Universal Credit is a critical lifeline for many working-age people in the UK. It helps cover living costs for those who are employed, unemployed, or unable to work due to illness or disability. In August 2024, some changes are coming to Universal Credit, primarily regarding the payment schedule due to the summer bank holiday. Let’s cut into these changes and what they mean for claimants.
Table of Contents
Payment Schedule
The most significant change in August 2024 is the adjustment in the Universal Credit payment date. The Department for Work and Pensions (DWP) has announced that payments originally set for August 26th will be moved to Friday, August 23rd. This change affects all claimants whose payment date falls on the bank holiday. The core elements of Universal Credit, including the amount, remain unchanged.
No Change
The actual amount of Universal Credit payments remains consistent, following a 6.7% uplift introduced in April 2024 to counter the rising cost of living. This increase continues to be applied to all ongoing Universal Credit payments.
Political Context
The Labour Party’s recent victory in the general election has brought new perspectives to the table. Liz Kendall, the new Work and Pensions Secretary, has shown interest in reviewing the Universal Credit system. Her focus is on ensuring the system effectively encourages work and addresses poverty. However, significant changes typically require extensive consultation periods, so any major modifications are not expected immediately.
Future Review Areas
While immediate changes are limited, the DWP has indicated a review of Universal Credit is on the horizon. Here are potential areas for reform under the Labour government’s review:
Sanctions Regime
The current sanctions system, which penalizes claimants for not complying with job search requirements, has faced criticism for its severity. Future changes might introduce a more flexible approach or alternative measures.
Minimum Income Floor
The Minimum Income Floor policy limits the amount a claimant can earn before their Universal Credit payments begin to decrease. This review could explore adjusting this floor or even removing it altogether.
Work Allowances
Work allowances determine how much a claimant can earn without affecting their Universal Credit entitlement. Possible changes might involve increasing these allowances to better incentivize work.
Advance Payments
The current system of advance payments provides upfront credit for new claimants. Revisions could aim to make these advances more accessible or reduce the potential debt burden on claimants.
What to Expect
For now, Universal Credit recipients can expect stability regarding the core elements of their benefits. The August bank holiday will cause an earlier payment date for some, but the overall structure of Universal Credit remains intact. Keep an eye out for future announcements from the DWP concerning the scope and timeline of the upcoming review.
The Big Changes in Universal Credit by DWP in August 2024 primarily focus on the payment date adjustment due to the bank holiday. While significant changes are not happening immediately, the new government’s intentions to review and potentially reform the system aim to make Universal Credit more effective in supporting those in need.
FAQs
What is the main change in Universal Credit for August 2024?
The main change is the payment date moving to August 23rd due to the bank holiday.
Has the Universal Credit payment amount changed in August 2024?
No, the payment amount remains the same as the 6.7% uplift introduced in April 2024.
Who is the new Work and Pensions Secretary?
Liz Kendall is the new Work and Pensions Secretary.
Are there immediate changes to the sanctions regime?
No immediate changes, but the sanctions regime may be reviewed.
Will the Minimum Income Floor be removed?
It’s a possibility under the upcoming review, but no changes are confirmed yet.