Welfare benefits changes due to Covid-19

The Government have brought in/or are about to regarding Covid 19 and some welfare benefits changes.  Please note the information provided below is for guidance only, based on the information available at time of writing and will no doubt change over time.

Summary of welfare benefit and other changes introduced because of Covid-19

Universal Credit changes

  • The Standard Allowance has increased by £20 a week for 12 months..ends April 2021 but the government may decide to keep this?
  • The minimum income floor has been temporarily abolished.
  • The minimum income floor is a formula used to work out how much Universal Credit you should get when you’re self-employed. It is based on national minimum wage and an assumed number of worked hours, regardless of whether you actually work them or not.
  • Abolishing the minimum income floor should increase the amount of Universal Credit you are entitled to claim if you’re not able to work and allow you to keep your self-employed status
  • UC will be assess using actual income rather than the minimum income floor. This measure is in place until the 12th November 2020.
  • The suspension of work related requirements was lifted at the end of June 2020, meaning new claimants can now have work related requirements imposed and current UC claimants will have their requirements reviewed
  • Face to face medical assessments continue to be suspended, but kept under review. The DWP have said that it will contact claimants by letter or telephone to let them know what happens next but in the meantime current payments will continue as normal.

Working Tax Credit changes:

  • Standard rate increased by £20 a week – the basic rate of Working Tax Credit increases from £1,960 to £3,040…. ends April 2021 but the government may decide to keep this?
  • If you are currently getting Working Tax Credit who cannot work or are working fewer hours because of Coronavirus then you do not need to tell HMRC about this change as long as youy are still employed or selfemployed and the drop in work / hours is only a temporary measure. This ends at the end of October 2020, when the Job retention scheme ends


  • Three-month payment holidays are available to customers whose finances are affected by coronavirus.  So if you're struggling to make payments, or think you will struggle over the next couple of months, your lender needs to help you if you ask.
  • You can apply for a loan or credit card payment holiday until 31 October 2020. This lets people who are currently making payments but are concerned about the future have more time to make the decision rather than rush to apply.
  • You'll still be charged interest during the payment holiday. This means you'll likely end up paying slightly more overall. So it's best to do this only if you need to – if you can pay, it's best to keep doing so.
  • You can arrange with your lender to take partial payment holidays. If you can make some payments towards your loan repayment or minimum payment on your card, but can't pay the whole amount, you'll be able to come to an agreement with your lender to do so. This is better than a full payment holiday as less interest will accrue.  
  • Lenders need only give the payment holiday where it's a suitable solution. If you already have debt problems, or there's a chance your income won't recover after the coronavirus crisis is over, the lender can deny you a payment holiday. But if that's the case, it should work with you to find a more suitable solution, such as directing you to debt help, setting up a longer-term repayment plan or waiving interest and charges.
  • Certain debts had been suspended (this was to allow the DWP to relocate staff to deal with the volume of new claims received in March/April 2020). But all eligible debts can be recovered from UC now – including third party deductions and overpayments.


  • Will remain entitled to Carers Allowance if they have a temporary break in caring as a result of isolation due to, or infection or contamination with, coronavirus disease of either the carer or the person cared for. This ends on the 13th November.

Other benefit changes.

  • Claimants on disability benefits will no longer be required to attend face-to-face assessments.
  • Face-to-face assessments for all sickness and disability benefits are still not going ahead. The DWP have said they will contact those affected, by letter or phone, with next steps.
  • New claims for disability benefits are being accepted.
  • The government have given councils in England funding to support council tax relief for vulnerable households affected by coronavirus. A new Council Tax Hardship Fund across Cheshire West and Chester will reduce Council Tax Bills by up to £150 for anyone in receipt of Council Tax Support / Reduction.
  • The additional £20 earnings disregard for Housing Benefit will end from April 2021, in line with the loss of the additional £20pw in UC and ESA  – unless the government decide to extend it

New Job Retention Scheme

  • Provides a grant to employers to enable them to pay the wages of their workforce who remain on payroll but are temporarily not working during the coronavirus outbreak i.e. ‘furloughed’.
  • In September, the government will cover 70% of your salary up to £2,190 a month, with your employer making up the remaining 10%.
  • In October, the government will cover 60% of your salary up to £1,875 a month, with your employer making up the remaining 20%.
  • The scheme will end at the end of October.
  • If you’ve been furloughed and have not yet returned to work, you will be able to go back to work part time.

New Self Employment Income Support Scheme

  • Will allow self-employed workers to claim a taxable grant worth  70% of your profits up to £2,190 a month, will cover the three month period from June to August
  • Applications for the second and final tranche can be made from August 17th 2020 until October 19th 2020
  • A claim for Universal Credit may be relevant in the meantime.
  • If you have any further questions please call us on 0300 303 9848 and speak to our Income Management Team