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Six Universal Credit changes revealed in the Autumn Statement – here’s how they affect you

CHANCELLOR Jeremy Hunt revealed a list of changes to benefits and Universal Credit during his Autumn Statement.

Cast-tight Brits will be receiving more help to tackle the rising cost of living and soaring energy bills.

Six changes are coming for those on Universal Credit

This week’s Autumn Statement unveiled a number of new benefit changes and extra payments to curve high spending.

Among those changes, Mr Hunt announced a freeze on income tax and National Insurance thresholds, and minimum wage to rise to £10.42 an hour.

But there were also a number of announcements related to Universal Credit.

We explore what those are and how they can affect you below.

Payments will rise in line with 10.1% inflation

Households on benefits including Universal Credit and pension credit will see their payments rise in line with September’s inflation rate.

The move is set to cost the government £11billion in 2023-24, but will help 10million working age families.

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.

Extra cost of living payments

The Chancellor told the House of Commons that over eight million struggling households will be paid a one-off £900 support payment.

It’s yet to be disclosed by the DWP when this payment will be issued along with exact eligibility.

It’ll be paid in multiple instalments, so you’ll get it over a series of payments rather than all at once. 

For example, this is similar to the £400 energy bill support payment that is being paid in instalments of £66 over a six-month period. 

Those who claim the £650 one-off payment are receiving one of the following benefits, so you should base it off this list for now:

  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Pension Credit
  • 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

For the previous payments, you had to be entitled, or later found to be entitled to one of these benefits by a certain date.

The payment is part of a £26billion government package.

It will be tax-free and will not have any effect on any existing benefit payments that you receive. 

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

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 the chancellor’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.”

For a full list of Autumn Statement announcements, read our round-up here.

And many households will be entitled to further help from their council area as Jeremy Hunt extends the Household Support Fund.

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