1. Benefit freeze ending
April 1 finally brings an end to the benefit freeze.
MPs approved a rise of 1.7 per cent for most welfare pay-outs, in line with inflation.
It affected Universal Credit, Jobseeker’s Allowance (JSA), Income Support, Housing Benefit, Child Tax Credits, Working Tax Credits, Child Benefit and almost all aspects of Employment and Support Allowance (ESA).
All those will be getting ‘uprated’ with a pay rise from April 1.
The freeze did NOT apply to disability benefits which include Personal Independence Payment (PIP), Attendance Allowance, Disability Living Allowance (DLA), the disability elements of Tax Credits, and the support group component of Employment and Support Allowance (ESA).
Also not affected by the rates freeze were Maternity Allowance, Statutory Sick Pay, Statutory Maternity/Paternity Pay, Statutory Shared Parental Pay and Statutory Adoption Pay, along with benefits for carers.
2. Universal Credit additional increase
As well as Universal Credit being boosted by the end of the benefit freeze, it is getting another increase as part of Government measures to tackle the economic impact of coronavirus.
From April 6, the Government is increasing the standard allowance in Universal Credit by £1,000 a year, or about £80 a month, on top of the inflation uprating.
This means that for a single Universal Credit claimant (aged 25 or over), the standard monthly allowance will increase from £317.82 to £409.89 per month.
This applies to all new and existing Universal Credit claimants and will be in place for one year.
3. Working Tax Credit increase
Another benefit to get a coronavirus cash boost is working tax credit, which is paid every week or every four weeks.
At present, the basic amount is up to £1,960 a year. Additional elements paid on top include up to £810 for those working at least 30 hours a week, up to £2,010 a year for single parents and couples and up to £3.165 for disabled people.
The basic element will increase by £20 per week on top of the inflation uprating. This will apply to existing Working Tax Credit claimants and will be in place for one year.
Working tax credits depend on the hours of paid work you do, plus your income and circumstances.
Those aged 25 to 59 must work at least 30 hours a week to qualify, while those aged 60 or over, disabled or single with one or more children must work at least 16 hours a week. Couples with one or more children must normally work at least 24 hours a week between them.
4. Minimum income floor lifted
If you are self-employed and claiming Universal Credit, and are required to stay at home or are ill as a result of coronavirus, the Minimum Income Floor (an assumed level of income) will not be applied while you are affected.
From April 6, the Minimum Income Floor will be temporarily relaxed.
This change applies to all Universal Credit claimants and will last for the duration of the outbreak.
Under normal circumstances, the DWP assumes you are earning the same amount as someone in paid work. This will usually be what someone of your age would earn if they worked at the National Minimum Wage for the number of hours you are expected to work or look for work. That’s called the Minimum Income Floor.
If you earn less than the Minimum Income Floor, Universal Credit will not normally make up the difference and you would need to look for additional work to top up your income. But this has now been abolished indefinitely, to help people during the coronavirus outbreak.
5. State Pension increase
From April 6, the State Pension will rise by a much bigger 3.9 per cent because it is protected by the Tories’ ‘triple lock’ – which ensures it rises in line with inflation, average earnings or 2.5 per cent – whichever is highest.
In this case, the pension will be matching the 3.9 per cent average earnings increase seen by UK workers in July last year.
It will see an increase of £343 over the 2020-21 tax year, with the pension going up from £8,767.20 to £9,110.40 a year, the biggest pay rise for pensioners in almost a decade.
6. National Minimum Wage and National Living Wage increases
Almost 3 million workers are to benefit next month from a pay rise of up to 6.5 per cent.
The National Minimum Wage is the minimum pay per hour almost all workers are entitled to.
From April, the National Minimum Wage – for workers aged 24 and under – is rising as follows:
- Apprentices – a 6.4 per cent increase from £3.90 to £4.15
- Under 18s – a 4.6 per cent increase from £4.35 to £4.55
- 18-20 year olds – a 4.9 per cent increase from £6.15 to £6.45
- 21-24 year olds – a 6.5 per cent increase from £7.70 to £8.20
The National Living Wage is higher than the National Minimum Wage – workers get it if they’re over 25.
Workers on the National Living Wage will be entitled to £8.72 per hour (or £15,870 a year) from April 6, a rise from the current rate of £8.21 (equating to £14,942 a year).
It means that employees who work 35 hours per week would receive an increase of around £930 over a year.
7. Parental Bereavement Leave and Pay launched
Parents who suffer the loss of a child will be entitled to two weeks’ statutory leave under new regulations coming into force on April 6, 2020.
This is called Parental Bereavement Leave.
Parents employed in a job for six months or more will also be able to claim statutory pay for this period.