More than 100,000 Universal Credit claimants will be pressured into increasing their hours or find more work as part of a huge benefits shake-up.
If you fail to meet your “claimant commitments” then you could have your benefits stopped.
Universal Credit is an “all-in-one” benefit that is replacing six older welfare payments. It is based on how much you earn rather than the hours you work.
A so-called “managed migration” process to transfer everyone on legacy benefits to Universal Credit is currently underway, with the aim of having this completed by 2024.
We explain the latest rule change coming to Universal Credit claimants - and an expansion of this confirmed by the Government in Kwasi Kwarteng's Mini-Budget today.
Universal Credit rule change in full
At the moment, those working up to nine hours a week at the National Minimum Wage are in the "intensive work search group" which means they need to go to the JobCentre regularly and actively look for more work.
Those working above the nine hours a week threshold are in the "light touch" work group where you're not required to look for work and you have less contact with the JobCentre.
But from this Monday (September 26) the number of hours you need to stay in the "light touch" group is rising to 12 hours a week at the National Living Wage.
It means you might be required to increase your hours or look for more work if you fall below this threshold.
Chancellor Kwasi Kwarteng today confirmed that this will rise again to 15 hours from January 2023. Some 120,000 people will be affected by these changes.
Those who are unable to work due to long-term sickness or a disability are exempt from sanctions.
What does the Government say?
Chancellor Kwasi Kwarteng said: "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."
How much is Universal Credit?
Universal Credit is made up of a standard allowance and any extra amounts that apply to you.
For example, if you have children, a disability or a health condition.
Your Universal Credit is then subject to deductions based on your savings and, if you are working, how much you earn.
Department for Work and Pensions (DWP) bosses will look at your circumstances each month - known as your assessment period - to see how much you’re entitled to.
This means your Universal Credit allowance can fluctuate from month to month, if your earnings change regularly.
Standard allowance
The standard allowance is the basic amount of Universal Credit you could get before any enhanced amount or deductions are taken into account.
It depends on your individual circumstances, including your age and if you’re in a couple.
Single
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Single under 25: £265.31
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Single 25 or over: £334.91
Couple
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Joint claimants both under 25: £416.45
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Joint claimants, one or both 25 or over: £525.72
Here are some of the extra elements you may be entitled to, which are also rising:
If you have children
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First child (born prior to 6 April 2017): £290.00
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First child (born on or after 6 April 2017) or second child and subsequent child (where an exception or transitional provision applies): £244.58
If you have a disability or health condition
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Limited capability for work or work-related activity: £354.28
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Limited capability for work and you started your health-related Universal Credit or Employment and Support Allowance (ESA) claim before 3 April 2017: £132.89
If you care for a severely disabled person
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If you care for someone for at least 35 hours a week and that person also receives a disability-related benefit: £168.81
Work allowance
Some people can earn a certain amount of money before their earnings begin to affect their Universal Credit. This is known as the work allowance.
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Work allowance (no housing amount) for someone claiming Universal Credit with one or more dependent children or limited capability for work: £573
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Lower work allowance for someone claiming Universal Credit with one or more dependent children or limited capability for work: £344
