Increased Benefit Rates

One of the big impacts of the inflation crisis happening right now, is that benefits have, finally, gone up significantly. 

After a decade or more of benefits freezes and paralytic growth, benefits went up this April by 10.1%. This makes a huge difference to people on low incomes. Whether it is enough or not in these times of straitened economic circumstances is a question for others, but it is undoubtedly a great improvement on what has been the norm since George Osborne first took over the treasury.

So, what does this mean for people on benefits? 

A single working age person on Income-related Employment and Support Allowance and in the Support group can now expect to take home £149.05 per week, as opposed to their £135.35 in 2022/23, with an extra £76.40 if they are entitled to the severe disability premium. The maximum rate of Personal Independence Payment is now £172.75, rather than the £156.90 last year.

Another consequence of this though is that many more people are entitled to benefits. By increasing the amount that you can get, more households qualify. 

Crucially, with income tax thresholds being frozen at the same time, people with other incomes keep less of their money and may have that topped up with benefits. This is not particularly joined up thinking by the government, meaning money saved on one hand is given back out with the other.

A couple where one is disabled is now entitled to £968.88 per month in Universal Credit. That’s £88.88 more than the previous year. If they are renting an average property in Birmingham, they are entitled to an extra £523.55 per month towards their rent. (It’s worth noting that this rental amount has not gone up for three years, despite soaring rental prices.) The partner can work and earn £48,500 a year and they will still be entitled to a small amount of Universal Credit a month. 

So, due to big increases in benefit rates and also in the amount of tax and national insurance you pay, you can now claim benefits in certain circumstances even if you have what appears to be a high income. It is well worth checking your entitlements or talking to a benefits adviser as there are billions of pounds of benefits unclaimed every year. This is only likely to go up even higher this year. 

Contact me on enquiries@paladinadvice.com or dan@paladinadvice.com for more information and advice on who can claim benefits and how.

Your needs above ours’.

Ian MacKendrick

Ian MacKendrick

Fellow & SOLLA Accredited Chartered Financial Planner, Expert Witness and Dementia Friend.

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