New regulations are now in effect which could see more than 120,000 working people on Universal Credit across Great Britain receive a job support boost from the Department for Work and Pensions (DWP). From the end of February, an increase to the Administrative Earnings Threshold (AET) will mean more Universal Credit claimants will be moved from the ‘Light Touch’ group to the ‘Intensive Work Search’ group.
The earnings threshold determines which group a Universal Credit claimant is placed in, this in turn impacts the level of support they receive to find work and develop a career, and the types of activities they must undertake, such as searching for opportunities to take up more or better paid work or researching new career options. DWP said the change will help more people get better-paid work and boost their long-term prospects.
Combined with a previous increase in September, this will mean around a quarter of a million more people will have been moved into ‘Intensive Work Search’.
DWP said New claimant commitments will be tailored to individual circumstances and will consider caring responsibilities and any health conditions.
Commenting on the threshold change, Secretary of State for Work and Pensions, Mel Stride MP said: “A hallmark of a compassionate society is giving those on low incomes the tools to progress and earn more. It is important that we continue to deliver targeted support so that those in work have access to the expertise and guidance of our dedicated work coaches.
“By raising the Administrative Earnings Threshold, we are forging a robust labour market building on positive changes we have already made and supporting even more people to progress in the workplace.”
DWP said claimants will benefit from more face-to-face time with a work coach, allowing them to access opportunities to increase their earnings, whether that is developing their skills, progressing in their current sector, or by starting a new role.
Who will be affected by the threshold change?
The new AET is the equivalent of:
- an individual working 15 hours per week (£617 in an assessment period)
- a couple working 24 hours per week between them, at the adult National Living Wage rate (£988 in an assessment period)
People impacted by the change will be contacted with more details through their Universal Credit journal at the end of their first full assessment period after February 26, 2023.
This year, the UK Government will also be driving forward an agenda to ensure the labour market remains robust, reviewing workforce participation to understand what action can be taken to drive down economic inactivity.
In 2021 the Universal Credit taper rate was reduced from 63 per cent to 55 per cent and the Work Allowance was increased by £500 per year so claimants can keep more of what they earn.
The National Living Wage is also increasing by 9.7 per cent, bringing it to £10.42 an hour from April.
This rise to the AET will build on this work to ensure work pays and will be complemented by a new In Work Progression offer which will be rolled out to all Jobcentres by the end of March, focused on helping claimants in the ‘Light Touch’ work group to progress.
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