JEREMY Hunt has announced some major changes to Universal Credit and benefits.
The Chancellor revealed the changes in his Autumn Statement today.
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He confirmed that the government will uprate benefits by inflation with an increase of 10.1%.
This will boost the payments for the average family on Universal Credit by £600 a year.
In today’s Autumn Statement, Mr Hunt announced:
Many Tory MPs had called for benefits and inflation to stay aligned, and previously Rishi Sunak had promised this himself when he was Chancellor earlier in the year.
Also announced today, millions of vulnerable Brits will find themselves better off, as more cost of living help is on the way.
There are also new work coach requirements for Universal Credit claimants.
Mr Hunt said he hopes the changes will help people already working to raise their incomes and become financially independent.
Speaking in the Commons, he said: “There have also been some representations to keep the uplift to working age and disability benefits below the level of inflation given the financial constraints we face.
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“But that would not be consistent with our commitment to protect the most vulnerable so today I also commit to uprate such benefits by inflation with an increase of 10.1%.
“That is an expensive commitment costing £11bn.”
Below we’ve outlined each of the changes announced today that will affect benefits and Universal Credit claimants.
Benefits to rise in line with inflation
In today’s Autumn Statement, Mr Hunt confirmed benefits and the state pension will increase in line with inflation.
The move is set to cost the government £11billion in 2023-24, but will help 10million working age families, Mr Hunt said.
It’ll come into effect in April 2023 and boost the payments for the average family on Universal Credit by £600 a year.
The Department for Work and Pensions (DWP) usually uses September’s inflation figures to make the decision on uprating benefit and pension payments from the following April.
The yearly inflation rate for September came in at 10.1%, compared to 11.1% for October – a 41-year high.
The Sun Money also called for a raise in line with inflation after data showed millions of workers would be hundreds of pounds worse off.
Cost of Living payment
The Autumn Statement also confirmed that millions of people on benefits and Universal Credit will get a new one-off £900 payment.
The Chancellor announced another round of cost of living packages in today’s Autumn Statement.
Pensioners will get £300 and there will be another £150 disability payment.
A means-tested payment of £900 will specifically go to Brits who claim benefits.
Earlier this year, eight million households started receiving payments worth £650 each.
These are given to those who claim Universal Credit, Job Seeker’s Allowance, Employment and Support Allowance, Income Support, Pension Credit, Child Tax Credit and Working Tax Credit.
It is not yet clear if the new payment will have the same criteria, we will update this article when we know more.
Universal Credit claimants asked to work with a coach
More than 600,000 people on Universal Credit will be asked to work with a work coach, it was announced today.
Mr Hunt said he hopes the move will help promote financial independence.
Speaking in the Commons, he said: “We will ask over 600,000 more people on Universal Credit to meet with a work coach so that they can get the support they need to increase their hours or earnings.”
Claimants who work with a work coach enter into what’s called a claimant commitment.
A claimant commitment is an agreement between you and the government outlining what you will do to get Universal Credit payments.
You can find it by logging into your Universal Credit account online.
Raising the benefit cap
The benefit cap will also be raised by 10.1%, in line with September
CPI.
This is so that more households will see their payments increase as a result of uprating from April 2023.
The benefit cap is a limit on the total amount of benefit you can get. It applies to most people aged 16 or over who have not reached State Pension age.
The cap will be raised from £20,000 to £22,020 for families nationally and from £23,000 to £25,323 in Greater London.
While for single adults it will be raised from £13,400 to £14,753 nationally and from £15,410 to £16,967 in Greater London.
The benefit cap affects:
- Universal Credit
- Bereavement Allowance
- Child Benefit
- Child Tax Credit
- Employment and Support Allowance
- Housing Benefit
- Incapacity Benefit
- Income Support
- Jobseeker’s Allowance
- Maternity Allowance
- Severe Disablement Allowance
- Widowed Parent’s Allowance (or Widowed Mother’s Allowance or Widow’s Pension if you started getting it before 9 April 2001)
Managed migration pushed back
The government is also moving back the managed transition of people from employment and support allowance on to Universal Credit to 2028.
Managed migration is the process of moving people over to Universal Credit.
The government has been slowly transferring claimants from old-style benefits to UC – but the migration was paused during the pandemic.
It began in May 2019 and started up again this summer.
Employment and support allowance claimants are still able to make a claim for UC if they believe that they will be better off, and this will not affect the managed migration of other legacy benefits onto UC.
Everyone on the six so-called legacy benefits was set to be moved over to Universal Credit by the end of 2024, the government had said.
It is estimated around 2.6million people are still on these old-style benefits.
The other legacy benefits being replaced by Universal Credit are:
- Working Tax Credit
- Child Tax Credit
- Income-based Jobseeker’s Allowance
- Income Support
- Income-related Employment and Support Allowance
- Housing Benefit
Following today’s announcement, those still on these legacy benefits will also see them increase with inflation.
Investment into cracking down on fraudsters
Over the next two years an extra £280 million is being invested to “crackdown” on fraud and error.
Mr Hunt said: “We will invest an extra £280m in DWP to crack down on benefit fraud and error over the next two years.”
The Chancellor also announced today that the pension triple lock will stay in a £870 boost for seniors.
Also, Minimum wage will rise to £10.42 an hour.
