Tory plot to maneuver Universal Credit goalposts might value households £500 a 12 months
A Tory plot to maneuver the goalposts on how advantages are calculated might hit the incomes of 9 million households by as a lot as £500 a 12 months.
Chancellor Jeremy Hunt is rumoured to be contemplating slashing the welfare invoice by round £1.3 billion by not growing advantages within the standard method.
Currently working-age advantages – like Universal Credit and baby profit – go up each April by the extent of inflation the earlier September. That means the poorest households at all times have the worth of their earnings protected towards inflation.
This 12 months, Mr Hunt is claimed to be planning to calculate the rise based mostly on October’s inflation determine – which fell to 4.6% from 6.7% in September, the most important month-to-month fall in over 30 years. Analysis by the Resolution Foundation exhibits that the common annual earnings loss for households affected by this profit reduce is £142, however many low-income working households on Universal Credit would face far larger losses.
Figures recommend a working household with three youngsters might lose as a lot as £500 a 12 months if it have been calculated this fashion. Louise Murphy, Economist on the Resolution Foundation, stated: “Benefits are usually increased in line with prices every year in order to ensure that families who receive support do not see their living standards fall.
“But the big fall in inflation between September and October this year has led some to suggest the government should move the goalposts on benefits uprating, and save around £1.3 billion. This benefit cut would mean an income loss for nine million families, with some losing up to £500 next year.” She added: “The context for this important decision facing the Chancellor is a cost of living crisis that is really a cost of essentials crisis, as energy and food bills have soared. Tough times for everyone are already toughest for low and middle income Britain.
A DWP spokesman said: “We increased benefits by over 10% this year in order to protect the most vulnerable from the impact of high inflation. As is the usual process, the Secretary of State will conduct his statutory annual review of benefits and State Pensions using the most recent data available.”