Working people on Universal Credit in Great Britain will receive a boost in support to their earnings starting this spring. Over 120,000 low-income workers will be the beneficiaries of tailored support, as new regulations that came into effect on January 30 will now make it possible.
The Administrative Earnings Threshold (AET) determines which group a Universal Credit claimant is placed in, based on their earnings. This, in turn, impacts the level of support they receive to find work and develop a career, as well as the types of activities they must undertake.
From the end of February, an increase to the AET will mean that more Universal Credit claimants will be moved from the ‘Light Touch’ group to the ‘Intensive Work Search’ group. This will help them to find better-paid work and improve their long-term prospects. With a previous increase in September, this will mean that around a quarter of a million more people will have been moved into the ‘Intensive Work Search’ group.
The new claimant commitments will be customized to each individual’s circumstances, taking into consideration their caring responsibilities and any health conditions they may have. Secretary of State for Work and Pensions, Mel Stride MP, said: “A hallmark of a compassionate society is giving those on low incomes the tools to progress and earn more. It is important that we continue to deliver targeted support so that those in work have access to the expertise and guidance of our dedicated work coaches.”
By raising the Administrative Earnings Threshold, the government aims to create a robust labor market, building on positive changes that have already been made, and supporting even more people to progress in the workplace. The additional claimants will benefit from more face-to-face time with a work coach, which will allow them to access opportunities to increase their earnings. This could be in the form of developing their skills, progressing in their current sector, or starting a new role.
The new AET equates to an individual working 15 hours per week or a couple working 24 hours per week between them, at the adult National Living Wage rate. The government will also be driving forward an agenda this year to ensure that the labor market remains robust, reviewing workforce participation at a fast pace to understand what action can be taken to drive down economic inactivity.
In 2021, the Universal Credit taper rate was reduced from 63% to 55%, and the Work Allowance was increased by £500 per year, so claimants can keep more of what they earn. The National Living Wage is also set to increase by 9.7%, bringing it to £10.42 an hour from April. The rise in the AET will build on this work and ensure that work pays, complemented by a new In Work Progression offer, which will be rolled out to all Jobcentres by the end of March. This offer will be focused on helping claimants in the ‘Light Touch’ work group to progress.
People impacted by the change will be contacted with more details via their Universal Credit journal. Claimants will receive this journal message at the end of their first full assessment period after Sunday, 26 February. This news is a welcome relief for many working people on Universal Credit, who have struggled to make ends meet during the pandemic. It is a step in the right direction towards creating a fairer and more equal society, where everyone has access to the support they need to achieve their career goals and financial stability.
The UK government has long been criticized for its treatment of low-income workers and the welfare system, with many calling for systemic change. This new regulation is a positive step forward, and it is hoped that it will lead to further changes.
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