What will the autumn budget mean for unemployment benefits recipients?

The telegraph reported that Labor plans to cut 3 billion pounds from the welfare bill over four years by tightening access to disability benefits.

The Conservatives launched plans to reform the Work Capability Assessment, which assesses how much universal credit a person can get if they have a health condition, so fewer are eligible for support.

It is estimated that this will reduce the number of people needing to be placed on “the highest level of incapacity benefit” by more than 420,000 people, which equates to a loss of almost £5,000 a year per person. person.

It is important to know that these plans will mostly affect new claimants, but campaigners have said it will apply to existing claimants when their circumstances change, such as if they move house.

Labor is reportedly set to honor these plans, which could save the government £3 billion in 2028/2029, although there has been no official announcement yet. Reeves could announce these plans in the autumn budget, but they may not get a mention.

Ayla Ozmen, director of policy and campaigns at the anti-poverty charity Z2Ksaid: “We are extremely nervous, as are our customers. We have been hearing ominous talk of ‘tough decisions on welfare’ for months. And recent mixed messages about whether the government will continue with the previous government’s dangerous plans to limit access to incapacity , has done nothing to assuage our concerns.

“If these plans go ahead, over 400,000 people will miss out on vital financial support and risk sanctions from next year. We really hope this does not happen and that the Government has recognized that such a move would be at odds with its own growth agenda, as well as its commitment to increasing opportunity.”

Richard Kramer, chief executive of national disability charity Sense, added: “We are deeply concerned by reports suggesting the Government could press ahead with plans to cut disability benefits by tightening the Work Capability Assessment in tomorrow’s Budget. We want these plans to be scrapped. It will not support people getting into work. It is geared towards saving money at the expense of disabled people.”

Sense is calling on the government to “instead ensure that this budget delivers more financial support to disabled people to help them not just survive but thrive”. This includes “making benefit rates fairer so they reflect the real costs disabled people face, committing more national funding to social care and setting out tailored ways to help disabled people pay for their higher energy bills”.

The Government is also yet to announce its plans for Personal Independence Payment (PIP) after the Conservatives proposed a series of changes which would have seen support cut. Labor ministers have said they will take their “own approach” to social security, but it is unclear what that will look like.

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Liz Kendall, the Work and Pensions Secretary, is due to publish her ‘Get Britain Working’ white paper later this autumn, which should contain more detail about reforms that will affect people on benefits.

James Taylor, director of strategy at disability equality charity Scope, said: “Plans to take billions out of the pockets of disabled people during a cost of living crisis will be devastating. Increasing restrictions on disabled people seeking work will only make their lives harder. They will not help to get more disabled people into work.

“The government must put forward positive arguments for change. Life costs a lot more when you’re disabled, and prices are still rising. Cutting support for those who need it most will lead to even more disabled people living in poverty.”

Shelley Hopkinson, head of policy and advocacy at Turn2us, added that “our social security system, like the NHS, is one of the foundations of our society” which has “the potential to support people and our economy to thrive”.

“But over a decade of austerity, punitive policies and stigmatizing narratives have dragged people deeper into poverty rather than lifting them out,” she said. “Instead of small tweaks and further cuts, we urge the government to listen to people’s experiences and take immediate action that can lift millions out of poverty.”

Local housing benefit, which determines how much housing benefit people get if they rent from a private landlord, could also be frozen if the government does not intervene.

Helen Barnard, director of policy at Trussell, said: “We need the chancellor to clarify the government’s plans for disability benefits and local housing support and give assurances that they will not go ahead with the previous government’s planned cuts to both of these vital lifelines next time. year.”

How much will benefits increase in April 2025?

The autumn budget typically sees the chancellor confirm how much benefits will increase for the next financial year.

Benefits are expected to rise by 1.7% from April 2025. This is because benefits generally increase with September inflation, which was 1.7% – the lowest rate seen in three and a half years.

It will mean an increase of “just a few pounds” every month for most claimants, charities warned, as they called on the Chancellor to raise Universal Credit so people can afford the essentials they need to survive.

