Big change Universal Credit rules from TODAY – how to avoid your payments being cut it you’re one of 180,000 affected
MAJOR changes to Universal Credit today mean thousands of households will have to meet stricter requirements to access their cash.
The Department for Work and Pensions (DWP) has increased a threshold called the “Administrative Earnings Threshold” (AET).
This determines the level of support that you get from your job coach, as well as how intensively you need to look for work.
Failure to meet the stringent requirements could lead to sanctions or worst case losing Universal Credit payments altogether.
The decision to increase the AET for a third time was announced as part of the Spring Budget 2023.
The previous two increases took place on September 26, 2022, and
January 30, 2023.
The DWP estimates that the three changes together have pushed 400,000 people into more intensive job search requirements.
How does the Administrative Earnings Threshold work?
If you’re earning and receive Universal Credit, you are split into one of two groups, known as “light touch” and “intensive work search”.
The group you’re put into is determined by how much you earn and how many hours you work.
If you earn below the AET, you are automatically placed into the intensive work search group.
This means you get extra support to find more work or to increase your pay.
This may include access to the Flexible Support Fund, for instance.
However, it also means that you will need to engage regularly with your Job Coach and show you are committed.
For example, you will be expected to attend fortnightly meetings with your coach and have frequent interactions with Job Centre Plus.
You may also be expected to apply for, and accept, available job interviews and you could even be asked to research new career options.
If your earnings are equal to or above the AET level, you will be placed in the light touch regime.
If you are in this group, you may still be expected to try and increase your work and earnings, but you won’t have work search and availability requirements imposed on you.
Universal Credit
HERE'S everything to know about Universal Credit:
- What is Universal Credit? Everything you need to know including how to apply
- Universal Credit calculator: How much can I claim and how do I apply?
- Universal Credit login: How do I sign in to my online account?
- How much can I earn before Universal Credit is reduced and do I get a work allowance?
- What is a Universal Credit advance payment? How to apply and pay it back
- Are Universal Credit payments going up and how much more will I get?
- How to claim Universal Credit if you’re self-employed
- How many hours can I work on Universal Credit and will my payment be reduced?
- What is a Universal Credit budgeting advance and how much could I get?
- What is the Universal Credit housing element and how much of your rent does it pay?
For instance, you will not be expected to routinely attend work coach interviews. You can, however, choose to get more support if you wish.
If you earn more than the AET, and you work enough hours to satisfy the Conditional Earnings Threshold (CET), that means the Government has deemed you to be working “enough”, and there will be no interventions at all.
The CET is based on the number of hours you work, and is tailored to individual circumstances such as health conditions and caring responsibilities.
How has the AET changed?
Today, the Government has raised the AET, which means that hundreds of thousands more people will be tipped into the ‘intensive work search’ group.
Previously, the AET was £677 per calendar month for an individual – the equivalent of working fifteen hours per week at the national minimum wage (NMW).
The threshold for couples was £1,083 per month for couples – the equivalent of 24 hours a week at NMW.
As of today, individuals will need to earn £892 each month, while couples will need to earn £1,437 a month to avoid being placed into the intensive work search group.
This is the equivalent of 18 hours a week for individuals and 29 hours a week for couples at this year’s National Minimum Wage rates.
However, people aged between 18 and 20 may have to work more hours to reach the AET as they are not entitled to the NMW.
However, the Government has stressed that despite the AET being calculated by multiplying the NLW rate by a number of hours, it is not designed specifically to make people work longer.
The other way to exceed the AET is to look for higher paying work.
If the NMW rises, the AET will also increase accordingly.
Are you missing out on benefits?
YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to
Charity Turn2Us’ benefits calculator works out what you could get.
Entitledto’s free calculator determines whether you qualify for various benefits, tax credit and Universal Credit.
MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto’s data.
You can use Policy in Practice’s calculator to determine which benefits you could receive and how much cash you’ll have left over each month after paying for housing costs.
Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.
How to avoid your benefits being cut
If you’re one of the hundreds of thousands of people who will be placed into the intensive work search regime, you should be contacted by your Work Coach through your Universal Credit journal.
You should also be notified by either email or text.
At this point, the government says that a Claimant Commitment Review interview will be booked in, which you must attend.
If you skip the meeting, you could find that your Universal Credit claim is sanctioned.
The meeting should be booked for a time when you’re not in work.
At the review you will have to agree what steps you will take to find more or better paid work.
You will be expected to keep to this agreement and check back in regularly to discuss your progress.
In the Memorandum introducing the change to the regulations the government said: “[Universal Credit] provides claimants with the support they need to prepare for work, to move into work, or to earn more if already in work.
“Departmental analysts have estimated that this change to the AET will bring over 180,000 additional claimants into the Intensive Work Search regime.
The Department is committed to ensuring that people in work look for more and better work.
This is beneficial as it will reduce spending on benefits, and can also help individuals as they become more independent moving off benefits.”
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