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Scottish Sun
11 hours ago
- Business
- Scottish Sun
Millions on Universal Credit to get guaranteed extra pay rises each year under government plans
However, the government is also slashing incapacity payments HELPING HAND Millions on Universal Credit to get guaranteed extra pay rises each year under government plans Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) MILLIONS of households on Universal Credit are set to receive a bumper set of inflation-busting pay boosts, starting next April. Almost seven million households will see their standard allowance rise by £725 more a year in cash terms by 2030, according to a new Bill introduced to Parliament this afternoon. Sign up for Scottish Sun newsletter Sign up 1 Benefit payments usually go up each spring to help people keep pace with the rising cost of living, like food, fuel, and household bills The DWP's Universal Credit and Personal Independence Payment Bill, which requires parliamentary approval, explains exactly how the standard allowance will change every April for the next four years. The standard allowance is the basic payment for households on Universal Credit. Currently, single people under 25 receive £316.98 a month and couples under 25 get £497.55 a month. Meanwhile, single people over 25 get £400.14 a month and couples aged 25 or older receive £628.10 a month. Normally, benefit payments go up each spring to help people keep pace with the rising cost of living, like food, fuel, and household bills. These increases typically match the consumer price index of inflation from the previous September. But, the government has claimed that the four-year benefit freeze from 2015 to 2019 has caused millions of payments to fall behind rising inflation. As a result, from April 2026, the government is proposing to hike the standard allowance by more than inflation over the next four years. This means that by 2030, the amount a claimant receives will be almost 5% higher than if it had only risen to match inflation. The increases will be worked out by adding the inflation rate from the previous September, plus an extra fixed boost. Rachel Reeves delivers the Spring Budget in full These extra percentages will be set at: 2.3% for 2026-27 3.1% for 2027-28 4.0% for 2028-29 4.8% for 2029-30 The government wants to help more people return to work and rely less on incapacity benefits, which face huge cuts. To save £5billion a year by 2030, it plans to make PIP assessments stricter and freeze the extra health payments in Universal Credit for those unable to work. The government believes that raising the standard allowance for everyone while reducing the health top-up will make returning to work more financially worthwhile and possible. However, charities disagree. Anela Anwar, chief executive of anti-poverty charity Z2K, said: "We all know that our broken disability benefits system needs reform. "But these reckless plans, which official estimates show will plunge more than one million disabled people into poverty or even deeper into poverty, do not represent meaningful reform. "Government suggestions that these cuts are about helping people into work are entirely disingenuous. "Experts agree that only between 1% and 3% of those who will be hit by the cuts are expected to find work as a result." What is the Universal Credit standard allowance? UNIVERSAL Credit is a welfare scheme which was designed to combine several of the old "legacy benefits The standard allowance is the basic monthly payment provided to individuals or families who qualify. The amount you receive depends on your age and whether you're single or in a couple: Single, under 25: £316.98 Single, 25 or over: £400.14 Couple, both under 25: £497.55 Couple, one or both 25 or over: £628.09 You may also be eligible for additional amounts if you have children, have a disability or health condition, or need help with housing costs. What's happening to Universal Credit health payments? The Universal Credit and Personal Independence Payment Bill also explains how the government proposes to slash incapacity benefits. For people already on Universal Credit, the current incapacity payment of £416.19 a month for those unable to work will be frozen until 2030. This means the payment will no longer increase with inflation each spring. However, for new claims starting from April 2026, this very same payment will be cut by half, to approximately £208 a month (or £50 a week). This reduced amount will also be frozen until 2030, meaning new claimants will receive significantly less extra support. The changes to Universal Credit payments need to be approved by Parliament and will be voted on soon. The government also plans to get rid of the Work Capability Assessment (WCA), which is used to decide if someone qualifies for Universal Credit health payments, at a later date. Instead, the DWP will use the PIP assessment to decide if someone is eligible for these health payments. The DWP aims to make this change by 2028. The plans to reform the benefits system were first unveiled by Secretary of State Liz Kendall in March, alongside the release of the DWP's Pathways to Work green paper.
