More than 100,000 people in part-time employment could face a benefit cut if they fail to properly look for more work, the Chancellor announced in his mini-budget on Friday. Among a range of measures revealed by Kwasi Kwarteng is a significant shake-up of the benefits system.
The Tory Chancellor announced, during his statement, a rise in the number of hours a week on the National Living Wage people will have to work in order to still claim Universal Credit. The current threshold is nine hours a week on the National Living Wage, however it will rise to 12 hours from Monday.
Kwarteng announced earlier it will rise again to 15 hours per week. Those claiming could have their benefits sanctioned if they fail to take active steps to boost their income. Under the new changes, claimants aged over 50 will also get extra support from work coaches, while the newly unemployed will receive nine months of targeted sessions.
The Treasury believes that rising economic inactivity among the over-50s is contributing to a shortage in the jobs market, driving up inflation and limiting growth.
A return to pre-pandemic economic activity among over-50s, according to a UK Government estimate, could boost GDP by up to one percentage point.
Mr Kwarteng said earlier in the week: “Our jobs market is remarkably resilient, but it is not perfect. While unemployment is at its lowest rate for nearly 50 years, the high number of vacancies that still exist and inactivity in the labour market is limiting economic growth.
“We must get Britain working again. These gradual changes focus on getting people back into work and maximising the hours people take on to help grow the economy and raise living standards for all.
“It’s a win-win.
“It boosts incomes for families and helps businesses get the domestic workers they need, all while supporting economic growth.”
Work and Pensions Secretary Chloe Smith said of the plan: “Whether it’s increasing their hours in their current role, entering a new sector or switching careers, we want people of all ages and all stages to be able to progress into fulfilling careers.
“The expertise our dedicated DWP work coaches bring will help to drive this change by removing barriers to progression and opening up opportunities for training and building skills, to increase earnings.”
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