One of the most popular benefit payments administered by the Department for Work and Pensions (DWP) is Universal Credit. It is designed to help those financially who are out of work or seeking employment for periods of time. A series of changes are set to be implemented next year which will affect Universal Credit and how much people will get from it.
The UK is currently in the midst of a cost of living crisis which is being caused by soaring inflation and energy bills.
Recently, the Bank of England forecast a two-year long recession which will place further financial strain on households which are already struggling.
In light of this, pending changes to Universal Credit are set to have an impact on how much people get which could lead them to getting bigger payments down the line.
Here is a full list of the changes that are set to happen to Universal Credit in 2023, and when they will take place:
- Increase in administrative earnings threshold – January 2023
- Benefit payment rise – April 2023
- Move from legacy benefits to Universal Credit – during the year
- Cost of living payment – during the year.
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Increase in administrative earnings threshold
Earlier this year, the Government announced that the administrative earnings threshold (AET) would be raised with claimants with no earnings or earnings below the threshold placed under an intensive work search regime.
Universal Credit claimants impacted by this will face extra pressure to find work from the DWP and need to attend mandatory work search reviews to maintain getting their benefit payments.
In September, the AET was raised from £355 to £494 a month for a single claimant and from £567 to £782 a month for a couple, placing 114,000 Universal Credit recipients into a stricter system.
However in January 2023, the administrative earnings threshold is set to be raised even further for those on Universal Credit to £617 per month for single people and £782 per month for couples.
Benefit payment rise
During his Autumn Statement, Chancellor Jeremy Hunt confirmed that the majority of benefit payments from the DWP would receive a sizable rate hike of 10.1 percent, including Universal Credit.
This payment increase is the same as the Consumer Price Index (CPI) rate of inflation for September 2022 which is also the metric being used to determine the state pension under the triple lock.
Currently, those who are single and under 25 get the standard Universal Credit allowance of £265.31 per month with people over 25 getting £334.91. With the 10.1 percent rate hike, this will be £292.11 and £368.74 monthly, respectively.
After the benefit payment rises, those in a couple who are both under 25 will get £458.51 a month, with a couple where someone is over 25 getting £578.82 for that period of time.
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Cost of living payment
Earlier this year, the Government rolled out a cost of living payment worth £650 for those on means-tested benefit payments from the DWP, including Universal Credit.
This support was handed out in two instalments which were delivered in different parts of the year.
Another cost of living payment for those on means-tested benefits is being rolled out in 2023 but this time it will be worth £900.
Here is a full list of the means-tested benefits which qualify someone for this support, outside of Universal Credit:
- Income-based Jobseekers Allowance
- Income-related Employment and Support Allowance
- Income Support
- Working Tax Credit
- Child Tax Credit
- Pension Credit.