Millions of people across Scotland, England and Wales claiming disability benefits from the Department for Work and Pensions (DWP) and Social Security Scotland are set for a 10.1 per cent pay rise this year which will be completely tax-free.
State Pension and most benefits will rise in April as part of the annual uprating. This means people in receipt of Personal Independence Payment (PIP), Adult Disability Payment (ADP), Disability Living Allowance (DLA) and Child Disability Payment could receive annual payments of between £1,398 and £8,983 over the 2023/24 financial year - completely tax-free.
This is important because the standard Personal Tax Allowance threshold has been frozen at £12,570 for the new financial year starting on April 6 and if the disability payments were subject to income tax rules, it would leave claimants with just £3,587 left of their allowance. For many workers claiming disability benefits (55%), this would have an impact on their take-home pay.
However, State Pension income is taxable but usually paid without any tax being deducted and you only pay Income Tax once your total annual income is above your Personal Allowance threshold (£12,570). The uprating in April is expected to push a further 500,000 older people on State Pension into the tax net, according to former pensions minister, Sir Steve Webb - find out more here.
But that’s not the case for people claiming any of the disability benefits.
At present, claimants can receive between £97.80 and £627.60 every payment period. This means that from April, there will be a monthly increase of up to £63.40 on the way for some of the country’s most vulnerable households, however, it’s important to be aware that those figures represent the minimum and maximum award rates possible.
A single award for the lower rate mobility only is currently worth £97.80 every four week pay period and the highest award for both the daily living or care and mobility components is worth £627.60.
People over State Pension age with a health condition or disability will also see their weekly payments increase to either £101.75 for the higher rate and £68.10 for the lower rate from April. There is no mobility component for Attendance Allowance, only daily care, so this means monthly payments will either be £272.40 or £407.
The payment rate changes have been published by DWP on GOV.UK here and will come into effect on April 10, 2023. Below are all the disability payment rate changes for 2023 to 2024.
Attendance Allowance
Weekly:
- Higher rate: £101.75 (from £92.40)
- Lower rate: £68.10 (from £61.85)
Pay period (every four weeks):
- Higher rate: £407
- Lower rate: ££272.40
Annual payments (from April 2023-2024):
- Higher rate: £5,291
- Lower rate: £3,541.20
DLA and Child Disability Payment
Care Component
Weekly:
- Highest: £101.75 (from £92.40)
- Middle: £68.10 (from £61.85)
- Lowest: £26.90 (from £24.45)
Pay period (four weeks):
- Highest: £407
- Middle: £272.40
- Lowest: £107.60
Mobility component
Weekly:
- Higher: £71.00 (from £64.50)
- Lower: £26.90 (from £24.45)
Pay period (every four weeks):
- Higher: £284
- Lower: £107.60
PIP and Adult Disability payment
Daily Living Component
Weekly:
- Enhanced: £101.75 (from £92.40)
- Standard: £68.10 (from £61.85)
Pay period (every four weeks):
- Enhanced: £407
- Lower: £272.40
Annual payments (from April 2023-2024):
- Enhanced: £5,291
- Lower: £3,541.20
Mobility Component
- Enhanced: £71.00 (from £64.50)
- Standard: £26.90 (from £24.45)
Pay period (every four weeks):
- Enhanced: £284
- Lower: £107.60
Annual payments (from April 2023-2024):
- Enhanced: £3,692
- Lower: £1,398.80
New £150 disability cost of living payment 2023
Over six million people across the UK on non-means-tested disability benefits will receive a further £150 disability cost of living payment this summer.
This includes everyone eligible for:
- Disability Living Allowance
- Personal Independence Payment
- Adult Disability Payment
- Child Disability Payment
- Attendance Allowance
- Armed Forces Independence Payment
- Constant Attendance Allowance
- War Pension Mobility Supplement
DWP will provide further details on timing of the payments and eligibility dates in due course. This payment will be tax-free and will not have any impact on existing benefit awards.
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