Millions of struggling families could lose £1,000 if the government goes ahead with plans to scrap a weekly increase to Universal Credit.
Downing Street is currently planning to end the weekly £20 payment in April 2021, which would see hard-up Brits lose £1,040 a year.
Universal Credit is a support payment that helps households who are out of work or low on income.
It has been a valuable lifeline during the pandemic which has wreaked havoc on millions.
The Department for Work and Pensions, which overseas the benefits, increased the sum by £20 to provide more support.
Although only meant to be temporary, the extra cash has been a valuable cushion for the day-to-day living of low-income Brits.
But with the move coming to an end millions of households now face losing just over £1,000 a year.
At present, the government is planning to bring the payment increase to a close in April 2021.
This would mean most claimants are set to face an income loss of £1,040.
Many people and organisations have called for the uplift to be made permanent.
Reports by the Institute for Fiscal Studies say that withdrawing the extra payment would mean a “significant decline” in finances for families impacted by the change.
The report said: "The increase is due to end in April 2021, which would see about four million families losing an average of 13% of their benefits overnight.
"For some, the proportional fall will be much greater.
"For example, a childless, non-disabled, single owner-occupier with no other source of income would see a 21% decline in benefits.
"If the Government instead chooses to make this increase permanent, it would add about 10% to the long-run cost of Universal Credit, though would undo at most two-thirds of the benefit cuts made since 2015, let alone those made during the coalition."
The IFS added: "Even with the temporary increases to Universal Credit, the UK has one of the least generous out-of-work benefits systems for workers on average earnings."
Tom Waters of IFS said going ahead with scrapping the payment would ease welfare budgets, but mean big losses for families impacted.
He said: "Even in its optimistic scenario, the Office for Budget Responsibility thinks that the hit to the labour market from the Covid crisis will increase benefit spending by £17 billion this year, and that's before you account for the £9 billion of temporary welfare measures the Government has brought in.
"Together this will take benefit spending to easily its highest level on record.
"Just allowing these temporary giveaways to expire would certainly go some way to cutting this figure, but would mean significant declines in income for the millions of affected families."
Speaking in the Commons last week, Boris Johnson said his Government’s work has reduced the number of Brits in poverty.
He said: “I am proud that we have been able to update it in the way that we have.
“The result of Universal Credit so far has been that there are 200,000 fewer people in absolute poverty now than there were in 2010.
“It is vital that we tackle poverty in this country. We are putting another £1.7 billion into Universal Credit by 2023-24.
“We will continue to support people and families across this country, and we will continue to spend £95 billion a year in this country on working-age welfare.
"But the best thing we can do for people on Universal Credit is to get this virus down, get our economy moving again and get them back into well-paid, high-skilled jobs - and that is what we are going to do."