By Peter Smith, Financial Advocate and New Business Advocate for Dosh
April generally brings a review of benefit rates and this year is no exception. There is some welcome news for working age benefit recipients, and a one-off increase for Universal Credit recipients to reflect the current Coronavirus situation. Pension benefits continue to enjoy the ‘triple lock’, which means they increase by the most favourable amount calculated from three different elements. Let’s look at some of the changes, starting with working age benefits.
The then Chancellor George Osborne announced a freeze on the personal allowance element of benefits in 2016, but that has changed for 2020 and for the first time in five years the basic personal allowance element will increase by 1.7%. This change affects Jobseekers’ Allowance, Employment and Support Allowance (both personal allowances and the work-related activity component), Income Support, Child and Working Tax Credits, some elements of Housing Benefit and finally Universal Credit. You can see some examples of the increased figures on our benefits uprating poster.
For Universal Credit (UC) recipients only – so this does not apply if you are in receipt of any other benefit – there will be an additional amount of £20 per week, paid for the next twelve months until April 2021. As UC is actually paid monthly this means that the standard allowance for a person over 25 will increase from £317.82 per month to £409.89 per month. Other components of UC are also increased by 1.7%.
There is also welcome news for those who receive help with housing costs either via UC or through Housing Benefit. If you are subject to the limits provided by the Local Housing Allowance (LHA) – so if you rent from a private landlord, for instance – then the LHA will also increase by 1.7%.
This is also the first increase in this allowance for five years.
For pension age benefit recipients, then both State Pension and the minimum amount of Pension Credit increase by the triple lock figure, which for 2020/21 is based on the average earnings index, and brings an increase of 3.9%. Please see the uprating poster for some examples of what that means in pounds for Pension Credit. State Pension entitlements are all individually calculated, so people can have different amounts, but the full amount of the new State Pension goes up from £168.60 per week to £175.20.
Disability benefits like Personal Independence Payment and Disability Living Allowance have continued to be increased each year while the other benefits were frozen. This is also the case for 2020, and these benefits are also increased by 1.7%. Again, please see our uprating poster for some examples of the actual figures. This increase also applies to the disability premiums payable with some means tested benefits like ESA and Pension Credit, so they will rise too.
While most benefit increases lag behind the increases in earnings, it is good to see some relaxation of restrictions this year with the basic personal allowances and the LHA. Hopefully this will be of help to those who need it most.
If you are supported by Dosh, your Financial Advocate will include these increases on your next Money Plan.
If you manage your own benefit and want to check you are getting the benefits you are entitled to, you can use an online calculator: www.gov.uk/benefits-calculators or view all the relevant rates for each benefit at www.gov.uk/browse/benefits. For a more detailed review, Dosh can conduct a Money Check.
Meike Beckford April 28th, 2020
Posted In: News and Blogs
The amount that people get in benefits often goes up each year in April because of inflation. Inflation is a word for when prices go up so money is worth less. Inflation means that in 2017 you can buy less for your money than you could in 2016. For example, a 2% rate of inflation would mean that something costing £1 last year would cost £1.02 this year. If you want to learn more, you can watch an accessible video about why prices go up over time.
Inflation means that to be able to afford the same amount of things, the money you have coming in needs to go up by the same amount as other prices are going up each year.
The government chooses how much is paid for different benefits. They decided that working age benefits were going to be frozen (stay the same amount) for 4 years from April 2016. This means that pensioners will get more money each year, but people who are younger than retirement age will get the same amount from April 2016 to April 2020.
The government has decided that some benefits will still go up each year while most people’s benefits stay the same. Disability benefits are some of the benefits which have been protected. These benefits are:
Disability Living Allowance (DLA) and Personal Independence Payment (PIP) are paid to anyone who is disabled. It doesn’t matter if you are in work or how much savings you have, you just need to meet the criteria and score enough points at assessment.
DLA and PIP will both go up by the same amount this year:
|Old weekly amount||New weekly amount|
|Low Rate Care
|Middle Rate Care (DLA)
Standard Daily Living (PIP)
|High Rate Care (DLA)
Enhanced Daily Living (PIP)
|Low Rate Mobility (DLA)
Standard Mobility (PIP)
|High Rate Mobility (DLA)
Enhanced Mobility (PIP)
Employment and Support Allowance (ESA), Income Support (IS) and Jobseeker’s Allowance (JSA) are paid to people who are not working. ESA and IS are benefits that replace earnings for people who can’t work because they are ill or disabled. JSA is also a benefit replacing earnings for people who are not in work and some people claiming it are ill or disabled. These benefits will not change for most people. The main part of the benefit, called the Personal Allowance, has been frozen and will stay the same.
Some people who get these benefits and are ill or disabled get an extra payment on top of their personal allowance called a premium. To be entitled to a premium you need to be in the Support Group or be getting a certain level of DLA/PIP, along with other conditions. These are going up this year by this amount:
|Old weekly amount||New weekly amount|
|Enhanced Disability Premium
|Severe Disability Premium
|Support Group component
This means the most you can get in Employment and Support Allowance (ESA) has gone up from £186.90 to £188 per week.
Most benefits are not going down. There have been some rule changes for the benefits cap which means that some people will get less money overall. But this does not apply to people who get disability benefits (PIP/DLA) or Carers Allowance. You can learn more about the Benefits Cap and find out if it applies to you on the DWP website and other advice sites such as Turn2Us.
There are also changes for people in the Work Related Activity Group for ESA if they have made a new application after 3rd April 2017. If you are already getting ESA in the Work Related Activity Group this should not affect you. You can learn more about the different ESA groups and the changes on the Citizens Advice website.
These changes will not affect everyone. If you think you will be affected then you should get more advice from Citizens Advice Bureau, your local Welfare Rights organisations, or from your Dosh advocate.
If you have any more questions or are worried that you are not being paid the right amount, there are lots of websites which can help you. For example, Turn2Us, EntitledTo and Citizens Advice Bureau. You can find them and many more resources in the ‘Links’ page on our website.
If you support a family member with their money and benefits and would like to learn more, our ‘Factsheets for Family Carers’ cover topics such as ‘Benefits’ and ‘Where does the money come from?’ which could also help.
If you want to learn more about Dosh Appointeeship or Financial Advocacy, please get in touch to find out how we can support you.
Meike Beckford March 28th, 2017
Posted In: News and Blogs