1_Autumn-spending-package.jpg

Benefits and Cost of Living

My response to concerns about uprating of benefits and support for families and the vulnerable

 

November 2022

Thank you for contacting me about children and the cost of living.

 

I understand families’ anxieties around rising costs, and I welcome the Government’s actions to help families.

 

The Government is taking decisive and unprecedented action to support households as the cost of living increases.

 

An estimated 19 million families and 40 million individuals in Great Britain are expected to see an increase in their income next year due to the up-rating decisions taken by the Government. Social security is a transferred matter in Northern Ireland.

 

Benefits and pensions will increase by 10.1% from next April. The new State Pension will increase from £185.15 to £203.85 a week and the basic State Pension from £141.85 to £156.20.

 

Other increases will see:

  • Universal Credit:

    • The Standard Allowance for a couple where one is 25 or over increasing from £525.72 to £578.82 a month

    • Work allowances increasing from £344 and £573 to £379 and £631 respectively a month

  • Statutory sick pay increasing from £99.35 to £109.40 a week

  • Carer’s Allowance increasing from £69.70 to £76.75 a week

  • Personal allowance in legacy benefits for a couple both 18 or over increasing from £121.05 to £133.30 a week

  • Attendance Allowance higher rate increasing from £92.40 to £101.75 a week

 

In order to increase the number of households who can benefit from these uprating decisions the benefit cap will also be increased by 10.1% in April 2023. This means that all currently capped households will see an increase, with around 30,000 households being taken out of the cap entirely. In addition, around 60,000 households are prevented from becoming capped.

 

Under the Energy Price Guarantee (EPG), the typical household will pay no more than £2,500 on their energy bill until April 2023. Thereafter, the price cap will rise so that the typical household will pay no more than £3,000 until April 2024. The EPG will save the average household a further £500 and mean they will not have to face energy bills of £6,000 this winter.

 

In addition to the EPG, I strongly welcome the Chancellor’s announcement during the Autumn Statement 2022 that the Government will increase its cost-of-living support package by an additional £12 billion, taking the total from £37 to £49 billion.

 

This increase means that, in addition to the cost-of-living payments already being made this year, the Government will provide extra one-off payments of £900 for the eight million households on means-tested benefits, a second £300 Pensioner Cost-of-Living Payment, and another £150 for disability benefit recipients. The Chancellor also announced that the Government will provide £1 billion of extra funding by extending the Household Support Fund for another year, bringing the total of the Fund to £2.5 billion.

 

I am not aware of plans to uprate Universal Credit in the way that some have suggested, but I welcome the Chancellor's announcement that the Government will continue to protect the most vulnerable by increasing benefits by 10.1 per cent for 2023/24, in line with inflation.

 

Ten million households in receipt of working-age and disability benefits will see an increase in their benefit payments. The average uplift for households receiving Universal Credit will be around £600.

 

The Government has made permanent changes to Universal Credit to make it more generous. The 2021 Autumn Budget reduced the UC taper rate from 63 per cent to 55 per cent. Combined with increasing work allowances in UC by £500 a year, this is worth £1,000 a year to a full-time worker.

 

It is clear that the Government have needed to make tough decisions, countries across the world are facing equally distressing situations exacerbated by the conflict in Ukraine. We can share in confidence that, when it comes to protecting the most vulnerable, the Government have shown a commitment to supporting people whatever age they may be and in whatever part of the country they may live.

 

Thank you again for taking the time to contact me.