Benefit changes announced in yesterday’s budget

2 mins read

Thursday 7 March 2024

Tags: benefits, universal credit, spring budget, welfare rights, child benefit

Our welfare right expert Derek explains Chancellor Jeremy Hunt’s announced changes to the benefit system.

Alongside the headline 2p National Insurance cut, yesterday’s budget announcement included a number of small changes to the benefit system.

This includes extra resources – including £110 million extra in 2024/25- to provide the Department for Work and Pensions (DWP) with additional capacity to process disability benefit claims. Currently, people claiming benefits such as Disability Living Allowance (DLA) and Personal Independence Payment (PIP) face very lengthy waiting times. This extra funding is designed to make sure that decisions are made in a ‘timely manner’ moving forward.

Other benefits announcements include:

  • Increasing the maximum time someone on Universal Credit has to repay a “budgeting advance” from 12 to 24 months. A budgeting advance is a loan of Universal Credit. This will apply to loans taken out from December 2024 onwards. This measure should ensure that claimants repay smaller amounts, but over a longer period of time.
  • Increasing the Child Benefit earnings threshold from £50,000 to £60,000. This is the maximum amount you or your partner can earn before Child Benefit starts to be clawed back via income tax. Alongside this, the rate at which Child Benefit is clawed back will be halved. This means you will only repay the whole amount of Child Benefit if you earn £80,000. Currently, you repay the whole amount of Child Benefit if you earn £60,000. Both these changes will take place from April 2024.
  • The Chancellor announced a consultation on changing the Child Benefit system so that it is based on a household’s earnings, rather than individual earnings.
  • Mr Hunt also announced extra funding to extend the Household Support Fund for a further six months. Local authorities use this to provide support with essential costs to vulnerable groups in their areas.