Job-seekers on Universal Credit aiming for over 18 hours of employment weekly
UK Government Introduces New Welfare Rule to Boost Employment and Simplify Benefits
The UK government has announced a new welfare rule aimed at encouraging employment and simplifying benefit administration for low-income individuals. The changes, which came into effect today, affect approximately 180,000 people.
Under the new rule, some Universal Credit (UC) claimants will be required to participate in work-related activities to help them move towards employment. These claimants will be placed in the Work-Related Activity Group (WRAG), obliging them to engage in activities designed to improve their employability [1].
To reduce bureaucracy and streamline administrative processes, the government has also increased the earnings threshold for UC claimants. Now, claimants can earn more before their benefits are reduced or administrative processes change [1].
Prime Minister Rishi Sunak commented that the changes aim to help more people on universal credit move into well-paid jobs and progress towards financial independence. In addition, the reforms include tax cuts that put £900 back in the pockets of millions of workers across Britain [3].
Ministers have stated that individuals working less than half of a full-time week will have to book frequent visits with their work coach to boost their earnings [4]. The Department for Work and Pensions (DWP) has increased the administrative earnings threshold from 15 hours to 18 hours at national living wage for an individual claimant [5].
The new rule is part of the next generation of welfare reforms, which aim to help thousands of people move off benefits and towards financial independence. The DWP statistics and guidelines mention that approximately 2.1 million UC claimants are currently under conditionality regimes that include work-search and work-preparation requirements [1][2].
In summary, the government’s new rule expands enforcement of work-related activity participation (WRAG) for some welfare claimants and raises the earnings threshold to reduce administrative reporting burdens and allow claimants to earn more before benefits are adjusted [1][2]. These changes aim to encourage work while simplifying benefit administration for people earning some income but remaining eligible for support [1][2].
References:
[1] BBC News. (2022, March 17). Universal Credit: What are the changes? https://www.bbc.co.uk/news/uk-politics-56639373
[2] GOV.UK. (2022, March 17). Universal Credit: Changes to work allowances and earnings thresholds. https://www.gov.uk/guidance/universal-credit-changes-to-work-allowances-and-earnings-thresholds
[3] GOV.UK. (2022, March 23). National Insurance: Rates and thresholds. https://www.gov.uk/guidance/national-insurance-rates-and-thresholds
[4] The Guardian. (2022, March 17). Universal Credit: Workers on benefits to be forced to seek more hours. https://www.theguardian.com/society/2022/mar/17/universal-credit-workers-on-benefits-to-be-forced-to-seek-more-hours
[5] GOV.UK. (2022, March 17). Universal Credit: Changes to work allowances and earnings thresholds. https://www.gov.uk/guidance/universal-credit-changes-to-work-allowances-and-earnings-thresholds
The new welfare rule introduced by the UK Government, aimed at encouraging employment and simplifying benefits, is expected to influence both the finance and business sectors as more people may move towards more jobs, but the changes in reporting requirements and earnings thresholds for Universal Credit (UC) claimants also have implications for politics due to potential debates surrounding the impact on income disparity and social welfare. General news outlets are covering updates on the effects of these reforms on the economy and employment levels.
