MILLIONS receiving benefits including Universal Credit will get a payment boost from April 2023.
However, the amount that payments will increase by will depend entirely on what type of benefits households claim.
Nine specific benefits must see their payments rise by the rate of inflation according to UK law.
The announcement is expected in the Budget next week, but Jeremy Hunt is expected to confirm that they will.
For many years, benefits have been raised each April in line with September’s rate of inflation – which currently sits at 10.1%.
Under Liz Trussâ government, ministers refused to confirm whether this would be the case for April 2023.
The government under the former PM had considered using a different, lower, measure, raising payments in line with wages instead.
This would mean a rise by 5.5% instead of 10.1% next spring – representing a substantial real-terms pay cut.
Former Prime Minister Gordon Brown estimates this would leave struggling families Â£40 a week worse off, or Â£2,000 a year.
Benefits are already lagging a long way behind runaway living costs, leaving many facing a shortfall.
When they were last increased in April 2022, it was based on the previous Septemberâs inflation figure of 3.1%.
It remains in the hands of Rishi Sunak to decide whether or not all benefit payments will rise in line with inflation.
Which benefits must rise in line with inflation?
The following nine benefits are legally required to have their payments rise with the previous September’s rate of inflation each April:
- Personal independence payment (PIP)
- Disability living allowance
- Attendance allowance
- Incapacity benefit
- Severe disablement allowance
- Industrial injuries benefit
- Carer’s allowance
- Additional state pension
- Guardian’s allowance
Each of the above benefits are expected to rise by 10.1% from April 2023, though the government has yet to confirm that.
We’ve listed some examples of how much you can expect payments will rise next year based on inflation of 10.1%.
Personal independence payment (PIP)
People with long-term health conditions or disabilities can get extra help from a benefit known as personal independent payment (PIP).
PIP is made up of two parts and whether you get one or both of these depend on how severely your condition affects you.
You may get the mobility part of PIP if you need help going out or moving around. The weekly rate for this is either Â£24.45 or Â£64.50.
While on the daily living part of PIP, the weekly rate is either Â£61.85 or Â£92.40 – and you could get both elements, so up to Â£156.90 in total.
If you get the maximum amount, you can expect your payments to rise from Â£156.90 a week to Â£172.75 a week from April 2023 – up by Â£15.85 a week.
Disability living allowance
Disability living allowance is made up of two parts, the “care component” and the “mobility component”.
To get DLA you must be eligible for at least one of the components.
If you receive the highest care component, right now you’ll get Â£92.40 a week.
From April 2023, your weekly payments would rise from Â£92.40 to Â£101.73 – up by Â£9.33 a week.
The lower rate is worth Â£61.85 a week. Payments will rise by 10.1% from April 2023.
Which benefits could rise by less?
The following 10 benefits could rise by wages instead of inflation.
But the government has not yet confirmed how much payments will rise yet, and they could still go up by the higher amount.
- Universal Credit
- Child benefit
- Contributory employment and support allowance
- Contributory jobseeker’s allowance
- Statutory maternity/paternity pay and maternity allowance
- Income-based jobseeker’s allowance (JSA)
- Income-related employment and support allowance (ESA)
- Income support
- Working tax credit
- Child tax credit
Itâs not yet known exactly how the Government would calculate the benefits rise if it decides to link it to wages instead of inflation.
But itâs thought ministers could use the figure of 5.5% because this is the average increase in total earnings from May-July 2022 that was released by officials last week.
If it does, those on benefits will still see an increase in the amount of money they receive.
But in real terms, they will feel a whole lot worse off because rocketing costs mean theyâll be able to buy less with their money.
That’s because rates will not be matched against runaway inflation, which is what goods and services are worth in a country.
If it is higher, that means everyday essentials such as food are more expensive.
We’ve listed some examples of how much Universal Credit, housing benefit and income support payments could rise next year.
Almost five million people claim Universal Credit, which was first introduced in 2013.
Under the system, you receive different amounts depending on your circumstances:
- If you’re single and under 25 – Â£265.31
- If you’re single and 25 or over – Â£334.91
- If you live with your partner and you’re both under 25 – Â£416.45 (for you both)
- If you live with your partner and either of you are 25 or over Â£525.72 (for you both)
If you live with your partner and you’re both under 25 you’ll currently be getting Â£416.45 between you a month.
If your Universal Credit were to rise in line with inflation at 10.1%, your payment would go up by Â£41.64 to Â£458.51.
If it were to rise in line with wages at 5.5%, your payment would go up by Â£25.19 to Â£441.64. That’s over Â£15 less per month.
Housing benefit is designed to help you pay your rent if you’re unemployed, on a low income or claiming benefits.
It is being replaced by Universal Credit through what’s called “Managed Migration”, however not everyone has been transferred across yet.
What you get through Housing Benefit depends on your circumstances – including how much you pay in rent, where you live and your personal circumstances.
But if you were theoretically receiving Â£100 every four weeks and that were to rise in line with inflation at 10%, you would receive Â£110.10 a month, a Â£10 pay rise.
If it were to go up with wages at 5.5%, you would receive Â£105.50 a month, a Â£5.50 pay rise. That’s a difference of Â£4.50.
Over the course of a year, that’s a Â£234 difference.
Income support is extra money for people who don’t have enough to live on.
It’s a means-tested benefit which means your income, savings and any sources of cash are taken into consideration when deciding how much you’ll receive.
How much you get depends on your personal circumstances, however if you’re single and aged between 16 and 24, your weekly payments start from Â£61.05.
If it were to go up in line with inflation at 10.1%, you would receive Â£67.22 a week – a Â£6 a week pay rise.
If you are aged between 16 and 24 and single and your weekly payment were to go up in line with wages at 5.5%, you would receive Â£64.40 a week – a Â£3.35 increase.
It’s also worth noting that millions of Brits are missing out on other benefits they’re entitled to adding up to billions of pounds in total.
Benefit calculators can help you check what you could be entitled to.
There are several benefit checker tools you can use – here’s our guide.