Rishi Sunak baffles MP with claims Universal Credit is 'generous'
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Universal Credit is designed to help those out of work, unable to work or who are on a low income. While claimants expect to get a set amount of money each month, this could change due to a number of reasons.
As a result, Britons should be aware of how their payment could potentially be affected.
One reason as to why a Universal Credit payment could be cut is if a person is sanctioned by the Department for Work and Pensions (DWP).
When signing up to Universal Credit, Britons have to make an agreement to carry out certain tasks such as looking for work and attending interviews.
However, if a person fails to comply, they risk their Universal Credit being reduced in what is known as a sanction.
Sanctions range from lowest, to low, medium and then high and depend on the circumstance.
The DWP will let individuals know what kind of sanction they have received, and how much their payment is being reduced by.
Another reason why Universal Credit payments could drop is if a person earns more money from their work.
Under Universal Credit rules, for every £1 a person earns, their payment reduces by 55 pence – known as the taper rate.
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Therefore, the more a person earns, the less their Universal Credit payment will be, until they potentially no longer receive the benefit at all.
A third reason as to why Universal Credit payments could drop is due to a change in someone’s circumstances.
Certain life events need to be reported to the DWP as it could impact the payments someone receives.
This, for example, could include:
- Starting a new job
- Finishing a job
- Having a child
- Changing address, mobile number or email address
- Rent going up or down
- Changes to savings and investments
Universal Credit payments could also reduce if a person owes the Department any money.
This could be as the result of taking out an advance payment, or budgeting advance, for instance.
These are considered to be loans, and therefore individuals will need to pay this money back.
The sum is subtracted from monthly Universal Credit payments until it is paid off in full.
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Finally, Universal Credit payments could decrease if a person has accidentally been paid too much through the benefit.
In this case, the DWP will take money back from future Universal Credit payments.
In some cases, Britons will not have to pay the money back, but they will need to go through the Department’s formal processes of asking.
The decision will ultimately be at the discretion of the DWP themselves.
Overpayments can be reported if a person signs into their Universal Credit account, or calls the relevant helpline.
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