Some Universal Credit claimants could be in for an increase in the spring.
The annual rise in benefit payments saw Universal Credit jump up by 6.7% in April 2024, however, this year the annual uplift may not be as high as many had hoped.
Benefits will be increasing by 1.7%, as confirmed by Chancellor Rachel Reeves last October in line with the inflation rates at the time. However, some claimants will be able to get extra help.
The Department for Work and Pensions is revamping some benefits in the spring as the start of the new financial year marks the beginning of Labour’s benefit overhaul.
From April, people on Universal Credit who have deductions, for example debts that are being paid off their benefits before they even receive the money, will likely see a substantial improvement as the deduction cap is dropping by 10%.
This means instead of potentially losing a maximum of 25% of their standard allowance to deductions, only 15% of their standard allowance can be taken away.
Moreover, from September, the Government will increase the number of free childcare hours, with additional support available for parents on Universal Credit to cover extra costs. For those claimants with disabilities, their benefits will undergo significant changes as part of Labour’s strategy to integrate more benefit recipients into the workforce.
The limited capability for work and work-related activity elements will be abolished and a new health element will be introduced. Claimants will undergo a revised Work Capability Assessment while existing limited capability claimants will be offered a Chance to Work Guarantee.
Families with disabled children will experience slightly higher financial increases. The higher disability rate for children receiving enhanced care under Disability Living Allowance (DLA) or Personal Independence Payment (PIP), will rise from £487.58 to £495.87 monthly, according to Mirror.
The lower rate for disabled children will also increase, from £156.11 to £158.76 per month. More details on the upcoming benefit changes can be found on the Gov.uk website.
However, arguably the most contentious aspect of Labour’s benefits reforms is the continuation of the two-child limit which will still apply to Universal Credit.
The Gov.uk website has outlined the provisions for individuals transitioning from legacy benefits to Universal Credit, especially for those with more than two children. It states: “If you currently claim benefits or tax credits and aren’t moving to Universal Credit until a later date, you’ll continue to be paid an additional amount for each child you look after as long as you remain responsible for the same children and your circumstances remain the same.”