New research by the Joseph Rowntree Foundation ahead of the Budget has found that working-age households receiving income-related support from the social security system are on average almost £700 worse off than they were in 2019.

They will be £1,000 worse off on average in 2029, partly due to housing costs rising faster than benefits. And inequality will increase.

The richest third of the population will see their disposable incomes return to pre-pandemic levels by the end of the decade, while the poorest third will see living standards decline in the next five years unless action is taken, according to the Joseph Rowntree Foundation.

Katie Schmeucker, chief policy adviser at the Joseph Rowntree Foundation, said: “Tackling hardship is essential, not optional, as the foundation of a strong economy. There are difficult policy choices, but the government needs to choose to stand with the families who have to make the heartbreaking choice to skip meals so the children can eat. They cannot wait for promises of possible economic growth before being offered relief.”

The charity is calling on the government to introduce a minimum floor in universal credit below which payments cannot fall, including limiting deductions from universal credit payments. It would also like cuts in disability benefits to be scrapped, the household support fund to be expanded and local housing benefit to be permanently linked to the local rent level.

Barnard added: “The Government has made a positive start with action on workers’ and tenants’ rights. Now the most urgent priority for their first Budget is to start tackling the inadequate levels of support within the social security system, which is the single biggest factor that drives people to the doors of food banks.”

Hopkinson also called on the Government to increase Universal Credit to cover essential costs. “In the long term, we need a commitment to de-stigmatizing Social Security, building trust in a system that is compassionate and there for all of us when we need it,” she said.

What is the government planning about universal credit debt relief in the autumn budget?

The government is believed to be planning changes to universal credit which will limit the current level of universal credit deductions, according to The Guardian.

This would reportedly cap the level of monthly deductions for individuals’ Universal Credit Standard to 15% instead of the current 25%, saving more than a million of Britain’s poorest households an estimated £420 each year.

The Department for Work and Pensions (DWP) is taking money back from around half of Universal Credit claimants to repay debts and fix mistakes, according to analysis from New Economic Fund.

The Big Issue has reported on the impact of Universal Credit Credit, which is said to be causing “poverty, evictions and mental and physical health problems”.

Limiting Universal Credit deductions would be a welcome step among those in the anti-poverty sector, but they would like the Government to go further and introduce a minimum income threshold below which Universal Credit cannot fall.

Barnard said: “We are looking for early action to introduce a protected minimum income floor to limit the amount of reductions that can be applied to a household’s Universal Credit.

“We know that deductions and caps in Universal Credit drag support even further below what is needed to afford the essentials and this would ensure, for the first time, that there would be a real safety net that no one could fall under .”

Could the two-child limit on benefits be scrapped in the autumn budget?

The Labor government is clear it wants to reduce child poverty, but it has not committed to lifting the two-child limit on benefits.

Its ministerial taskforce published its “Tackling Child Poverty” strategy last week, which made no mention of removing the two-child limit on benefits, despite research showing it could lift hundreds of thousands of children out of poverty and save the economy billions in the long term.

Pressure is building for the government to scrap the cap. More than 120 organisations, as part of the End Child Poverty Coalition, have signed a joint statement calling on Rachel Reeves to lift the two-child limit on benefits.

“We call on the government to scrap the two-child limit in its first budget,” the coalition said. “We know that lifting the two-child limit immediately is a necessary first step to start reducing the number of children in poverty across the UK today. Now is the time to act: children cannot wait.”

Could the cuts in winter fuel payments be reversed in the autumn budget?

Labor ministers have stuck to their decision to means-test the winter fuel payment, so it is limited to pensioners receiving pension credits and other means-tested benefits.

It means millions of pensioners will miss out on payments of up to £300 to help with their heating bills this winter.

Charities, campaigners and politicians have repeatedly called on the government to reverse the cuts to winter fuel payments, but the government has defended its decision.

“We have taken that decision to correct the public finances, so that everyone benefits in the long term, including the pensioners. And it’s a difficult trade-off, and there will be more to come, says Keir Starmer.

It appears unlikely that the government will reverse its decision, but the chancellor could introduce measures that would cushion the impact of the winter’s fuel payment cuts with increased support for pensioners in other ways.

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