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Universal credit work allowances are to increase by £1,000 per year from April 2019, the Chancellor Philip Hammond has announced.
Introducing welfare changes in today's Budget 2018, Mr Hammond said -
'The government is introducing universal credit slowly and carefully, and has made changes where necessary. Ahead of the further expansion of universal credit, the Budget announces other changes to ensure the system works for everyone.'
Key changes announced include -
the amount that households with children and people with disabilities can earn before their universal credit award begins to be withdrawn – the Work Allowance – will be increased by £1,000 from April 2019 (paragraph 5.32);
an additional two week payment of income support and the income-related elements of jobseeker’s allowance and employment and support allowance at the start of a universal credit claim effective from July 2020 (paragraph 5.34);
applying the 12 month grace period before the Minimum Income Floor to all gainfully self-employed people transitioning to universal credit, from July 2019 for those moved to universal credit under managed migration, and from September 2020 for those moving to universal credit as a result of a change in circumstances (paragraph 5.35);
reducing the maximum rate for debt deductions from a universal credit award from 40 per cent to 30 per cent (paragraph 5.36);
extending the period over which advance payments are recovered from 12 to 16 months with effect from October 2021 (paragraph 5.36);
providing for the 'relevant threshold' for calculating surplus earnings to remain at the universal credit nil threshold plus £2,500 until April 2020 (paragraph 5.38); and
delaying the transfer of rent support from housing benefit to pension credit by three years to October 2023, to ensure that the transfer aligns with the full implementation of universal credit (paragraph 5.39).
NB - while the main Budget document says that -
'In response to feedback on universal credit, the implementation schedule has been updated: it will begin in July 2019, as planned, but will end in December 2023.'
- in the accompanying Budget 2018 policy costings it says that -
'Policy changes to universal credit have necessitated an update to the schedule for Managed Migration, which is the process by which the Department for Work and Pensions will move people to universal credit from the existing benefit system. The process will start in January 2020 and will end in June 2024 rather than September 2022, including a 6-month contingency assumed by the Office for Budget Responsibility.'
The government also confirmed in the policy costings that funding is made available for previously announced measures including -
enhancements to transitional protection for people moving onto universal credit and preventing natural migration for those in receipt of the severe disability premium (the latter effective from January 2019);
extending existing support for non-parental carers and adopters in tax credits and universal credit (effective from November 2018);
retaining funding for supported housing within the welfare system; and
reinstate automatic entitlement for housing support under universal credit for 18 to 21 year olds (effective from December 2018).
For more information see Budget 2018 from gov.uk
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