Coronavirus: People in Poverty

Dear Constituent,

Thank you for contacting me about support for vulnerable people during the Coronavirus outbreak.

This is the biggest public health emergency in a generation. I am encouraged by the clear commitment to supporting people, with unprecedented packages of support rolled out for businesses and individuals alike. I also welcome that additional support is being provided through the welfare system, representing an injection of over £6.5 billion.

In addition to the extra support provided through Universal Credit (UC) and Working Tax Credit, the annual benefit uprating of 1.7 per cent has been applied across all benefits. As I understand it from discussions with colleagues in the Department for Work and Pensions, it would not be operationally viable to make changes to the legacy benefits systems, whereas the digital systems can be changed more simply and quickly. Furthermore, the Government’s approach has been to target support at those facing the greatest financial disruption, and it is important to remember that new claimants will generally be receiving UC. That said, those on legacy benefits can still benefit from other support such as mortgage holidays, the suspension of new evictions, and support with electricity bills. 

On the benefit cap, although temporary changes have been introduced to support people at this difficult time, it is not the intention to fundamentally change the process, principles or application of UC. The benefit cap allows for a yearly income of £20,000 outside of London, and £23,000 within London, and claimants may benefit from a nine-month grace period where their UC will not be capped if they have a sustained work record. Exemptions also apply for the most vulnerable claimants who are entitled to disability benefits and carer benefits.

You may be aware that the Local Housing Allowance (LHA) has already been increased to the 30th percentile of local market rents for Universal Credit and Housing Benefit claimants. This means that 30 per cent of properties in each broad market area across England, Scotland and Wales are now within the LHA rate. This change will directly benefit over a million households who will see an increase in support of £600 a year on average.

Thank you again for taking the time to contact me.