Five benefits changes the Government could make next month in its Autumn Budget – from PIP to fraud crackdown

CHANCELLOR Rachel Reeves could announce several changes that may affect people on benefits when she delivers her first Budget later this month.

The head of Britain’s finances will unveil the Government’s latest plan for spending and tax on October 30.

At the beginning of September, the Chancellor cautioned that the Budget could involve “difficult decisions” on tax, spending and also benefits.

Ms Reeves has previously warned of a £22billion financial black hole in the UK’s finances, which she claims was left by the former Conservative government.

This grave figure has led many experts to believe the upcoming Budget could spell further misery for thousands living under the cosh.

But what exactly could it mean for the 20million Brits who claim benefits?

Benefits could increase in line with inflation

In previous Budgets, benefits like Universal Credit have been increased in line with September’s inflation figure.

This was seen in the Autumn Statement delivered last November, with households on benefits ending up £470 better off as a result.

However, this has not always been the case.

The previous government froze benefits for four years in the 2010s, in a blow to people who are eligible for the help.

However, experts predict that the Government will uprate benefits in line with September’s inflation figure, which will be released next month.

Experts at Pantheon Macroeconomics are forecasting that it will be around 2%.

Cuts to benefits spending could be announced

The Chancellor is understood to be mulling a reduction in the amount the state spends on benefits.

This rumour has been further solidified by comments made by Prime Minster Sir Keir Starmer.

At the Labour Party conference in Liverpool last week, the PM said there has to be “trade-offs” between maintaining the welfare state and supporting those in need.

He admitted there would be “hard cases”, but that the Government and business must join forces to get people clocking on again.

There are around 2.8million people who are long-term sick, with numbers having surged since the pandemic.

Future cuts to working-age benefits and tax rises have also been hinted by health secretary Wes Streeting.

Working-age benefits provide financial support to individuals and families who are of working age.

There are a number of different types including Universal Credit, Jobseekers Allowance, and Employment and Support Allowance (ESA).

Mr Streeting told the New Statesman that the Chancellor could make cuts to these benefits to help plug the £22billion black hole in the public purse.

It comes after the Labour government axed the £300 Winter Fuel Payment for pensioners who are not on means-tested benefits.

Mr Streeting said: “There are other choices to come and these aren’t just Rachel’s choices to face up to, these are the choices of the whole government.”

Crackdown on benefits fraud may be detailed

A crackdown on benefit fraud could also be outlined at the upcoming Budget.

The Government has previously promised to crackdown on fraudsters and get more people into work as part of a shakeup to the benefits system.

This could mean new laws will be introduced so that the Department for Work and Pensions (DWP) can ask banks to report fraudulent activity, for instance if a claimant has more than £16,000 in savings, or how much they earn.

Under the proposals, the DWP won’t be able to access bank accounts directly, and the exact information they can request is still to be confirmed.

The department could also be handed more powers to recover debts from those who can afford to pay it back but have avoided doing so.

Sir Keir Starmer said in his speech at the Labour Party conference: “If we want to maintain support for the welfare state, then we will legislate to stop benefit fraud.” 

Change to PIP payments may be confirmed

Personal Independent Payments (PIP) are a benefit for people who are under State Pension age and need help with day-to-day life because of a long-term illness or disability.

The previous Government began a consultation on reshaping the payment which swiftly closed a couple of weeks later.

At the time, there were suggestions that PIP payments could be changed to vouchers or one-off grants.

In August, Work and Pensions Secretary Liz Kendall unveiled a “Back to Work” plan.

As part of this move, changes to disability benefits are expected to be introduced to help cut NHS waiting lists and help people get back into work.

This has led many to believe she could roll out the changes floated by the Tory government to help aid her plan.

The Treasury has been contacted for further comment.