Universal Credit changes: Tens of thousands to be impacted by new rules

A change to the Administrative Earnings Threshold has come into force this week.

File photo dated 06/10/2021 of a Universal Credit sign on a door of a job centre plus in east London. Universal Credit deductions will leave some Scots struggling despite a promised benefits uplift, a leading charity has warned. Issue date: Sunday January 8, 2023.
A major change has been introduced to Universal Credit this week. (Alamy)

Tens of thousands of people will be impacted by changes to Universal Credit which came into force this week.

As the UK continues to grapple with a cost of living crisis, on Monday, a major change to the payment was introduced which affects more than 120,000 working people who receive the benefit.

Universal Credit is a monthly payment to help with living costs. People may receive it if they are on a low income, out of work or cannot work.

On Monday, the government changed the Administrative Earnings Threshold (AET), a move that will impact thousands of workers on Universal Credit.

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The AET determines whether claimants are placed in the "Intensive Work Search" group or the "Light Touch" group.

Before this week, people on the benefit had to earn the equivalent of 12 hours pay per week at the National Living Wage to not fall into the Intensive Work Search group, which means fulfilling more commitments to keep their benefits.

However, the Department for Work and Pensions (DWP) increased the threshold on Monday to 15 hours per week, which means more than 120,000 extra workers on Universal Credit will go into the Intensive Work Search group, requiring them to carry out more activities - such as work searches and applications - and can mean more contact with a work coach at Jobcentre Plus.

Previously, those claimants would have been above the AET and in the Light Touch group, meaning they are not required to look for work and have less contact with the job centre.

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jobcentre plus sign Glasgow, Scotland, UK
More Universal Credit claimants will have regular contact with their job centre under the changes. (Alamy)

It is the second time in recent months that the threshold has been raised - it increased from 9 hours to 12 hours last September.

Before Monday, the AET rate worked out on average at £494 a month for single claimants, or £782 a month if claiming as a couple.

The change to the threshold has increased it to £617 for individual claimants and £988 for couples.

The change will start impacting claimants from 26 February.

Some people on Universal Credit are exempt from the changes, including those unable to work because of long-term sickness or disability, as well as anyone over the state pension age of 66.

The government said: "Over 120,000 more low-income workers will receive tailored support and be supported to earn more.

"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."

LONDON, UNITED KINGDOM - JANUARY 17: Secretary of State for Work and Pensions Mel Stride leaves 10 Downing Street after attending the weekly Cabinet meeting chaired by Prime Minister Rishi Sunak in London, United Kingdom on January 17, 2023. (Photo by Rasid Necati Aslim/Anadolu Agency via Getty Images)
Work and pensions secretary Mel Stride has announced changes to Universal Credit. (Getty Images)

Work and pensions secretary 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."

In his autumn statement last November, chancellor Jeremy Hunt angered charities by saying about 600,000 people on Universal Credit working 15 to 35 hours a week would be required to meet a work coach "to increase their hours or earnings".

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