MILLIONS receiving benefits could have their payments cut next year – but some might not be affected.
Liz Truss has refused to commit to raising Universal Credit in line with inflation from next April.
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Instead, they could go up in line with average earnings, which is a lower amount.
If incomes don’t rise at the same rate as prices it leaves people worse off and is pay cut in real terms.
But The Treasury is considering excluding those with disabilities and caring responsibilities from the benefits cut, according to The Times.
It has now been suggested that those receiving Universal Credit linked to disability or care issues will have their allowance increased in line with inflation.
The current rate of inflation is 9.9% but wages are growing on average by 5.4%.
It means people on benefits that don’t claim disability or carers allowance could get what’s known as a real-terms pay cut.
It’s expected the DWP will confirm how benefits will be uprated in November.
The benefits that would see a real-term pay cut if they were to rise in line with average earnings and not inflation are:
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- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Income Support
- Tax Credits (Child Tax Credit and Working Tax Credit)
- Housing Benefit
- Council Tax Support
- Social Fund (Sure Start Maternity Grant, Funeral Payment, Cold Weather Payment)
- Universal Credit
- Child Benefit
Those on Universal Credit can get different amounts depending on their circumstances.
If you’re single and under 25 your monthly standard allowance is £265.31.
If you’re over 25, the standard allowance per month is £334.91.
But it’s now suggested that those who claim Universal Credit with extra amounts for limited capability for work and or extra amounts for being a carer could still their payments rise by inflation.
Those claiming extra amounts for limited capability for work can have their Universal Credit payments boosted by up to £354.28 a month.
And those claiming extra amounts for being a carer can have their monthly payments boosted by £168.81.
Individuals receiving attendance allowance may also see their payments rise with inflation.
This helps with extra costs if you have a disability severe enough that you need someone to help look after you.
It’s paid at two different rates and how much you get depends on the level of care that you need because of your disability.
The higher rate is £92.40, while the lower rate is £61.85.
A DWP spokesperson said: “The Secretary of State commences her statutory annual review of benefits and State Pensions from late October using the most recent prices and earnings indices available.
“We are committed to looking after the most vulnerable which is why we’ve delivered at least £1,200 of support to families this winter while also saving households an average of £1,000 a year through our Energy Price Guarantee.
“This support is on top of the annual working-age benefits bill which is over £87 billion.”
You can figure out how much your benefits would go up or down based on average earnings or inflation.
If that were to go up next April based on inflation in August, which was 9.9%, those on the standard allowance under 25 would receive £291.57 instead.
And if it were to go up based on the average UK wages in August, 5.4%, you would receive £279.63.
That’s a difference of £11.94 a month or £143.28 over a year.
However these figures are hypothetical and could go up or down depending on what inflation and average earnings are in September.
The Department for Work and Pensions (DWP) usually uses September’s inflation figures to make the decision on benefit uprating from the following April.
September’s rate of inflation will be revealed this month.
