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New UK Poverty report recommends the £20 per week increase to Universal Credit must be made permanent with the lifeline extended to ESA

13 January 2021

The Joseph Rowntree Foundation (JRF) in its UK Poverty Report 2020/2021 concludes that the benefits system must be strengthened and that at a minimum, the temporary £20 per week increase to Universal Credit must be made permanent and extended to ESA and all other legacy benefits.

The new annual report highlights early indications of how poverty has changed in our society since the start of the coronavirus outbreak, as well as the situation revealed by the latest poverty data, collected before the outbreak.

JRF finds of all people in poverty either have a disability themselves or live with someone who does, compared with just a third of people in households not in poverty.

In addition, over half (57%) of the people in receipt of income-related benefits live in families where one or more members is disabled, so that families containing a disabled person are disproportionately affected by poverty.

Social security therefore plays a key role in helping cover the additional costs of disability.

The report says that the temporary £20 week increases in Universal Credit and Working Tax Credit have been enough to reverse the fall in the value of that part of these benefits seen since 2012/13, with the basic rate now 7% higher than in 2012/13 in real terms for couples and 16% higher for singles.

However people still in receipt of the benefits that Universal Credit replaced, such as ESA, have been left behind:

“Recipients of those benefits have not seen the temporary uplift. Their  benefits have lost around 9% of their value in eight years and at the same time they are facing increased difficulty in getting a job in a very depressed labour market and potential extra costs of the coronavirus such as home schooling.

If the lifeline of the temporary increase in Universal Credit and Working Tax Credit is not continued, they will also be 9% lower in real terms in 2021/22 than they were in 2012/13.”

UK Poverty 2020/2021 recommends that:

  • We need to strengthen the benefits system. At a minimum, we need the temporary £20 per week increase to Universal Credit and Working Tax Credit to be made permanent, extending this same lifeline to people on legacy benefits such as JSA and ESA.
  • We need as many people as possible to be in good jobs. Unemployment is expected to rise in the coming months, and we need to see further bold action to retrain workers and create good quality new jobs.
  • We need to improve earnings for low-income working families and ensure more people are in secure, good quality work. Government must support people in the lowest-paid jobs, or people working part-time, to move into higher pay and access sufficient and secure working hours, including bringing forward the Employment Bill.
  • We need to increase the amount of low-cost housing available for families on low incomes and increase support for households who have high housing costs.

The JRF says that:

“This report is being published in the midst of the coronavirus storm – a turbulent time when all of us have felt insecurity and instability.

But our analysis shows too many of us entered the pandemic already at risk of being cast adrift into poverty, while often lacking secure housing, a reliable income or adequate support.

It also shows that those of us already struggling to keep our heads above water have often been hit the hardest.

Our response to the pandemic should be measured by how just and compassionate it is to people in poverty, whether they were already experiencing hardship or have been swept into it.”

UK Poverty 2020/2021 is available from jrf.org.uk.

See also the December 2020 briefing The financial impact of COVID-19 on disabled people and carers also available from jrf.org.uk.