Around 120,000 people are expected to be impacted by new rules are coming into effect from Monday. The changes will see thousands more people pressure into finding work or increasing the number of hours they work.
It means Universal Credit claimants could see their benefits cut as the minimum wage level for people on Universal Credit - known as the Administrative Earnings Threshold - will be raised to the equivalent of 15 hours' pay on the National Living Wage, making it £617 for single people and £988 for couples.
In a statement, the Department for Work and Pensions (DWP) said: “The Department has been preparing to raise the Administrative Earning Threshold (AET) for several months as bringing more claimants into scope for intensive support will help more low-earning households to increase their incomes at a time of cost of living pressures.”
Those whose job pays less than that will move into an 'intensive work search' group where they need to increase their wages to at least those levels by upping their hours or moving to a higher-paid role.
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DWP says the change is designed to help those on low incomes boost their earnings with relevant support.
This is the second time the threshold has been raised. In September 2022, it was put up to the equivalent of 12 hours on the National Living Wage, at £494 per calendar month for single claimants and £782 per calendar month for couples. That rise affected 114,000 people, Chronicle Live reports.
This next increase to the threshold, starting from Monday, January 30, will affect 120,000 more people, who will now find themselves forced to boost their wages, reports Birmingham Live. People have to stay in the intensive work search group until their earnings reach the new minimum.
This means weekly or fortnightly one-to-one meetings with a dedicated work coach at the job centre will carry on for longer until they are taking home more money. Once their pay goes up to the right level, they are moved to what's called a 'light touch' group where there is less urgent pressure to earn more. Those who fail to meet the new work requirements could be sanctioned, which means their benefits could be cut by up to 100% as a punishment.
How much will people have to earn?
Around 41% of people claiming Universal Credit have a job and get the benefit as a top-up on their wages. The more they earn, the more their benefit amounts are reduced, going down by 55p for every £1 they get from paid work.
At the moment, people claiming Universal Credit who are currently in employment must be on a wage of at least £494 per calendar month if they are single and £782 per calendar month if part of a couple. From January 30, these minimum amounts will go up to:
- £617 for single people
- £988 for those in a couple
Those amounts are equivalent to 15 hours on the minimum wage. And from September this year, there will be further changes affecting those who earn that much or more.
The Government confirmed the next stage of the crackdown means that from September 2023, claimants who earn the equivalent of 15 to 35 hours on the minimum wage will be required to increase their earnings. This change will impact another 600,000 claimants.
What the Government says
Government guidance on the shake-up is: "The changes will bring tens of thousands of claimants of all ages across Great Britain into closer contact with a dedicated work coach focused on guiding them to increase their hours, progress in their chosen field, or pursue other opportunities – all aimed at helping jobseekers to earn more money.
"For people that are fit to work, the DWP places Universal Credit claimants on low incomes into groups known as Light Touch and Intensive Work Search. The Administrative Earnings Threshold or AET determines which group a person is placed in based on how much they earn, and therefore how much support they receive to find work and develop a career.
"The increased support will ensure claimants who are already in work but earn low pay will continue to receive support from a Work Coach until they are earning a secure income and forging a sustainable career, helping grow the economy. Existing claimants affected by these changes will receive a message in their journal and can talk to their Work Coach to understand what it means for them and help available."
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