There were no big surprises for claimants in today’s budget, but a continued lack of certainty about what the future will bring. In particular, there is still no clarity about how the work capability assessment (WCA) will change and no mention whatsoever of changes to personal independence payment (PIP).
WCA
In today’s budget the chancellor announced that “We inherited the last government’s plan to reform the work capability assessment. We will deliver the savings as part of our fundamental reform to the health and disability benefits system that my right honourable friend the work and pensions secretary will bring forward.”
So, the chancellor appears to be saying that Labour will match the projected savings to the DWP that were to be made by the Conservative’s WCA changes, but she has not confirmed that the savings will be made in the same way.
ESA to UC migration
It is hardly news, but the budget document does confirm the ESA to UC managed migration has begun.
“The government will accelerate the migration of claimants onto UC from Employment and Support Allowance (ESA), bringing the start date forward from 2028 to September 2024. This move will bring more people into a modern benefit regime, continuing to ensure they are supported to look for and move into work. Around half of ESA claimants will receive more financial support on UC, while others will receive transitional protection to ensure nobody is worse off at the point at which they move over to UC.”
Carers allowance
The weekly earnings limit for carer’s allowance is to be increased to the equivalent of 16 hours a week at the national living wage.
The chancellor also said that Labour also looking at a way to remove the current cliff edge, where going even a penny over the earnings limit ends eligibility for carer’s allowance.
The budget document states:
“The government is also giving carers greater flexibility to work and increase their financial security by raising the Carer’s Allowance Weekly Earnings Limit to the equivalent of 16 hours at the NLW. The changes will support those receiving Carer’s Allowance, 70% of which are women, to start work or work more hours.64 This is an increase of £45 per week and will allow over 60,000 more carers to access Carer’s Allowance.65 This will be the largest increase to the earnings limit since Carer’s Allowance was introduced in 1976.”
“The government also recently announced an independent review into overpayments of Carer’s Allowance, which will consider how they occurred and what operational changes can be made to minimise the risk of future overpayments. Alongside this, the government will also carry out further work on the earnings limit to explore what more can be done to help support more carers into work.”
Fraud and error
In her speech, the chancellor confirmed that the DWP will be able to access claimants’ bank accounts.
Reeves said “I can today announce a crackdown on fraud in our welfare system, often the work of criminal gangs. We will expand DWP’s counter fraud teams using innovative new methods to prevent illegal activity and provide new legal powers to crackdown on fraudsters, including direct access to bank accounts to recover debt.”
The budget document confirms that:
“The government is expanding DWP’s fraud and error staff by 3,000, as part of its £110 million investment in 2025-26 to tackle fraud and error. This is expected to deliver gross savings of £705 million in 2029-30. “
“The government will increase DWP’s powers to recover debt as part of the forthcoming Fraud, Error and Debt Bill. This is expected to save £260 million in 2029-30. “
“The government will invest in DWP to carry out additional checks on Universal Credit claimants who have changes in their circumstances, as part of a £110 million investment in 2025-26 to tackle fraud and error. This is expected to save £250 million in 2029-30.”
Universal credit debt recovery
The government will reduce the proportion of money UC claimants can have deducted to repay debts from 25% down to 15% of the standard allowance.
“In addition, the government is helping low-income households on UC by allowing them to pay off their debts over a longer timeframe and keep more of their UC each month. The government is creating a new Fair Repayment Rate which caps debt repayments made through UC at 15% of the standard allowance. This will benefit around 1.2 million households as they will keep more of their UC award each month, with households expected to be better off by £420 a year on average. Around 700,000 of the poorest families with children will benefit as a result of this change, supporting the government’s ambition to tackle child poverty.”
Benefits uprating
The chancellor confirmed that working age benefits will be uprated by just 1.7% in April 2025.
“DWP and HMRC working age benefits uprating for 2025-26 – The government will uprate working age benefits by September 2024 CPI of 1.7% from April 2025. This will see around 5.7 million families on Universal Credit gain £150 on average in 2025-26.”
Get Britain working
The Chancellor confirmed that “The government will shortly be publishing the Get Britain Working white paper tackling the root causes of inactivity with an integrated approach across health, education and welfare.”
The budget document states:
“ Get Britain Working White Paper – The government will shortly publish the Get Britain Working White Paper which will set out its £240 million investment to trail new ways of getting people back into work. The government will test new approaches and collect robust evidence on how to tackle the root causes of ill-health-related inactivity, support young people who are ‘not in education, employment, or training’ (NEET), and help people to develop their careers.”
“Get Britain Working Trailblazers – As part of the Get Britain Working package, the government will establish eight trailblazer areas across England and Wales that bring together health, employment and skills services to improve the support available to those who are inactive due to ill health and help them return to work. This will include NHS England Health and Growth Accelerators in at least three Integrated Care Systems to develop evidence of the impact of targeted action on the top health conditions driving economic inactivity.“
You can download the full budget document here
