Millions of households on Universal Credit are set to see their payments rise over the coming years as the Government pushes ahead with major welfare reforms.
Legislation laid in Parliament today forms part of a wider reset of the system, with ministers arguing the structure they inherited paid people more to remain on health related benefits than to look for work.
Alongside changes to health payments for future claimants, the standard Universal Credit allowance will increase above inflation.
For a single person aged 25 or over, that is worth around £295 more in cash terms this year and could reach up to £760 by the end of the decade.
The Government says the aim is simple: make sure those who are in work or actively trying to find a job keep more money in their pocket.
Work and Pensions Secretary Pat McFadden said: “The benefits system we inherited was rigged with the wrong incentives and wrote people off instead of backing them. We are changing this.
“These reforms put more money in the pockets of working people on Universal Credit, while ensuring those who can work get the support they need to do so.
“By boosting the standard allowance and investing in proper employment support, we’re building a welfare system that rewards work and offers people a route to a better future.”
The uplift comes as ministers also move to narrow the difference between what someone receives if they are job hunting and what new applicants will get on the health element of Universal Credit.
From April, new claimants judged to have limited capability for work and work related activity will receive £217.26 a month
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PAFrom April, new claimants judged to have limited capability for work and work related activity will receive £217.26 a month, compared with the current higher rate of £429.80.
However, the DWP confirmed that existing claimants, people with the most severe lifelong conditions and those nearing the end of life will continue to receive the higher payment.
At the same time, the Government says it will spend £3.5 billion on employment support by the end of the decade.
More than 1,000 Pathways to Work advisers are already in Jobcentres across England, Wales and Scotland
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GETTYMore than 1,000 Pathways to Work advisers are already in Jobcentres across England, Wales and Scotland offering voluntary help to people on health related benefits.
Officials expect 65,000 people to benefit from that support in this financial year.
One of them is Hayden, who lives with severe nerve damage in his legs following an accident and spends hours each morning building up strength to walk. With help from an adviser he has enrolled on a course to pursue his ambition of becoming a personal trainer.
Hayden said: “My Pathways to Work adviser saw my potential, not my limitations.
“They found me the right course, and made sure I had everything I needed to succeed. I’m now training to become a Personal Trainer – something I never thought possible.
“This support has genuinely transformed my future.”
DWP confirms benefits overhaul with £760 boost for millions
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GETTYWith 2.8 million people currently out of work because of long term sickness, ministers believe the combination of higher basic payments and targeted help will encourage more people to move towards employment.
By increasing the standard allowance while reducing the health element for new applicants, the reforms are projected to save taxpayers £950 million by 2030/31.
For those already in work or searching for it, the message from the DWP is that more support and more money is on the way.