Reforms coming into effect in April will support those who can work to get into employment, while ensuring there is a safety net in place for those who need it.
These include more generous work allowances for disabled people and families with children and extra financial support in the workplace through the government’s Access to Work scheme.
Other changes include increasing the State Pension, Maternity Allowance, most benefits for the additional cost of a disability and for carers, ensuring the government is supporting the most vulnerable.
The Secretary of State for Work and Pensions, Amber Rudd, said:
“Our benefits system must be an ally of the people it serves, ensuring we are supporting the most vulnerable and that work always pays.
“That’s why we’re bringing in a number of changes to put more money in people’s pockets, while protecting families, pensioners and disabled people. Our reforms are creating a fair compassionate society where everyone can reach their full potential, while maintaining a safety net for those who need it.”
Access to Work cap increase
People will now be able to claim up to an extra £2,000 a year to help pay for additional support that they may need in the workplace through the government’s Access to Work scheme, meaning the maximum annual grant is £59,200.
Access for Work can cover workplace adaptations, assistive technology, transport and interpreters.
Automatic enrolment into a workplace pension
To help workers to save for their future, the automatic enrolment pension contribution rates will increase from 5% to 8% on 6 April 2019.
Automatic enrolment was created to help people with their long-term pension savings and works by requiring employers to enroll all eligible staff into a workplace pension.
More than 10 million people are newly saving or saving more and the increase in minimum contribution rates will build on this success.
The State Pension will also increase in line with the ‘triple lock’. The full basic State Pension will be up by 2.6% to £129.20 a week. This means that the Government will have raised the full basic State Pension by £1,640 a year since 2010.
The full rate of the new State Pension will also increase by 2.6%, to £168.60 a week.
Universal Credit Work Allowances
The amount which families with children and disabled people can earn before their Universal Credit is gradually reduced (work allowances) will increase, meaning that people can earn an extra £1,000 a year before their Universal Credit starts to reduce.
This change will see 2.4 million families keep up to an extra £630 per year of what they earn.
Maternity Allowance may be paid to people who do not qualify for Statutory Maternity Pay. It can be claimed from the 26th week of pregnancy, and payments can start up to 11 weeks before the baby is due. Maternity Allowance will increase to £148.68 per week from £145.18.
Other changes coming into effect in April
Disability and carers’ benefit rates
Most of the benefits for the additional costs of disability and for carers have been increased by 2.4% in line with prices from 8 April.
The main rates for most working-age benefits in addition to Child Benefit, and certain elements of Working Tax Credit and Child Tax Credit, will remain the same.
This is the final year of the 4 year benefit freeze announced at Summer Budget 2015.
National living Wage
The National Living Wage will increase by almost 5% to £8.21 per hour, benefiting 1.8 million workers from April.
Full–time workers earning National Living Wage will receive an additional £690 over the year and be more than £2,750 better off compared to 2015, when the rate was first announced.