Low-income workers urged to claim tax credits before universal credit arrives


Across the country the one million people in low-paid jobs who have yet to apply for tax credits should hurry up and do so before it’s too late and universal credit arrives in their area, say UNISON and benefit experts Entitledto today (Monday).

The two organisations have issued this urgent appeal to low-income workers because if people don’t claim tax credits by the time the full universal credit service arrives in their town or city, they could end up much worse off.

Last summer in his July Budget, George Osborne announced cuts to the universal credit work allowance, alongside cuts to tax credits. While the chancellor backed down over changes to tax credits, the cuts to universal credit work allowances remain and come in today (Monday).

The government says that no-one will be worse off under the new universal credit system. This means that someone’s in-work benefit income is protected, if they are claiming tax credits before universal credit is rolled out in their part of the world – as long as their circumstances don’t change.

Entitledto has created a tax credits take-up tool for UNISON, to help people understand the impact of the changes and find out whether they might be eligible to apply for tax credits before universal credit comes to where they live.

Make sure you don’t lose out with the UNISON tax credit (take-up) calculator

It takes just two minutes using our tool to see how much you could receive in tax credits

Use the UNISON tax credit (take-up) calculator

Commenting on the changes UNISON general secretary Dave Prentis said:

“Last year huge pressures on the chancellor forced him to abandon the harsh changes to tax credits that had been due to come in today. But the cuts to universal credit didn’t disappear, and will still mean financial hardship for many people on low incomes.

“But if low-paid workers sign up to tax credits, not only will they be better off now, their income will also be protected in future, unless there is a significant change in their circumstances. That’s why anyone on a low wage, who doesn’t get tax credits at the moment, should check out our calculator to see if they might be due any much-needed cash.

“UNISON will continue to press the government to reverse the cuts to universal credit work allowances and to end the second class arrangements that start today for many low-income families.”

Director of Entitledto Ltd Dr Phil Agulnik said: “Our campaign seeks to encourage low earners who are eligible to claim working tax credit to take up their entitlement. It only takes a few minutes for someone to check they are eligible using the free tax credits tool.

“Once the full universal credit service comes to a jobcentre near them, residents won’t be allowed to apply for tax credits. So as well as missing out on extra money now, low earners might well miss the boat for claiming tax credits entirely.

“Today around a million low paid people miss out by not claiming working tax credits. If someone is eligible they need to claim now before it’s too late.”

Notes to editors:
– For example, excluding housing costs, a couple aged over 25 with no children or disabilities earning £7.20 an hour and working 30 hours a week would be £53.86 a week better off under working tax credit than they would be under universal credit. If their circumstances stayed the same for the next five years – during which time universal credit is being rolled out across the UK – that individual would receive an extra £14,000 in payments.

– The UNISON tax credits take-up tool is at https://unison-takeup.entitledto.co.uk

– Universal credit is a new benefit for working age people that is designed to support people who have a low (or no) income with their basic living expenses and housing costs. It will eventually replace income support, jobseeker’s allowance, employment and support allowance, housing benefit, child tax credit and working tax credit.

– Universal credit is gradually being rolled out across the UK. Almost all new claims from single unemployed people are now included. Outside of a few pilot areas, new claims from couples or those with children are being rolled out between May 2016 and June 2018. All existing claimants will be moved over to universal credit at some point between April 2018 and April 2021.

– The work allowance of universal credit is the amount that someone can earn before universal credit starts to be withdrawn by the taper rate (65p for every £1 earned). For example, before the Budget announcement in July 2015 the work allowance for a lone parent with no housing costs was £8,808. From 11 April 2016 this drops to £4,764. Single people and couples without children have lost the allowance altogether (it was £1,332).

– entitledto is the leading provider of online benefit calculators in the UK. It believes that everyone living in the UK should be able to understand his or her legitimate benefit entitlements. It has been operating since 2000, and provides calculators not just through its web site www.entitledto.co.uk but also to numerous local authorities, housing associations, leading charities as well as other websites that choose to provide benefit calculators to support their users.

Media contacts:
Liz Chinchen T: 0207 121 5463 M: 07778 158175 E: l.chinchen@unison.co.uk
Wendy Alcock M: 07989 935922 E: wendy@entitledto.co.uk