A hack and slash of £5billion of welfare payments will see various benefits targeted for cuts, as the government announced this week – but there is one benefit set to be increased significantly.
As part of its ‘biggest shake up to the welfare system in a generation’, the government announced a litany of cuts worth £5billion to benefits like PIP and Disability Allowance to try to get a host of people not in employment to go back into work. But among the cuts, the plan announced it will raise Universal Credit by £775 a year by 2029.
The change is aimed at stopping people from claiming the health element rate of Universal Credit by claiming they are unfit to work, which currently pays twice what the standard allowance does. The change would add £64.58 per month to the standard rate for over 25s.
The plans, released via gov.uk, outlined: “Rebalancing payment levels in Universal Credit to improve the Standard Allowance. Raising it above inflation by 2029/30, adding £775 annually in cash terms. By improving the Standard Allowance to provide more adequate support.
“The government plans to raise the Standard Allowance above inflation by 2029/30, adding £775 in cash terms annually.
“This aims to avoid people having to choose between employment or adequate financial support.
“This change addresses the current issue where the health element rate is double that of the standard allowance, creating an incentive for people to prove they are unfit to work to claim the health element and access greater financial support.
“The UC standard allowance increase of £775 per year is for a single person aged 25 or over. Equivalent percentage increases will be applied to the standard allowances of couples and those aged under 25.”
Work and Pensions Secretary Liz Kendall said: “Our social security system must be there for all of us when we need it, now and into the future. That means helping people who can work to do so, protecting those most in need, and delivering respect and dignity for all.
“Millions of people have been locked out of work, and we can do better for them. Disabled people and those with health conditions who can work deserve the same choices and chances as everyone else.
“That’s why we’re introducing the most far-reaching reforms in a generation, with £1 billion a year being invested in tailored support that can be adapted to meet their changing circumstances – including their changing health – while also scrapping the failed Work Capability Assessment.
“This will mean fairness for disabled people and those with long-term health conditions, but also for the taxpayers who fund it as these measures bring down the benefits bill.
“At the same time, we will ensure that our welfare system protects people. There will always be some people who cannot work because of their disability or health condition. Protecting people in need is a principle we will never compromise on.”
Sir Keir Starmer has been directly challenged by Labour veteran Diane Abbott over the Government’s cuts to welfare, with the Mother of the House telling him there was “nothing moral” about the plan.
At Prime Minister’s Questions, Sir Keir insisted that the current system was “morally and economically indefensible”.
But Ms Abbott, the longest-serving female MP, said: “There is nothing moral about cutting benefits for what may be up to a million people.
“This is not about morality, this is about the Treasury’s wish to balance the country’s books on the back of the most vulnerable and poor people in this society.”
Sir Keir told her it was a “moral issue” that one in eight young people were not in employment, education or training.
He said: “I’m not going to turn away from that, I am genuinely shocked that a million people, young people, are in that position, and I’m not prepared to shrug my shoulders and walk past it.”
