Universal Credit and other benefit claimants could lose money next year due to changes by Liz Truss.
Pressure is mounting on Liz Truss not to "betray" millions of pensioners and benefit claimants by inflicting a real-terms cut in April. Former Prime Minister Boris Johnson had promised benefits would rise in April 2023 by inflation - a figure that was today confirmed as 10.1%.
But now Truss is thought to be looking at whether to raise benefit payments by earnings instead - which is only 5.5%, reported The Mirror.
READ MORE: State Pension change means pensioners will miss out on free benefits
This would be a real-terms cut, leaving the worst-hit of Britain's 5.6million Universal Credit claimants about £1,000 a year worse off. So how much would you actually be worse off by if the cut goes ahead?
How much could Universal Credit be cut in April?
Raising benefits by earnings instead of inflation would take the standard allowance - the “base rate” of Universal Credit - from £525.72 to £554.63 a month for a couple over 25.
While it is a cash rise, calculations suggest that figure is £24.18 a month (£290 a year) less than it would be if it rose by inflation. The difference in the standard allowance between an earnings and inflation rise is lower for other types of claimants.
It would be £12.20 a month (£146 a year) for a single claimant under 25, £15.41 (£185 a year) for a single over-25, and £19.16 (£230 a year) for a couple both under 25.
But that's not all...
Because Universal Credit is not just the standard allowance. People also get payments for children and disabilities.
That means the average monthly payment is higher, standing at £1,065.02 for a couple with kids. As a result, the cut is bigger too.
The Resolution Foundation think tank has worked out how much different groups will lose out each year on average if benefits rise by earnings instead of inflation. These are just averages as each family is different.
- Family with one child only receiving Child Benefit - £52
- Family with two children only receiving Child Benefit - £86
- Single unemployed adult on UC - £185
- Single disabled adult on ESA - £324
- Single disabled adult on UC - £380
- Working single parent with one child on UC - £478
- Working couple renting with two children on UC - £752
- Working couple not renting with three children on UC - £978
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