Universal Credit payments to be slashed

The government has said it applies to the majority of people who have not reached state pension age yet

Millions of people across the UK have been forced to turn to Universal Credit following the coronavirus pandemic, but this month thousands of households could see their benefits slashed.

Around 160,000 households are coming to the end of their benefit cap grace period.

The benefits cap applies to a number of benefits, and is a limit on the amount a person can receive, to encourage them to enter work - reports the Express.

The government has said it applies to the majority of people over 16 who have not reached state pension age yet.

The grace period happens when a claimant’s earnings from work are less than the threshold, but immediately before this, their earnings were at least at the threshold for the preceding 12 months.

It can also occur when before entitlement to Universal Credit, the claimant stopped work, but prior to doing so, their earnings were at or above the threshold every month for the preceding 12 month period.

The government website explains benefits people receive usually go down at the end of the grace period.

However, in certain instances, this may not be the case, for example, if circumstances change, or certain benefits are not affected by the cap.

The issue of the grace cap was raised in Parliament as Seema Malhotra, Labour and Co-operative Party MP for Feltham and Heston, asked: Some 85 percent of caped households have families with children, and the Minister revealed last week that more than 160,000 households on Universal Credit could see their benefits capped in December, when their grace period comes to an end.

Work and Pensions Secretary, Therese Coffey, addressed the matter when responding to the question. She said: The cap has been in an important part of policy in trying to stimulate entrance into work.

I am conscious that there are still only about half a million vacancies, compared with a significant number of people unemployed. However, I am sure the Honourable Lady will welcome, with me, some of the actions possible for some of the most disadvantaged families, she said.

Stephen Timms, Labour MP for East Ham, also commented on the matter. He asked: The number of households affected by the cap has more than doubled since the start of the pandemic, to 170,000.