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22 November 2017

Autumn Budget 2017 Universal Credit changes: what next for welfare?

What Philip Hammond’s Universal Credit changes mean, and more. 

By Julia Rampen

In his Autumn Budget 2017 speech, Chancellor Philip Hammond promised to “help families to cope with the cost of living”. Many families include recipients of welfare in one form or another, including low-paid working families who receive tax credits or housing benefit.

So what’s in it for them?

Here’s what you need to know about the changes made to Universal Credit, housing benefit and other forms of welfare in the Autumn Budget 2017.

Universal Credit

There are many problems with the new “streamlined” benefit called Universal Credit, which is currently being rolled out across the country. In particular, a six week waiting period before the first payment has led to huge hardship, and rent arrears.

Hammond announced the scrapping of an initial seven day waiting period, meaning that the wait for Universal Credit should be reduced to five weeks from February 2018.

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Claimants can also ask for up to a month’s worth of Universal Credit paid in advance. This amounts to an interest-free loan, which the claimant will have to pay back over the next 12 months.

From April 2018, claimants already receiving housing benefit can keep on doing so for two weeks after their Universal Credit claim, which should make it easier to cover the rent in the transition period.

Housing benefit

Hammond promised to increase targeted affordability funding, which will allow certain local authorities to increase housing benefit for tenants rising for private landlords.

This is designed to increase support where rents are least affordable – although it may also have the opposite effect, in that landlords realise they can charge more. 

Pensions

When Hammond became Chancellor there were rumours he might scrap the “triple lock” – the guarantee that the state pension will rise by 2.5 per cent, the rate of inflation, or average earnings, whichever is highest.

This has not happened. In April 2018, the state pension will rise by 3 per cent. There is however, a tinkering with pension and savings credit, an income-related benefit for pensioners. After the adjustment, there will be less reward for savings and more for those on the lowest incomes.

Working-age benefits

Unlike pensions, working-age benefits remain frozen. With prices rising, this means that working-age people will be able to purchase less and less with their payments. 

Hammond had nothing specific to say about other important benefits, including personal independence payments, jobseekers’ allowance, or employment and support allowance. In other words, the harsh policies introduced by his predecessor, George Osborne, continue, as Anoosh Chakelian documented back in March, here.

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