, they might be eligible for free school meals.

Those who receive the following are eligible:

  • Income Support
  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Support under Part VI of the Immigration and Asylum Act 1999
  • The guaranteed element of Pension Credit
  • Child Tax Credit (provided you’re not also entitled to Working Tax Credit and have an annual gross income of no more than £16,190)
  • Working Tax Credit run-on
  • Universal Credit

For more information, visit the government website.

Reducing council tax

If you’re finding it hard to make ends meet following the Universal Credit cut, you can apply to have your council tax bill reduced. In some cases, applicants can get their bill reduced by 100%, but this will be determined by a number of different factors, including where you live, your circumstances and income and whether you have other adults or children living with you.

Help with paying rent

Rent is getting more and more expensive all the time, and with the added financial strain caused by the Universal Credit cut, it can be really difficult to find enough money to pay for life’s expenses. To help with this, you can apply for a Discretionary Housing Payment (DHP) through your local council.

To be eligible for this, you must already claim housing benefit or the housing element of Universal Credit.

Prescriptions

Little costs add up, and prescriptions for medication can sometimes end up costing you a bomb. Luckily, if you are a receiver of any of the following, you may be entitled to free prescriptions:

  • Income Support
  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Pension Credit Guarantee Credit
  • Universal Credit

If you’re not too sure whether you’re eligible, you can double-check with the NHS’s eligibility checker.

How to check what you’re entitled to

It’s not always clear what financial assistance you are entitled to, but a great way to keep up-to-date and ensure that you don’t miss out is to carry out a benefit check. You can do this by using an online benefits calculator or by reaching out to your local Citizen’s Advice Office.

Tags: , , ,

Wednesday, October 20th, 2021 Economy No Comments

None of the content on this website, including blog posts, comments, or responses to user comments, is offered as financial advice. Figures used are for illustrative purposes only.

Updates to Job Support Scheme

by Admin

In light of the current situation with Covid-19, Chancellor Rishi Sunak has made a few changes to the Job Support Scheme, so the government is providing more support than they originally planned.

The minimum number of hours which have to be worked to qualify for the scheme has been reduced from 33% of normal hours to 20% of normal hours. The employer’s contribution has been reduced from 33% of the unworked hours to 5% of the unworked hours, and the government contribution has been increased to 62% of the unworked hours (from 33%). This more generous scheme makes a huge difference to small businesses who were worried they would be unable to meet the costs from 1st November. However, it does reduce the minimum amount an employee can be paid from 77% to 73% of their full salary (this is only the case if the number of hours worked is below 33%).

The Salary Calculator’s furlough calculator has been updated with these latest figures.

Tags: , , , , ,

New – Job Support Scheme added

by Admin

Note: An earlier version of this post contained old percentages – the post was updated (on 22nd October 2020) to reflect new percentages

From 1st November 2020, the furlough scheme introduced by Chancellor Rishi Sunak is being replaced by the Job Support Scheme. This scheme is designed to encourage employers to bring employees back to work part time if possible. The Salary Calculator has been updated to allow you to estimate what effect this will have on your take home pay.

If you work 20% or more of your normal full time hours, some of your “missing” pay for the hours not worked is subsidised by the government. Your employer will pay 5% of the unworked hours, the government will pay 62% of the unworked hours, and the remaining third of unworked hours is unpaid. This does require your employer to pay you for work you are not doing, but the plan is to help people get back to work rather than losing their jobs. If you work a third of your hours, you will receive 77% of your normal pay – slightly below the 80% offered by the furlough scheme. The government contribution is capped at £1,541.75 per month.

To see what effect this might have on your take home pay, check out the Pro Rata Salary Calculator – you can either enter reduced weekly hours, or a percentage of your full time hours – just remember to tick the “Job Support Scheme” box to see what a difference it will make.

Tags: , , , , , , , ,

New option – reduced pay

by Admin

With the coronavirus outbreak affecting businesses around the country, a number of employers have had to make the decision to ask staff not to come in to work. The government announced last week that, to encourage employers not to lay staff off, they will pay up to 80% (to a maximum £2,500 per month) of staff members’ salaries if they keep them on the payroll. As well as trying to ensure that employees still receive some pay, the plan is to keep the workers available so the economy is well placed to start up again once the virus threat is reduced.

I have added an option to the existing Pro-Rata Calculator which allows you to enter a percentage of salary instead of reduced hours. Some employers will continue to pay their employees the full amount during the pandemic, others may only be able to pay what they are receiving from the government. And of course, for other reasons you might be receiving a percentage reduction in salary. If this applies to you, enter your full-time salary and full-time hours, then enter the percentage of your salary that you will be receiving. With tax and pension deductions etc taken into account, you might find that the reduction is not quite as bad as you thought. For example, someone on the UK median full-time salary (which is about £30,000) normally takes home £1,915 per month after tax and 5% auto-enrolment pension contributions. On 80% salary, they would take home £1,595, which is a significant drop but still just over 83% of normal. Other deductions like Student Loan repayment could make the overall reduction to a slightly more manageable 85%.

Also of interest might be the new Sick Pay Calculator, which I launched last week to help people who have had to take a short period of time off on reduced pay.

Tags: , , , , , , , , , , , , , ,

Becoming self-employed rather than un-employed

by Admin

I read an interesting article this morning on the BBC News website about the phenomenon of people who are unemployed deciding to become self-employed rather than keep looking for “traditional” employment. Apparently, a significant number of people have found that it is difficult to find a job, but that they have been able to start and run promising businesses themselves – something they have found much more fulfilling than taking Jobseeker’s Allowance.

Our sister site Employed and Self Employed has a tax calculator you can use to see how much tax and National Insurance would be deducted from self employment profits, if you are thinking of starting your own business. There is also a more complex calculator if you already have a job but are thinking of becoming self-employed in your spare time – you can work out how much of your profits you would be able to keep hold of.

If you are unemployed and thinking of starting your own business, you may be eligible for some funds from the government to help you get started. More information is available here about the New Enterprise Allowance.

Tags: , , , , , , , , ,

Sponsored Links

Close X

This website uses cookies - for more information, please click here.