New analysis from Citizens Advice Scotland has found that Universal Credit will fall below its 2013 value if plans to end the £20 weekly uplift from April go ahead.
The £20 increase to Universal Credit was introduced by the UK Government at the start of lockdown in March 2020 in recognition that people needed extra help during the coronavirus pandemic.
The Scottish charity says removing the uplift would see Universal Credit worth less this year in real terms than it was when introduced in 2013, because the benefit has not kept pace with inflation, ultimately being worth 11.5 per cent less in 2021.
For some benefit claimants, the monthly standard allowance will fall by as much as 25 per cent.
Citizens Advice Scotland is urging Chancellor Rishi Sunak to keep the £20 uplift in his Budget, due to be delivered on March 3.
Citizens Advice Scotland spokesperson, Nina Ballantyne, said: “More people than ever are claiming Universal Credit. Currently 480,000 people in Scotland claim it, but many of them have families to support so the numbers of people who rely on it is very significant and includes children.
“The pandemic has caused redundancy and reduced hours, and this looks set to continue for much of the year. Now is the time to strengthen the safety net for these families, not cut it.”
A new report from the Work and Pensions Committee also advises that the Chancellor “must maintain the uplift for another year at the very least”, if the UK Government does not intend to make it permanent.
However, the Committee acknowledges that keeping the £20 weekly uplift would come at a substantial cost, with the Joseph Rowntree Foundation estimating it could cost around £6.4 billion in 2021/2022.
But the Committee says the actual amount could be much lower if the UK Government’s plans to support people back to work are successful in reducing the number of people who rely on the welfare system.
Ms Ballantyne added: “Universal Credit has always failed to keep up with the cost of living, and it makes no sense to make cuts during a pandemic. Without proper support, we’ll see increases in poverty and foodbank use, and a strain on other public services like the NHS.
“The £20 uplift has been an essential boost to struggling families. The reasons it was introduced still exist, so there is no logical case for removing it. Taking it away now would be a real blow to our most vulnerable people, just when they need the most help.”
