Some of Scotland's poorest households face income crisis due to Universal Credit cut

It carried out an analysis of Universal Credit CAB cases over the summer from people in complex debt - which refers to the level of support someone needs, taking into account the amount owed against income.

It found that without the additional £20 a week announced in March, 8 in 10 of these CAB complex debt clients would have a "negative budget"- where a debt adviser assesses that a client cannot meet their living costs.

Although 58 per cent still face a 'negative budget' now, some 80 per cent would be in a 'negative budget' without the extra cash.

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CAS social justice spokesman Mhoraig Green said: “Universal Credit has faced a real test during Covid 19 as millions of people applied for support, and while there are still some structural issues that must be fixed, the decision to increase the basic payment by £20 per week has clearly had a positive impact in protecting the finances of some vulnerable people.

“The uplift protected more than 1 in 5 of our complex debt clients on Universal Credit from falling short on paying their bills and meeting their living costs.

“It’s essential it’s retained permanently, otherwise there is a real risk more people on Universal Credit will face an income crisis, unable to meet their living costs, while our shellshocked economy is still dealing with the fallout of the pandemic.

“The fact that more than half of these clients still face negative budgets show wider issues in our social security system and economy, but the Chancellor was right to introduce the increase in March, and retaining it permanently will give people vital certainty for the months and years ahead.”

Chancellor Rishi Sunak announced the £20 per week increase to Universal Credit in March as part of the package of measures in response to Covid-19, but offered no further guarantees that the uplift would remain after the end of the current financial year.

Mr Sunak last week outlined his Winter Economy Plan, but there was no commitment to keeping the temporary Universal Credit increase.

CAS had joined the Joseph Rowntree Foundation and others who want the chancellor to make the temporary rise in Universal Credit, plus other benefits, permanent.

Modelling by the Joseph Rowntree Foundation suggests around 16 million people in the UK will be in households facing an overnight income loss equivalent to £1,040 a year, with those on the lowest incomes and families with children being hardest hit.

They say 700,000 more people across the UK will be driven into poverty, including 300,000 children, while a further 500,000 of those already in poverty will be plunged into deep poverty - a measure which is gauged by being more than 50% below the poverty line.

It pointed out that unemployment may rise strongly next April, which would add to the hardship of the £20 boost being withdrawn.

Some 50 children's charities, food bank providers, housing organisations, benefit and debt advisors, disability groups, and others have written to the Chancellor saying if this "lifeline" is cut it risks plunging struggling households into poverty.

"Falling incomes and rising costs throughout the pandemic have put families under immense financial pressure, but the £20 uplift has been a lifeline that has enabled many of them to keep their heads above water and has stopped us seeing a marked surge in poverty levels," the coalition of groups say in a letter to the chancellor.

"However, if the uplift ends in April 2021, this good work risks being undermined."

A spokesman for the Department for Work and Pensions said: “We have provided £9.3 billion extra welfare support to help those most in need, including increasing Universal Credit by up to £20 a week, as well as introducing income protection schemes, mortgage holidays and additional support for renters.

“Government policies, in particular those related to the pandemic, are under constant review.”