Budget 2021: Universal Credit extended to September - but 6million then face £20-a-week cut

Universal Credit was today extended at its current rate to the end of September in a lifeline for 6million Brits claiming the vital benefit.

Chancellor Rishi Sunak delayed the April 12 date for the benefit to be slashed back by £85 a month, by just under six months, after a temporary rise due to coronavirus.

Tax Credit claimants will also get the boost but in the form of a £500 one-off payment.

But he refused calls to make the £20-a-week rise, first brought in April 2020, to be made permanent. That means millions of Brits face a new 'cliff-edge' in Autumn that will plunge hundreds of thousands into poverty.

It's understood the Chancellor expects the £20-a-week to end around September 30 in a brutal cut-off for millions of families.

And he made no announcement for more than a million people on legacy benefits - most of them disabled - whose standard payments are rising by just 35p a week in April.

Six million Brits are now claiming Universal Credit (PA)

Universal Credit was raised by £1,040 for the 2020/21 financial year to help with the impact of coronavirus so had been due to be cut back on April 12:

For single people over 25, the standard allowance would have been cut by £85.05 from £409.89 to £324.84.

For couples where at least one person is over 25, it would have been cut by £84.31 from £594.04 to £509.91.

For single people under 25, the standard allowance was due to be cut by £85.39 from £342.72 to £257.33.

For couples where at both people are under 25, it would have been cut by £84.66 from £488.59 to £403.93.

The Chancellor buckled to pressure not to make this cut on April 12.

But he also resisted calls from the Commons Work and Pensions Committee - which includes Tory MPs - to extend the benefit by a year at the very least.

He also briefly considered cutting the benefit and paying a £500 one-off sum instead - an idea that was trashed by Work and Pensions Secretary Therese Coffey.

Rishi Sunak was slammed by the British Psychological Society (AFP via Getty Images)

Charities want the current rate to be permanent. They say a return to previous UC levels would take Britain's unemployment support to its lowest since 1992 - and the boost last year finally closed austerity gaps created by George Osborne.

Dr Julia Faulconbridge, of The British Psychological Society, slammed the temporary extension.

She said: "We are disappointed that the chancellor has today decided not to give families the certainty and security they need and has instead decided on a short term fix with this six-month extension.

"Assuming this means that the intention is not to make this change permanent, this only delays the inevitable fact that more families will be pushed into poverty in six months’ time because of the decisions made by the chancellor.

“Psychologically the impact of a six-month extension and the uncertainty this brings is very damaging.

"This decision will have a significant impact on the mental, (and physical), health of those already placed at risk as a result of living in poverty.

"People need security at this turbulent time and today the chancellor has failed to provide that."

Mark Rowland, Chief Executive of the Mental Health Foundation said: “We welcome the Government’s decision to extend the Universal Credit uplift until the end of September, but are deeply concerned by the cliff-edge effect when this ends and the potential impact this will have on millions of people’s mental health. The Government must do the right thing and ensure that people are adequately supported by making the Universal Credit uplift permanent."

Imran Hussain of Action for Children said: "It makes no sense to cut this lifeline in six months when the furlough scheme will have ended and unemployment is expected to be near its highest – exactly when families will need it most. Families need help and certainty, not a stay of execution.

“There’s no faster way to push more children into poverty than by snatching £20 a week out of the pockets of our country’s poorest families. Many of them are in work and doing their best to hold their heads above water after a traumatic year that’s seen hours cut and wage packets slashed."

Helen Barnard, Director of the Joseph Rowntree Foundation, said “It is unacceptable that the Chancellor has decided to cut the incomes of millions of families by £1040-a-year in six months’ time.

"He said this Budget would “meet the moment” but this decision creates a perfect storm for the end of this year, with the main rate of unemployment support cut to its lowest level in real terms since 1990 just as furlough ends and job losses are expected to peak. This makes no sense and will pull hundreds of thousands more people into poverty as we head into winter."

• This story has been corrected to make clear the Universal Credit £20-a-week is due to end at the end of September, not mid-October.