The Independent
18-03-2025
- Business
- The Independent
Watch in full: Labour announces plans to cut benefits by billions
Watch Liz Kendall's House of Commons statement in full as Labour announced plans to slash billions of pounds from the UK's benefits bill on Tuesday, 18 March, amid backlash from charities and trade unions, who have described them as 'immoral' and 'indefensible'. The work and pensions secretary unveiled Sir Keir Starmer's government's dramatic cuts to benefits, prompting fears as many as one million people could see their benefits reduced. Anela Anwar, chief executive of anti-poverty charity Z2K accused the government of implementing "shocking and dangerous proposals". Labour backbenchers have met the plans with fierce criticism. Veteran left-winger Diane Abbott described the overhaul as 'not a Labour thing to do'. Chancellor of the Duchy of Lancaster Pat McFadden defended the plans, saying that the Cabinet is 'united' behind the move and that people on long-term sickness benefits should not 'languish there forever'. Among the reforms, Ms Kendall ruled out freezing or means testing personal independence payments (PIP), but announced they will significantly tighten access to the benefit. She announced the work capability assessment (WCA) will be scrapped in 2028, an increase in benefit claim reassessments and a new 'Right to try' scheme to allow people to find work. With an expected bill of £70bn per year by 2030 on disability and long term sickness benefits, Ms Kendall insisted she had no choice.
Yahoo
27-01-2025
- Business
- Yahoo
Labour gives update on sickness and disability benefit reforms as spending cuts expected soon
Labour has given a major update on planned reforms to the benefits system as chancellor Rachel Reeves says she 'will not hesitate to act' to cut back on welfare spending. Her comments come ahead of propsals which are set to outline how the government will overhaul sickness and disability benefits in the UK. The Department for Work and Pensions (DWP) has said more details on the plans are coming in Spring when a green paper on the plans is released – but the chancellor has revealed that more detail will come as soon as this week. Sharing her plans in the Sun on Sunday, Ms Reeves said she will 'expose how the Conservatives lost complete control of the benefits bill – with a project overspend of more than £8 billion and no action taken to address that.' 'That includes looking closely at the rising cost of health and disability benefits,' she adds. 'This is an urgent problem. It can't be ignored. We can't walk around it, as the Tories did. We've got to grip it, once and for all.' The chancellor will be making a speech on Wednesday in Oxfordshire, sharing her plans to boost economic growth, with changes to pensions and news on the possible Heathrow airport expansion rumoured. Her latest comments may indicate that the much-anticipated detail on benefit changes will also make the agenda. The planned changes are understood to focus largely on disability benefits with aims to bring down the number of people who are claiming them. There are now 3.7 million people of working age receiving health-related support – 1.2 million more than in February 2020. Labour argues that these numbers are untenable, with £56.4 billion forecast to be spent on these benefits for working-age adults in 2024/25 according to the Office for Budget Responsibility (OBR). Prime minister Sir Keir Starmer has said his government will be 'ruthless' in cutting this expenditure if needed to balance spending. Changes to the work capability assessment are understood to be central to these plans. This is the key way claimants are found fit or unfit for work, entitling them to benefits at different levels. The Treasury has committed to match a target made by the previous Conservative government to save £1.3bn through the assesssment reforms. Under those plans, an estimated 450,000 fewer people would have qualifed for health-related benefits, although Labour has said it will re-consult on the detail of the changes. Also rumoured are changes to the personal independence payment (PIP) and greater DWP powers to tackle benefit fraud. Disability charities and campaigners have pushed back against Labour's stance on health-related benefits, with a recent report from Pro Bono Economics and anti-poverty charity Z2K finding that the economic value of disability benefits for those in need far outweighs the public cost. Ayla Ozmen, Director of Policy and Campaigns at Z2K, said: "Removing or reducing hundreds of pounds of vital financial support for disabled people would have a devastating effect. Already over 88 per cent of low-income households on disability benefits can't afford the basics, including food, energy costs, prescriptions and transport to medical appointments. Further cuts will inevitably push people deeper into poverty and leave people in worse health. "What we need is investment in our social security system, not further cuts to an already threadbare system." The chancellor's recent comments come after a new review was launched by the DWP to explore how ill and disabled people can be helped to find employment. Led by former John Lewis boss Sir Charlie Mayfield, its findings will be published a few months after Labour shares its plans for disability benefits in the Spring. Work and Pensions Secretary, Rt Hon Liz Kendall MP, said: 'Millions of people have been left without support to get into work and on at work, and completely held back from reaching their potential for far too long, and the record-high cost of long-term sickness benefits is evidence of that fact. 'That's why I am pleased to have Sir Charlie leading this review, bringing a wealth of experience and helping us to get people into work, and most importantly keep them in work, so we can boost living standards and get our economy growing.'
