Sunak urged to replace Universal Credit with new 'hardship payment'

The Chancellor is asked to replace an increase in the universal loan with a new payment method.

A center-right think tank has suggested that Rishi Sunak should replace the £ 20 weekly Universal Credit (UC) increase with a new “coronavirus hardship payment”.

The proposal was made by the Center for Policy Studies to facilitate post-pandemic leakage.

The Center for Policy Studies is seen as close to government thinking.

The universal credit increase was introduced at the start of the first lockdown in March last year.

The pay hike should help families in trouble and it will expire at the end of March.

But Mr Sunak is under heavy pressure – including from some Tory MPs – to extend it while the lockdown restrictions remain in place.

So far, the Chancellor has defied the demands, insisting that he must start rebuilding public finances after the government gave massive support to the economy through the pandemic.
In a briefing paper, the CPS said it was “unreasonable” to cut support at a time when lockdown restrictions put severe financial pressure on many families.

However, replacing it with a clearly defined temporary measure could offer the government a way out of its political dilemma.
The report’s author, James Heywood, said: “The government has gone into a corner by increasing the universal credit by £ 20 – it is much harder to take something once it is there.
“Replacing the elevation with a well-defined temporary support mechanism combined with other reforms would provide the intended financial support while making it easier to prepare applicants for their eventual withdrawal.”
The report states that hardship payments should run for six months, with an additional three-month expiry if cut in half.
At the same time, she called for a more generous one-time appreciation of UC, which is currently only expected to rise by 0.5% in April.
The CPS said that a 2.5% increase in line with the rate applied to the state pension would add an additional £ 100 per year to the standard allowance for a single applicant over 25 years of age.

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