Over the coming year, there will be a number of changes for British citizens receiving Universal Credit and other Department for Work and Pensions (DWP) and HMRC benefits.
Following the announcement of numerous reforms in the Autumn statement in November, the Government has decided to concentrate on the benefit system over the next years.
All of the significant modifications that will be implemented throughout the course of the upcoming year are compiled here. We also go into the significance of these adjustments and how they will impact you.
Benefit payouts will increase in April
Beginning in April, millions of recipients of DWP and HMRC benefits will receive higher payments. In September, the government announced in the Autumn Statement that benefits will increase in accordance with the 6.7% inflation rate.
A single person receiving Universal Credit over 25 would now receive an additional £24.71 per month as a result of the increase. The standard allowance, which is determined by your age and whether you are claiming alone or with a partner, will increase in April and be as follows:
- Single under 25: £292.11 a month to £311.68 a month
- Single 25 or over: £368.74 a month to £393.45 a month
- Joint claimants both under 25: £458.51 a month to £489.23 a month
- Joint claimants, one or both 25 or over: £578.82 a month to £617.60 a month
Benefits cap to be frozen
Beginning in April, the benefits cap—the maximum amount that a household may receive—will remain fixed at its current level. It will therefore not increase in tandem with welfare payments.
The maximum benefit is determined by your residence, whether you are filing as an individual or as a couple, whether you have children, and more. The maximum was once set at £14,753 for single persons, or £16,967 for those living in London, and £22,020 for families, or £25,323, per year, before the Government raised it this year.
The quota has been locked since 2016. More homes are anticipated to hit the limit as a result of the upcoming freeze. The Child Poverty Action Group (CPAG) reports that 85,000 households have already seen a reduction in their assistance payments as a result of the cap.
Local housing allowance increase
Effective in April 2024, the government will raise the Local Housing Allowance for the first time since 2020. The maximum amount that tenants of private landlords are eligible to receive in Housing Benefit or Universal Credit is determined by the Local Housing Allowance (LHA).
The size of the home you rent and where you live will determine how much you are eligible to receive. Nevertheless, Local Housing Allowances have not kept up with the explosive increase in rental rates during the past two years.
The Local Housing Allowance will be raised to meet the lowest 30% of local market rents starting in April. Accordingly, every renter residing in one of the area’s 30% most affordable private rental homes ought should be able to pay their full rent in housing benefits.
Surplus earnings threshold extended
The £2,500 excess earning cap will be maintained through April 2025, an additional year. Your wages from the prior month may have an impact on your Universal Credit payment under the existing guidelines.
You are considered to have “surplus earning” if your income exceeds £2,500 beyond the maximum amount you can make before your claim is terminated. Your excess profits will then be deducted from your earnings during the subsequent monthly assessment period.
The present excess earning cap of £2,500 was supposed to expire in April 2022 and be lowered to £300, but it was extended instead. Chancellor Jeremy Hunt declared in the most recent Autumn Statement that it will stay at this level until April 2025.
Tighter benefit rules
In its Autumn Statement, the government unveiled a wide range of measures aimed at encouraging recipients of Universal Credit to find employment.
Beginning in April 2024 and continuing over the next five years, the focus will be on long-term unemployed individuals and those with chronic health concerns.
If an individual in England or Wales is unemployed after 18 months, they will be required to participate in work placements starting in late 2024.
Should they decline, their eligibility for free legal assistance and prescription drugs may be terminated.
Additionally, their benefit payments can be completely discontinued. If a person has not communicated with their job centre for more than six months, their claim may also be closed.
Changes to PIP applications
Additionally, the DWP is keeping up its efforts to shorten the wait periods for new claims of personal independence payments (PIP).
With the intention of expanding the application process moving forward to address “excessive wait times,” the Department for Work and Pensions (DWP) announced in August of this year that it was testing the use of online applications for new PIP claims in specific regions of the UK.
The DWP intends to extend the application procedure to all of England, Wales, and Northern Ireland by 2024.
Now, it covers more than 160 postcodes in England. It takes 13 weeks to process new PIP claims from the time they are first submitted until award decision letters are issued.
Managed migration rollout
The DWP is currently in the process of moving people claiming “legacy benefits” such as tax credits and Job Seekers Allowance (JSA) onto Universal Credit.
“Managed migration” is the term for the transition, which began in 2019. The pandemic caused a temporary halt to the process, which was resumed in May 2022.
According to the DWP, the majority of tax credit users should have received migration letters by the end of 2024, with completion expected by March 2025.
However by 2028, those claiming employment and assistance allowance (ESA) rather than tax credits will be transferred. certain regions of the nation for every phase of the implementation, with more regions designated to get “migration notices” all year round.
You have three months to begin claiming Universal Credit if you have received a migration notice in the mail. Moreover, your current benefits will terminate if you do not file a claim during this period.