Yahoo
27-01-2025
- Business
- Yahoo
Labour gives update on sickness and disability benefit reforms as spending cuts expected soon
Labour has given a major update on planned reforms to the benefits system as chancellor Rachel Reeves says she 'will not hesitate to act' to cut back on welfare spending. Her comments come ahead of propsals which are set to outline how the government will overhaul sickness and disability benefits in the UK. The Department for Work and Pensions (DWP) has said more details on the plans are coming in Spring when a green paper on the plans is released – but the chancellor has revealed that more detail will come as soon as this week. Sharing her plans in the Sun on Sunday, Ms Reeves said she will 'expose how the Conservatives lost complete control of the benefits bill – with a project overspend of more than £8 billion and no action taken to address that.' 'That includes looking closely at the rising cost of health and disability benefits,' she adds. 'This is an urgent problem. It can't be ignored. We can't walk around it, as the Tories did. We've got to grip it, once and for all.' The chancellor will be making a speech on Wednesday in Oxfordshire, sharing her plans to boost economic growth, with changes to pensions and news on the possible Heathrow airport expansion rumoured. Her latest comments may indicate that the much-anticipated detail on benefit changes will also make the agenda. The planned changes are understood to focus largely on disability benefits with aims to bring down the number of people who are claiming them. There are now 3.7 million people of working age receiving health-related support – 1.2 million more than in February 2020. Labour argues that these numbers are untenable, with £56.4 billion forecast to be spent on these benefits for working-age adults in 2024/25 according to the Office for Budget Responsibility (OBR). Prime minister Sir Keir Starmer has said his government will be 'ruthless' in cutting this expenditure if needed to balance spending. Changes to the work capability assessment are understood to be central to these plans. This is the key way claimants are found fit or unfit for work, entitling them to benefits at different levels. The Treasury has committed to match a target made by the previous Conservative government to save £1.3bn through the assesssment reforms. Under those plans, an estimated 450,000 fewer people would have qualifed for health-related benefits, although Labour has said it will re-consult on the detail of the changes. Also rumoured are changes to the personal independence payment (PIP) and greater DWP powers to tackle benefit fraud. Disability charities and campaigners have pushed back against Labour's stance on health-related benefits, with a recent report from Pro Bono Economics and anti-poverty charity Z2K finding that the economic value of disability benefits for those in need far outweighs the public cost. Ayla Ozmen, Director of Policy and Campaigns at Z2K, said: "Removing or reducing hundreds of pounds of vital financial support for disabled people would have a devastating effect. Already over 88 per cent of low-income households on disability benefits can't afford the basics, including food, energy costs, prescriptions and transport to medical appointments. Further cuts will inevitably push people deeper into poverty and leave people in worse health. "What we need is investment in our social security system, not further cuts to an already threadbare system." The chancellor's recent comments come after a new review was launched by the DWP to explore how ill and disabled people can be helped to find employment. Led by former John Lewis boss Sir Charlie Mayfield, its findings will be published a few months after Labour shares its plans for disability benefits in the Spring. Work and Pensions Secretary, Rt Hon Liz Kendall MP, said: 'Millions of people have been left without support to get into work and on at work, and completely held back from reaching their potential for far too long, and the record-high cost of long-term sickness benefits is evidence of that fact. 'That's why I am pleased to have Sir Charlie leading this review, bringing a wealth of experience and helping us to get people into work, and most importantly keep them in work, so we can boost living standards and get our economy growing.'
