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Budget 2023: How have benefits changed?

From stricter rules for jobseekers to more help for disabled workers, here are all the changes you need to know

What's happening? Chancellor Jeremy Hunt has announced a raft of benefit changes in this year's spring budget that will impact millions of people.

As a number of payouts from universal credit to job seekers' allowance are set to increase in line with inflation in April, Hunt told parliament on Wednesday that he was delivering a budget for growth.

However, while the chancellor's announcements appear to offer financial relief in the form of increased childcare support, he warned there would be a more stringent approach to tackling benefits claimants who "fail to meet strict work-search requirements or choose not to take up a reasonable job offer".

Hunt also pledged to support more disabled people and those with mental health issues into work, as well as raising the threshold at which carers pay tax on care income and helping care leavers into other work.

Here, Yahoo News UK explains how benefits are changing...

Childcare changes

Announcing that all children under five would be offered 30 free hours of childcare (to kick in gradually until the full plan is in place in 2025), Hunt also announced extra childcare support for those claiming universal credit.

Recipients of universal credit previously received £646 per month towards childcare costs for one child and £1,108 for two children – this has now been raised to £950 for one child and £1,630 for two children.

Additionally, parents who receive universal credit will no longer have to pay their childcare costs upfront and be reimbursed at a later date – instead, the government will make the payments upfront.

Hunt said this would benefit 700,000 parents on universal credit.

Britain's Chancellor of the Exchequer Jeremy Hunt holds the budget box on Downing Street in London, Britain March 15, 2023. REUTERS/Peter Nicholls
Jeremy Hunt has announced more childcare support for those claiming Universal Credit. (Reuters)

Rule changes for jobseekers

Hunt issued a clear message to recipients of universal credit who were looking for jobs or recorded low earnings – stating people who appeared to be avoiding work would be sanctioned, and bumping up the amount of hours people must work to leave the close support of a work coach.

"Independence is always better than dependence, which is why we believe those who can work, should," Hunt said, pledging: "Sanctions will be applied more rigorously to those who fail to meet strict work-search requirements or choose not to take up a reasonable job offer.

Those working low hours will now have the administrative earnings threshold increased from the equivalent of 15 hours to 18 hours at national living wage for an individual claimant. Hunt added: "This means anyone working below this level will receive more work coach support alongside a more intensive conditionality regime."

BLACKBURN-ENGLAND - APRIL 29: A man walks past a Jobcentre Plus employment office on April 29, 2021 in Blackburn, England. (Photo by Nathan Stirk/Getty Images)
The government has announced stricter rules for jokseekers (Getty Images)

Support for disabled workers

Touting the changes for disabled workers as the biggest change to the welfare system for a decade, Hunt said the number of working disabled people was up by 2 million.

"We could fill half the vacancies in the economy with people who say they would like to work despite being inactive due to sickness or disability," Hunt said. "With Zoom, Teams and new working models that make it easier to work from home this is more possible than ever before."

His key announcement on disability support was the plan to scrap the UK's work capability assessment "and separate benefit entitlement from an individual's ability to work".

This means that people with disabilities will be able to work without losing their benefits and avoid endless paperwork to qualify for the benefits they do receive.

"As a result, disabled benefit claimants will always be able to seek work without fear of losing financial support,” Hunt said.

He also announced plans to fund a new voluntary employment programme for disabled people called "universal support", which intends to spend £4,000 per person on finding and supporting disabled people back into work – with the move intended to fund 50,000 places.

For those forced out of the workplace by issues such as back pain or mental health problems, Hunt announced a £400m plan to increase the availability of mental health and musculoskeletal resources.

RETRANSMITTED CORRECTING BYLINE Chancellor of the Exchequer Jeremy Hunt leaves 11 Downing Street, London, with his ministerial box and members of his ministerial team before delivering his Budget at the Houses of Parliament. Picture date: Wednesday March 15, 2023. See PA story POLITICS Budget. Photo credit should read: Victoria Jones/PA Wire (Photo by Victoria Jones/PA Images via Getty Images)
Jeremy Hunt has announced changes for benefits claimants. (Victoria Jones/PA Wire/ PA Images via Getty Images)

Benefits and other savings

Although not part of the spring budget, changes announced in the autumn budget are set to come into force in April – meaning claimants will see their benefits and tax credits rise in line with inflation.

Affected benefits are: attendance allowance, carer’s allowance, disability living allowance / child disability payment, employment and support allowance (ESA), housing benefit, incapacity benefit, income support, jobseeker’s allowance, maternity/paternity/shared parental allowance, pension credit, personal independence payment (PIP) / adult disability payment, state pension, widow’s pension and universal credit.

The chancellor also announced that the government's energy price guarantee would remain in place until the end of June – capping bills at £2,500 rather than the anticipated rise to £3,000 – as well as extending the 5p cut in fuel duty, meaning savings for drivers.

However, while benefits have gone up – this is simply a response to inflation rather than a real time boost in income. And with Hunt freezing income tax bands, and an ongoing cost of living crisis, many could see themselves worse off after the budget.

To see how your household income will be affected, click here for a budget calculator from cost of living data company Nous.