Millions of DWP Universal Credit claimants face £570 cut as cost of living soars

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People on Universal Credit face £570 cuts in income as inflation soars amid the UK’s cost of living crisis.

The latest figures from the DWP show two million families receiving Universal Credit in November, including 201,238 families in the West Midlands.

But with DWP benefits set to rise by 3.1% in April, while inflation is expected to peak at 7.25%, most of these families face a reduction in real terms of around £570 a year from social security assistance, activists warned.

For the 180,000 families subject to the benefit cap – a limit on how much a household can receive in state payments – the loss will be even greater.

READ MORE: West Midlands families choose between food and bills as cost of living crisis hits

The Child Poverty Action Group (CPAG) said families under UC will be hit hard as supermarket prices and energy costs rise.

He is calling for a 7 percent increase in Social Security payments in April to match the expected rate of inflation.

And to ensure the increase reaches all families who need it, the charity wants the cap on benefits removed.

The benefit cap is currently £1,916.67 per month (or £23,000 per year) in Greater London for couples (with or without children) or single claimants with one child of qualifying age, and 1 284.17 (or £15,410 per year) for single adult households without children in the same neighbourhood.

For the rest of the UK, the corresponding amounts are £1,666.67 per month (£20,000 per year) and £1,116.67 per month (£13,400 per year) respectively.

Alison Garnham, chief executive of Child Poverty Action Group, said: “Families behind today’s numbers have no shelter from the storm. They are facing even higher prices and reduced in real terms of social security support.

“Unless the government takes action, the children of these families will feel the pinch, as parents are forced to cut food, heating and basic necessities even further. inflation expected this spring is the minimum protection needed and would send a signal to desperately worried families that they have not been forgotten.”

She added that most of those affected by the benefit cap are families with children (83%) – often in areas with high housing costs – and that most of them (63%) are headed by a single parent, more than half of whom have at least one child under the age of five. It is particularly difficult for single parents with very young children to escape the ceiling by working (or working more), the CPAG said.

The level of the benefit cap has not been revised since 2016, so the shortfall in Social Security support that capped families receive, relative to what they need, has increased accordingly.

This spring, food costs alone are expected to be £26 a month more than last year for poor families with children, according to CPAG analysis.

And with energy bills set to rise by 54% in April, CPAG says families with children below the poverty line face £35 a month in extra energy costs, even after taking into account the new measures government mitigation.

READ MORE: DWP Universal Credit under attack as payments ‘inadequate’ for rising energy bills

In addition, these families would have to devote three times the share of their income to energy, compared to wealthier families (respectively 17% and 5% of disposable income after housing costs).

New government measures to help households with energy costs include: a refundable £200 rebate on energy bills for all households, a £150 council tax rebate in April for people living in properties in the AD strip and £150m for local authorities to use as discretionary support. for low-income households.

A DWP spokesman said the benefit cap “ensures fairness for hard-working taxpayer households and a strong incentive to work, while providing a much-needed safety net”.

He added: “Through our Jobs Plan, we are helping people find jobs, progress and earn more.

“Returning to work will significantly increase the likelihood that a household will not be affected by the cap.”

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