The Independent
27-01-2025
- Business
- The Independent
Labour gives update on sickness and disability benefit reforms as spending cuts expected soon
Labour has given a major update on planned reforms to the benefits system as chancellor Rachel Reeves says she 'will not hesitate to act' to cut back on welfare spending. Her comments come ahead of propsals which are set to outline how the government will overhaul sickness and disability benefits in the UK. The Department for Work and Pensions (DWP) has said more details on the plans are coming in Spring when a green paper on the plans is released – but the chancellor has revealed that more detail will come as soon as this week. Sharing her plans in the Sun on Sunday, Ms Reeves said she will 'expose how the Conservatives lost complete control of the benefits bill – with a project overspend of more than £8 billion and no action taken to address that.' 'That includes looking closely at the rising cost of health and disability benefits,' she adds. 'This is an urgent problem. It can't be ignored. We can't walk around it, as the Tories did. We've got to grip it, once and for all.' The chancellor will be making a speech on Wednesday in Oxfordshire, sharing her plans to boost economic growth, with changes to pensions and news on the possible Heathrow airport expansion rumoured. Her latest comments may indicate that the much-anticipated detail on benefit changes will also make the agenda. The planned changes are understood to focus largely on disability benefits with aims to bring down the number of people who are claiming them. There are now 3.7 million people of working age receiving health-related support – 1.2 million more than in February 2020. Labour argues that these numbers are untenable, with £56.4 billion forecast to be spent on these benefits for working-age adults in 2024/25 according to the Office for Budget Responsibility (OBR). Prime minister Sir Keir Starmer has said his government will be 'ruthless' in cutting this expenditure if needed to balance spending. Changes to the work capability assessment are understood to be central to these plans. This is the key way claimants are found fit or unfit for work, entitling them to benefits at different levels. The Treasury has committed to match a target made by the previous Conservative government to save £1.3bn through the assesssment reforms. Under those plans, an estimated 450,000 fewer people would have qualifed for health-related benefits, although Labour has said it will re-consult on the detail of the changes. Also rumoured are changes to the personal independence payment (PIP) and greater DWP powers to tackle benefit fraud. Disability charities and campaigners have pushed back against Labour's stance on health-related benefits, with a recent report from Pro Bono Economics and anti-poverty charity Z2K finding that the economic value of disability benefits for those in need far outweighs the public cost. Ayla Ozmen, Director of Policy and Campaigns at Z2K, said: "Removing or reducing hundreds of pounds of vital financial support for disabled people would have a devastating effect. Already over 88 per cent of low-income households on disability benefits can't afford the basics, including food, energy costs, prescriptions and transport to medical appointments. Further cuts will inevitably push people deeper into poverty and leave people in worse health. "What we need is investment in our social security system, not further cuts to an already threadbare system." The chancellor's recent comments come after a new review was launched by the DWP to explore how ill and disabled people can be helped to find employment. Led by former John Lewis boss Sir Charlie Mayfield, its findings will be published a few months after Labour shares its plans for disability benefits in the Spring. Work and Pensions Secretary, Rt Hon Liz Kendall MP, said: 'Millions of people have been left without support to get into work and on at work, and completely held back from reaching their potential for far too long, and the record-high cost of long-term sickness benefits is evidence of that fact. 'That's why I am pleased to have Sir Charlie leading this review, bringing a wealth of experience and helping us to get people into work, and most importantly keep them in work, so we can boost living standards and get our economy growing.'
