Thousands of Brits could see their benefits cut after the Department for Work and Pensions (DWP) implemented a new rule this week.
From Sunday (February 26), claimants must now meet a Universal Credit threshold, with the DWP putting pressure on claimants to increase their wages. Around 40 per cent of Universal Credit claimants have a job and are entitled to receive the benefit to top up their income.
But the amount they have to earn has gradually been going up. Those who fail to meet the latest work requirements could be sanctioned and have their benefits cut, reports NorthWalesOnline.
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The new Universal Credit regulations came into effect on January 30 and increased the Administrative Earnings Threshold to £617 for individual claimants and £988 for couples. This is the minimum they must earn. Those whose pay is below these levels are placed in an 'intensive work search' group where they have to attend weekly or fortnightly meetings with a jobcentre work coach to get their working hours increased or move to a better-paid role.
It's the second recent change to the earnings threshold after it was put up in September 2022. DWP bosses said 114,000 people were affected by the September change and another 120,000 will be affected by the January 2023 change that pushes their minimum pay to an even higher level.
According to Birmingham Mail, the DWP confirmed the change will start impacting claimants from February 26, 2023, as their assessment periods end before their next monthly amount of Universal Credit is calculated. It said: "More than 120,000 working people on Universal Credit across Great Britain will receive a job support boost this spring.
"The Administrative Earnings Threshold (AET) determines which group a Universal Credit claimant is placed in based on how much they earn. 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.
"From the end of February, an increase to the threshold will mean more Universal Credit claimants will be moved from the 'Light Touch' group to the 'Intensive Work Search' group, helping them to 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.
"New claimant commitments will be tailored to individual circumstances and will consider caring responsibilities and any health conditions."
Secretary of State for Work and Pensions Mel Stride 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."
The new threshold is the equivalent of an individual working 15 hours per week, or a couple working 24 hours per week between them, at the adult National Living Wage rate. The Government has also pledged to "review workforce participation at pace to understand what action can be taken to drive down economic inactivity."
It pointed out that in 2021 the Universal Credit taper rate - the amount of state benefit that's deducted as wages go up - was reduced from 63p for every pound of wages to 55p 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.
People impacted by the change will be contacted with more details via their Universal Credit journal. Claimants will receive a message at the end of their first full assessment period after the 26th of February.
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