Millions of households in receipt of Universal Credit will benefit from changes to the system announced by Chancellor Rachel Reeves this week.
Earlier this year, the government announced new proposals – which became law earlier this month under the Universal Credit Act – that it was changing how it would decide any increase in the universal credit standard allowance.
The new rules mean that - for the next four years at least - Universal Credit payments should increase by the rate of inflation as before, but with an additional top-up cash payment.
The DWP has now confirmed payments will increase by more than 6% for claimants next April, reflecting September's 3.8% inflation rate, plus the standard allowance increase of 2.3%.
- For a single person aged 25 or over, the weekly standard allowance will rise from £92 to £98, a £6 increase per week, or £312 a year.
- For a couple where one or both are aged 25 or over, the weekly allowance will rise from £145 to £154, a £9 increase, or around £416 a year.
It's worth noting that that this increase is only for the standard allowance — the basic universal credit payment rate — and the health element of the payment affected by cuts.
From next April, any claimants of the health element from this date will have that rate frozen and halved until 2029-30.
Addressing the House of Commons, Ms Reeves said Labour “do not believe that the solution to a broken welfare system is to punish the most vulnerable”, adding that the party “is achieving the biggest reduction in child poverty over a parliament since records began”.
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Chancellor Rachel Reeves insisted she will not “preside over a status quo that punishes children for the circumstances of their birth” as she confirmed the scrapping of the controversial two-child benefits limit.
Ditching the policy will result in an estimated reduction of child poverty by 450,000 and cost around £3 billion at the end of this Parliament.
Labour had been under increasing pressure from anti-poverty campaigners, as well as many MPs within its own party, to end a policy introduced under the Conservatives.
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