The 5.8 million people who rely on Universal Credit could see some big changes to their benefit payments after the Chancellor's announcements in the Spring Budget.
Jeremy Hunt has made several switches that mean some could see their Universal Credit payments cut while others will benefit this year. It has already been announced that Universal Credit payments - in line with most benefits - are set to rise by 10.1% from April 1, bringing the basic payment to £368.74 from £334.91 for a single person over 25 and £578.82 from £525.72 for a similar-aged couple. Additional allowances for children, limited capacity for work and carers will also increase.
But changes announced in the so-called 'Back to Work' Budget could affect claims in other ways, depending upon your circumstances. Here we have a look at the four biggest announcements that will impact those on Universal Credit:
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Changes to work requirements
What the Chancellor said: "For those working low hours, we will increase the Administrative Earnings Threshold from the equivalent of 15 hours to 18 hours at National Living Wage for an individual claimant, meaning that anyone working below this level will receive more work coach support alongside a more intensive conditionality regime."
What he meant: More than 100,000 Universal Credit claimants who currently work 15 hours per week will have to step up their hours or face having their benefits cut. The lifting of the Administrative Earnings Threshold from 15 to 18 hours per week means that that anyone currently working fewer than 18 hours will have to meet with DWP job coaches to find more work or risk having their Universal Credit cut.
Who is affected? If you claims Universal Credit to top up your wages and you work 15 hours a week or less, you could have to work more hours to keep your Universal Credit.
Strengthening Universal Credit sanctions
What the Chancellor said: "Sanctions will be applied more rigorously to those who fail to meet strict work-search requirements or choose not to take up a reasonable job offer."
What he meant: The Government will strengthen the application of the Universal Credit sanctions regime, including additional training for Jobcentre work coaches to ensure they are applying sanctions effectively for claimants who do not look for or take up work. The changes will also automate some of the sanctions process, including sending automated messages to claimants who fail to meet their work coach and take active steps to move into work or increase their earnings.
Who is affected? If you don't meet your work-search requirements or choose not to take up a reasonable job offer, you will be more likely to be sanctioned and lose some of your Universal Credit.
Changes to childcare allowance
What the Chancellor said: "I want to reform our childcare system. We have the one of the most expensive systems in the world. Almost half of non-working mothers said they would prefer to work if they could arrange suitable childcare.
"For many women, a career break becomes a career end. Our female participation rate is higher than average for OECD economies, but we trail top performers like Denmark and the Netherlands. If we matched Dutch levels of participation, there would be more than one million more women who want to work, in the labour force. And we can."
What he meant: The Chancellor hopes to encourage more than 700,000 parents on Universal Credit to get a job or raise their hours by introducing sweeping childcare changes to help mums and dads go to work. Currently, parents on Universal Credit can claim back 85% of their childcare costs – but they have to pay upfront before getting any support.
The changes mean childcare payments will soon be paid upfront rather than in arrears, removing a financial barrier for parents to get back into work. The childcare allowance for claimants will be hiked from £646 a month for a single child to £950, and from £1,108 for two children to £1,630, to keep pace with increased childcare costs.
Who is affected? Parents claiming Universal Credit.
Work Capability Assessment scrapped
What the Chancellor said: "Today we publish a White Paper on disability benefits reform. It is the biggest change to our welfare system in a decade. It will abolish the work capability assessment in Great Britain and separate benefit entitlement from an individual’s ability to work. As a result, disabled benefit claimants will always be able to seek work without fear of losing financial support."
What he meant: The Chancellor is hoping to lure disabled people back into the workplace with a package of measures. Currently, people must complete a Work Capability Assessment (WCA) if they are unable to work for health reasons, which can take weeks, and involves paperwork to be filled in and a WCA meeting.
The results are used to decide whether or not you are fit for work for new claimants and those already claiming employment and support allowance (ESA) and Universal Credit with a disability allowance. The WCA will be scrapped so that disabled people can try to work without fear of losing their benefits, and it will reduce the number of assessments needed to qualify for health-related benefits.
Who is affected? Those who claim Universal Credit benefits and have a health condition or disability that affects capability for work.
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