Contact’s response to the Spring Budget

4 mins read

Wednesday 15 March 2023

Tags: universal credit, carer's allowance, budget, social tariff, energy price guarantee, work capability assessment

Chancellor Jeremy Hunt has today announced the government’s Budget for the year ahead, saying it would “break down barriers that stop people working.”

Though much of the Budget was focused on getting people back into work, there were also some important updates on energy costs, childcare support and Universal Credit.

We explain these below.

Energy: Updates on price cap and prepayment meters

The Chancellor confirmed that the energy price guarantee of £2,500 will remain in place for another three months.

It is important to be aware that this is not a limit on your energy bill. It is a limit on what the supplier can charge for each unit of energy, so that average usage at that unit rate won’t exceed £2,500. If your energy usage is higher than average, your bill could exceed £2,500.

Mr Hunt also announced that the four million households on prepayment meters will no longer pay more for their energy than customers paying by direct debit.

Una Summerson, Head of Policy at Contact, said: “Families with disabled children who have been struggling with unavoidably high energy bills due to running vital life-saving equipment will breathe a sigh of relief with the continued support.

“We now urge the government to use the next three months to implement an energy social tariff for disabled households to target support at those that need it most.”

Childcare: Not enough urgency to tackle lack of specialist places and higher costs

As anticipated, one of the biggest policy changes announced in today’s Budget was the expansion of free childcare support to more working families.

Eligible working parents of children aged between nine months and three years in England will now be entitled to 30 hours per week of free childcare for 38 weeks a year. This will be rolled out in phases from April 2024 and is in addition to the 30 hours a week already provided for eligible working parents of three- to four-year-olds.

Una added: “Today’s Budget focused on getting people back into work, but it missed a large section of the working population: parents with disabled children. Help towards childcare costs through Universal Credit and for one- and two-year-olds is welcome, especially as childcare costs are eight times more for a disabled child. There were also some sensible proposals to address the huge gaps in the childcare workforce. But the urgency and ambition required to deal with the scale of the problem was not there.

“Our Counting the Costs research found that it is a combination of lack of suitable childcare for disabled children and prohibitive costs which force parent carers to give up jobs and careers. We need a childcare workforce trained to meet the needs of disabled children in order to ensure there are enough specialist places in all areas across the UK. And we need targeted financial help for families with disabled children who face significantly higher costs for childcare.”

Universal Credit: Scrapping of Work Capability Assessment

Another major announcement was the decision to abolish the work capability assessment used by Universal Credit and other benefits in Great Britain. This amounts to the biggest change in disability benefits in the last 10 years.

The Chancellor also plans to scrap the ‘limited capability for work and work-related activity’ (LCWRA) element under Universal Credit and replace it with a new ‘health element’.

Eligibility for the health top-up in Universal Credit will be “passported” via the Personal Independence Payment benefit, rather than through the work capability assessment.

The government has just published a Health and Disability White Paper with more details about these changes. Our specialist benefits adviser, Derek Sinclair, will provide more clarity about what these reforms will mean for families with disabled children as soon as we’ve digested the detailed information in the White Paper.  

Carer’s Allowance: Failure to address earnings limit

Despite its focus on getting people into work, today’s Budget was silent on Carer’s Allowance.

“The failure to address the Carer’s Allowance earnings limit means many families will continue to limit their hours of work so they don’t lose their entitlement to this vital benefit,” Una explained.

“We have long been calling for the earnings limit to be raised to at least £199.50 per week to enable more parent carers to work more hours, which many want to do.”