The Chancellor is this week expected to announce changes to
Britain’s welfare system that will help boost people’s earnings,
get them into work and support economic growth.
Changes to Universal Credit expected to be announced later this
week will require benefit claimants working up to 15 hours a week
at National Living Wage to meet regularly with their Work Coach
and take active steps to increase their earnings or face having
their benefits reduced. This gradual expansion is an increase
from the 12-hour threshold and will bring an additional 120,000
benefit claimants into the Intensive Work Search Regime.
With more than 1.2 million job vacancies across the UK, Work
Coaches will set clear expectations with claimants and make sure
they stick to their commitments. These commitments could include
applying for jobs, attending interviews or increasing their
hours. People who don’t fulfil their job-search commitments
without good reason could have their benefits reduced in line
with existing benefit sanctions policy.
Eligible claimants over 50 years old, including new claimants and
the long-term unemployed, will also get extra support from Work
Coaches. The newly unemployed will get 9 months of targeted
sessions, and people who are long-term unemployed will receive a
booster session followed by 3 months of intensive employment
support.
Rising economic inactivity in the over 50s is contributing to
shortages in the jobs market, driving up inflation and limiting
growth. Returning to pre-pandemic activity rates in the over 50s
could boost the level of GDP by up to 1 percentage point.
Chancellor said:
“Our jobs market is remarkably resilient,
but it is not perfect. While unemployment is at is at its lowest
rate for nearly fifty years, the high number of vacancies that
still exist and inactivity in the labour market is limiting
economic growth.
“We must get Britain working again. These gradual changes focus
on getting people back into work and maximising the hours people
take on to help grow the economy and raise living standards for
all.
“It’s a win-win. It boosts incomes for families and helps
businesses get the domestic workers they need, all while
supporting economic growth.
Secretary of State for Work and Pensions said:
“As we continue to face economic challenges and labour market
shortages, we are committed to helping people on lower incomes to
boost their pay – because we know work is one of the best ways to
support your family and help grow our economy.
“Whether it’s increasing their hours in their current role,
entering a new sector or switching careers, we want people of all
ages and all stages to be able to progress into fulfilling
careers.
“The expertise our dedicated DWP Work Coaches bring, will help to
drive this change by removing barriers to progression and opening
up opportunities for training and building skills, to increase
earnings.”
These changes will be Great Britain-wide and, in line with usual
practice, the UK Government will work with the Northern Ireland
Civil Service to determine the most suitable way to deliver
support in Northern Ireland in due course.
Certain groups will remain exempt from sanctions, including
people who are unable to work due to long-term sickness or a
disability.
Notes to Editors
- These changes are expected to be implemented from January
2023. Full details will be set out in due course.
- This new increase in the Administrative Earnings Threshold
builds on the rise from 9 to 12 hours at national Living Wage
(i.e. from £355 to £494 per month) for an individual claimant,
which takes effect this month, bringing 114,000 more people into
the Intensive Work Search Regime.
- Raising the threshold to 15 hours at National Living Wage
equates to £618 per calendar month for an individual claimant.
- Long-term unemployed is defined as someone who has been out
of work for 12 months or more.
- Inactivity due to long-term sickness has been rising since
2018.
