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Hundreds of thousands will plunge into poverty if ‘lifeline’ benefit cut

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More than a million people will be plunged into poverty or face deeper financial hardship if a temporary £20 a week ‘lifeline’ benefit is cut next year.

At the start of the pandemic, the government increased the standard allowance of Universal Credit and Working Tax Credit payments by £20 a week.

But this uplift is only a temporary measure and is due to end in April 2021.

As the Autumn Budget is on the horizon, a leading think tank is calling on the government to “keep doing the right thing” and keep the £20 lifeline.

Analysis by the Joseph Rowntree Foundation revealed that taking away the additional £20 a week payment will mean around 16 million people lose £1,040 from their annual budget overnight.

A further 700,000 people are likely to be pulled into poverty and those already in poverty struggling to stay afloat will face severe hardship, with a half a million more people likely to fall into deeper poverty (more than 50% below the poverty line).

The report author, Helen Barnard, said this lifeline must be kept and it must also be applied to those on legacy benefits who haven’t received more support during the coronavirus crisis.

Currently, the extra £20 a week payment doesn’t go to those claiming Employment and Support Allowance, Jobseeker’s Allowance and Income Support and the majority of claimants are sick, disabled or carers who face a greater risk of poverty.

Barnard said that by extending the payments to legacy benefit claimants, the incomes of 1.5 million people would be boosted, including around 300,000 children of families most at risk.

She said: “As we feel the impact of the pandemic on jobs and incomes, it’s clear we cannot afford to cut this lifeline at precisely the time when unemployment is rising, and many of us are facing a growing risk of poverty.

“Now is the moment to help families stay afloat not cut them adrift. Even the most optimistic forecasts do not expect the labour market to bounce back immediately, which means that opportunities to make up income through work will be limited for the next year, if not longer. We know that a lack of opportunities to work will likely fall most heavily on women, carers, disabled people, and people from ethnic minority groups.

“We need our social security system to be a strong lifeline we can all rely on. This vital public service will play an essential role in keeping our society steady through the challenges we will face, not just in the coming months but in the uncharted waters over the horizon. This pandemic has shown us that we never know when a storm is coming.”

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