In his statement* on Friday 20 March the Chancellor announced unprecedented moves to mitigate the impact of Covid-19 on families and individuals on a low income.
Alongside measures to protect jobs and incomes across the economy, there were significant increases in support for people on benefits (including universal credit) and those living in rented homes.
This was both essential and extremely welcome.
In its latest analysis the Resolution Foundation** highlights remarkable changes to unemployment benefit, housing benefit and the self-employed claiming universal credit. They say:
“At a stroke, the Chancellor has reversed 30 years of retrenchment to unemployment benefits, boosting out of work incomes by over £1,000 per year.”
The importance of this may be gauged from the stream of evidence presented in recent years by Citizens Advice, Resolution and others showing the impact of the benefits freeze and austerity on low-income families.
“Re-linking Local Housing Allowance to local rents provides a further boost to benefits – by more than £50 per week in some places – but not in areas where rents have grown slowly.”
For a very long time, the cost and scarcity of affordable homes to rent has been among the most common problems faced by CARBS clients. Our chart, based on Resolution data, shows the potential of the new policy. Tenants in areas such as Reigate and Banstead, where rents have grown rapidly in recent years, will be among the biggest beneficiaries.
“The removal of the minimum income floor in UC will significantly reduce the income hit for self-employed people in lower-income families whose work temporarily dries up.”
A critical change, although some self-employed will not benefit because savings or other income in the family means they aren’t eligible for universal credit.
The foundation points out that the government’s measures are well-targeted. A large share of additional benefit will go to those most in need.
At Citizens Advice we look forward to helping clients obtain the support they need in the difficult weeks ahead. Read more about our Covid-19 arrangements.
* Statement, Chancellor of the Exchequer, 20/03/20 ** Supporting workers during the corona virus crisis, Resolution Foundation, 22/03/20. Resolution Foundation is a respected think tank focused on improving the living standards of people living on low incomes.