Benefits rise by 6.7 per cent – what that means for universal credit payments

Benefits rise by 6.7 per cent

Benefits rise was announced by the Chancellor as the cost of living issue continues to affect individuals across the UK.

As the cost of living issue continues to affect individuals throughout the UK, Chancellor Jeremy Hunt has announced that benefits would rise by 6.7%, in line with September’s inflation number.

Benefits rise by 6.7 per cent

It implies that in April 2024, universal credit will rise from £368.74 to about £393.44 per month.

Mr Hunt was allegedly considering reducing the amount of benefits increased by next year in order to create way for tax cuts.

Every April, benefits like universal credit are “uprated,” or increased, in accordance with the Consumer Prices Index (CPI) measure of inflation from the previous September.

It comes despite the fact that several experts, including former pensions minister Sir Steve Webb, have suggested that the Government will adopt the lower number of 4.6% beginning in October.

What benefits rise has been announced?

According to the Chancellor’s statement on Wednesday, working-age benefits will rise by 6.7% in April 2024.

“I appreciate the concerns some have regarding the impact of work incentives on matching benefit increases to inflation,” Mr. Hunt stated.

Because the poorest households continue to face the greatest challenges from rising costs of living, the government has decided to match September’s inflation estimate by raising universal credit and other benefits by 6.7% starting in April of next year.

“A compassionate Conservative government providing vital support to those on the lowest incomes.”

As part of efforts to reduce the welfare expenditure and increase employment, the Chancellor also announced harsher penalties for universal credit applicants prior to the Autumn Statement.

If out-of-work benefit claimants do not find employment or participate in work placements, they will lose all support under such arrangements.

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Increased benefit sanctions would mean that, after six months, those who choose not to look for work will no longer get any assistance, including free prescription drugs and legal aid.

Under the stricter regulations, digital technologies would also be used to “track” participation at job fairs and interviews.

According to reports in The Guardian, the idea may cost about £2.5 billion over the course of five years. Meanwhile, The Times said that those with mental health and mobility issues might be forced to search for employment they could perform from home or risk having their benefits cut.

According to Mr. Hunt, benefits would not be granted to “anyone choosing to coast on the hard work of taxpayers” as a result of the harsher penalties.

Regarding welfare payments, Rishi Sunak recently declared that the fact that almost two million individuals of working age did not have a job was a “national scandal” and “not sustainable,” vowing to change the system.

His remarks come after Mr Hunt warned over the weekend that “difficult decisions to reform the welfare state” were required, and after the Chancellor and Secretary of State for Work and Pensions Mel Stride unveiled the Back to Work Plan last week.

Charities, on the other hand, were outraged by the planned measures.

The growth in the use of penalties, according to Vicki Nash, assistant director for policy and campaigns at mental health charity Mind, is “deeply concerning,” adding, “Evidence has repeatedly shown they don’t work and make people’s mental health worse.”

What was predicted?

If October’s inflation numbers had been used instead of September’s, it would have equivalent to between £6 and £8 less per month for single claimants and between £9 and £12 less per month for couples.

However, the significant pushback to the decision, as well as campaigners warning that it would be a mistake at a time when families are still struggling with the cost of living issue, made it more likely that Mr Hunt would continue with the higher amount.

What does Benefits rise mean for universal credit payments?

With a 6.7% increase in benefits, universal credit will rise from £368.74 per month in April 2024 to about £393.44.

The allowance would have climbed to £385.70 if the allowance had increased by 4.6%.

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