Changes to Benefits in 2020

benefit changes 2020

UK Benefits 2020

Planned changes to the UK benefits system under the Conservative government will be going ahead as scheduled in 2020 following their win in the General Election in December 2019. This could mean more money or less money for some claimants due to the upcoming changes.

Benefits Freeze Ending

The benefits freeze came into effect back in April 2016 and put a cap on the level of benefits for 4 years. This freeze is due to end in April 2020, which means that working-age benefits such as Universal Credit should be increasing by 1.7%. This will also affect JSA, ESA, housing benefit, tax credits, and child benefit. Someone who currently receives £500 a month in benefits would then get an extra £8.50 (which adds up to £102 a year).

Parental Bereavement Leave

New legislation will be coming into force in April 2020 which entitles employees to two weeks’ leave following the death of their child (under 18 years old). This includes stillbirths after 24 weeks of pregnancy. The parents will be able to claim pay for this two-week period if they meet the eligibility criteria, which have not been shared yet. This will be the first time that bereaved parents in the UK are legally entitled to leave.

State Pension Increasing

The State Pension is expected to increase by the highest amount since 2010 in April 2020. This is yet to be announced in the government’s budget, but we can expect the State Pension to increase by 3.9%. Those claiming their pension since before April 2016 would receive an extra £5.50 a week, while those on the ‘new’ pension from April 2016 would receive an extra £6.60 per week. The bad news for State Pensions is that the Adult Dependant’s Credit is stopping completely in April 2020, and the State Pension qualifying age will be rising to 66 in October this year.

Free TV Licences Ending for Over-75s

Unfortunately, from 31st May 2020, anyone aged 75 or over will no longer be able to get a free TV licence. The new scheme from 1st June only offers free TV licences to over-75s if they (or their partner) are claiming Pension Credit. This means that almost 3 million households will now have to pay the annual fee when they renew their TV licence in 2020. This will cost £52 for black-and-white TV or £154.50 for colour TV.

Universal Credit Transition Period Extension

Universal Credit is still slowly replacing six older benefits. Claimants of older benefits are moved onto Universal Credit if their circumstances change. “Managed migration” is the moving process for claimants whose circumstances have not changed, transferring them to the new Universal Credit scheme as well from 2020 to 2023. Usually, the old benefit claim stops immediately upon moving to Universal Credit. However, there will be an extended transition period, allowing Universal Credit migrants to receive 2 more weeks of their old benefits. This applies from 22nd July.

Universal Credit Changes for Self-Employed Claimants

Self-employed people who are eligible for Universal Credit have their benefit payments calculated according to a Minimum Income Floor. This is the equivalent of the National Minimum Wage for the hours that the claimant works, which could be higher than their actual earnings. The Minimum Income Floor does not apply to businesses that were started less than 12 months ago. From September 2020, this grace period of 12 months will also apply to all Universal Credit claimants who are seen to be “gainfully self-employed” (organised and regular activity for profit).