Jeremy Hunt has confirmed benefits will rise in line with inflation at 10.1%.
The Chancellor told the Commons he will increase working age and disability benefits, costing £11 billion. The change will impact over 10 million families across the UK.
Mr Hunt said the "average" family on Universal Credit would receive an extra £600. The Chancellor told the Commons: "Today I also commit to uprate such benefits by inflation with an increase of 10.1%, that is an expensive commitment costing £11 billion.
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"But it means 10 million working-age families will see a much-needed increase next year.
"On average, a family on universal credit will benefit next year by around £600. And to increase the number of households who can benefit from this decision I will also increase the benefit cap with inflation next year."
Mr Hunt added that Work and Pensions Secretary Mel Stride will review "issues holding back workforce participation", which will conclude early in the new year.
He said he also wanted to help people already working to raise their incomes and become financially independent, adding: "That is why we will ask over 600,000 more people on Universal Credit to meet with a work coach so that they can get the support they need to increase their hours or earnings."
Mr Hunt said he would also move back the managed transition of people from employment and support allowance on to Universal Credit to 2028, adding he will invest an extra £280 million in DWP to "crackdown" on benefit fraud and error over the next two years.
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