MILLIONS of households on Universal Credit and other benefits will be impacted by a number of changes in 2023.
Families will be hoping for a less turbulent year but there are still some key things to take note of.
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From increased payments to the triple lock on the state pension being reinstated, we reveal all the key changes coming next year.
Changes to work rules
The rules around looking or preparing for work as part of receiving Universal Credit will change from January.
There will be changes to so-called in-work conditionality, impacting an estimated 120,000 claimants.
Conditionality means work-related activities a claimant has to do to get their full entitlement of Universal Credit.
This means for people earning the equivalent of over 15 hours per week at the National Living Wage but less than full-time hours will have to look for more or better paid work.
The threshold is currently set at 12 hours.
Each person on Universal Credit is assigned to one of six “conditionality regimes” based on their capability to work.
In most cases you’ll be put into the “all work-related activity group”.
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That’s unless certain exceptions apply such as you have a disability, you’re pregnant, you’re in full time education or you’re responsible for a child.
You can check your Universal Credit account online to see what group you belong in and how January’s change might impact you.
Or you can you speak to your work coach or organisations such as Citizens Advice and Turn2Us.
Scottish households to get new benefit
The Low Income Winter Heating Assistance (LIWHA) will replace the Cold Weather Payment in Scotland from February.
But it is still designed to help low income households pay for fuel costs over the winter.
And the benefits that qualify you for the Cold Weather Payment will be the same for LIWHA.
This includes if you receive pension credit, income support or income-based jobseeker’s allowance, income-related employment support allowance and Universal Credit.
The benefit will be administered by Social Security Scotland and be worth a fixed £50 annually.
If you are eligible, the payment will be made automatically and you don’t need to apply.
Benefits to rise
From April, a number of benefits will rise in line with the consumer price index (CPI) level of inflation in September 2022.
There are certain benefits that by law have to go up in line with the figure, but some don’t.
However, in November chancellor Jeremy Hunt announced a number would increase from April during his Autumn Statement.
That means millions, including those on Universal Credit, will see their payments go up by 10.1%.
So if you’re single and under 25 your standard monthly allowance for Universal Credit is currently £265.31. That will go up to £292.11 from April.
You don’t have to do anything to get the pay rise as they will be automatic.
State pension triple lock reinstated
The triple lock was introduced by the government in 2010 and is designed so that state pension payments don’t fall behind the cost of living.
Under the system, the state pension should increase each year in line with whatever is highest out of:
- The CPI level of inflation in September of the previous year
- the average increase in wages across the UK
- 2.5%
The government was believed to be considering increasing the state pension in line with average wages instead. That would have meant a rise of 5.7%
However, in November Jeremy Hunt announced the state pension will rise from April in line with the CPI level of inflation from September this year, which is 10.1%.
That means those on the full, new flat-rate state pension will see their weekly payments go up to £203.85 from £185.15.
Those on the old basic state pension will see their weekly payments go to £156.20 a week from £141.85.
You don’t have to do anything to get the higher amount as payments will rise automatically.
For the full list of eight pension changes coming in 2023, you can read our story here.
Cost of living payments
In November, Jeremy Hunt also announced a second batch of cost of living payments to help struggling households.
There will be a £900, £150 and £300 payment.
Depending on your circumstances, you could be eligible for all three.
But when the payments will be made has not yet been confirmed.
Martin Lewis has predicted the £900 payment will be made in winter 2023 though.
How you’ll apply for the payments hasn’t been confirmed yet either.
However, if the process is the same as previous cost of living payments, you won’t have to do anything and will just have to sit tight and wait for the money.
Scottish carers to see benefit change
Carer’s allowance is a payment made to Scots caring for someone else.
Eligible households normally get payments in June and December.
But from winter 2023 the benefit will be replaced with Scottish carer’s assistance.
It is hoped the switch will be complete by Spring 2024.
Households who are already receiving carer’s allowance will be transferred on to the new benefit so they don’t have to do anything.
Managed migration
Millions of people on old-style “legacy benefits” are being moved on to Universal Credit through so-called managed migration.
That includes those on income support, housing benefit and child tax credits.
The plan was originally to have moved everyone by the end of 2024.
However, this date has now been moved back meaning the majority of people will be shifted across by March 2025.
People who get employment and support allowance and do not get tax credits will be moved across by the end of 2028.
The Department for Work and Pensions, which is handling the transition, will write to you when you’re ready to be moved across.
In other news, thousands of households are set for £50 in free cash within days.
Plus, we explain what the Christmas bank holidays mean for your bin collection days.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
