MILLIONS of Brits will be impacted by major changes to Universal Credit and benefits, announced in the Autumn Statement today.
From harsher rules for the unemployed to a payment boost from next April, we round up all you need to know.
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The Autumn Statement provides an update on the government’s plans for the economy, including spending.
These are issued twice a year, once at the Budget in the spring and once at the Autumn Statement.
In his Autumn Statement Chancellor Jeremy Hunt announced:
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Below we’ve outlined each of the changes 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 September inflation.
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.
However, there were concerns that the government was planning to use a lower inflationary figure to uprate welfare payments.
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The yearly inflation rate for September came in at 6.7%, compared to 4.6% for October.
The payment boost comes into effect in April 2024 and hikes the payments for the average family on Universal Credit by £470 a year.
Tighter benefit rules
Millions of Brits could be stripped of their benefits if they fail to find a job within 18 months.
It’s part of plans to help people with long-term conditions, disabilities or long-term unemployment to look for and stay in work.
More than £1.3billion in funding is being offered to 300,000 people who have been unemployed for more than a year.
Those who don’t get a job within 18 months will be forced to take on work experience under plans to get more people into employment.
And households who don’t comply will have their benefits, including access to free prescriptions and legal aid, cut off.
Help for renters
The government is to increase Local Housing Allowance for the first time since April 2020.
Local Housing Allowance (LHA) sets the maximum amount people renting from a private landlord can claim in Housing Benefit or Universal Credit.
Around 38% of England’s 4.6million private renters receive housing benefit.
The amount you can claim depends on the area you live in and the size of the property you rent.
Local Housing Allowance will be increased to cover the cheapest 30% of local market rents.
This means anyone renting a home that is among the cheapest 30% of private rental properties in their area should be able to cover their entire rent with housing benefit.
The Chancellor has been under pressure to up the allowance by charities such as Crisis and Shelter, as well as private landlords and MPs.
Changes to Help to Save
The Help to Save scheme is designed to encourage those on certain benefits to save money.
You can sign up if you’re on Universal Credit, Working Tax Credit or Child Tax Credit.
In today’s budget documents, the government says it is looking at reforming the scheme by adding a bonus to savings.
It says the change will: “Ensure the scheme’s sustainability as a key savings product, encourage take-up and provide the best value for taxpayers.”
The details of the changes are yet to finalised and a consultation is set to be launched into the most effective way to deliver it.
Under the scheme, the government gives you 50p for every £1 you save in your account over four years.
You can save between £1 and £50 each calendar month and pay the money in via standing order or bank transfer.
That means if you put the maximum £50 in each month from April 2023 for two years you would get back £600 from the government in total.
Just under 400,000 people have opened a Help to Save account since it launched in September 2018, according to the government’s recent figures.
You can open a Help to Save account if you are:
- Receiving working tax credit
- Are entitled to working tax credit and receiving child tax credit
- Claiming Universal Credit and you (with your partner if it’s a joint claim) earned £658.64 or more in your last monthly assessment period
You can apply for an account via Gov.UK.
Surplus earnings threshold extended
Universal Credit claimants will continue to get the higher surplus earnings threshold of £2,500 until April 2025.
Surplus earnings are taken into account in your next monthly assessment period for Universal Credit.
For example, if your monthly earnings are more than £2,500 over where your payment stopped – the current threshold – this becomes “surplus earnings”.
These surplus earnings are then carried forward to the following month, where they count towards your earnings.
If your regular income and surplus earnings are then still over the amount where your payment stops, your Universal Credit payment will be affected.
Reduce waiting times for Personal Independence Payment (PIP)
The Department for Work and Pensions (DWP) is continuing to work to reduce waiting times for new personal independence payments (PIP) claims.
In August, the DWP said it is trialling the use of online applications for new PIP claims.
This is set to be extended until November 2024 to ensure that new claimants aren’t facing “excessive wait times”.
Extension to Universal Support
Universal Support is a new employment programme for disabled people and those with long-term health conditions claiming Universal Credit.
It is aimed at matching participants with jobs, funding support and training with a view to them finding long-term work.
The voluntary scheme was expected to help 25,000 people move towards employment by September next year.
But the Government has revealed today that it plans to double the number of yearly places to 100,000.
The Department for Work and Pensions (DWP) said previously that those who are eligible will be contacted and referred by work coaches to take part in the scheme.
Meanwhile, we reveal four hidden announcements in the Autumn Statement document – and it’s good news for savers and first-time buyers
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