Millions of benefit claimants are about to see an increase in their Universal Credit and other Department for Work and Pensions (DWP) benefits payments in the coming days.

This increase, which was announced last month, is finally being put into effect. The boost is set to benefit not only Universal Credit recipients but also claimants of Personal Independence Payment (PIP) and Carer’s Allowance.

The 1.7% Rise in Universal Credit

From April 7, a 1.7% increase has been applied to various benefits, including Universal Credit. This is part of the annual rise in payments, which helps to keep pace with inflation. The rate increase applies across the board for many of the DWP’s core benefits, such as Universal Credit, PIP, and Carer’s Allowance.

While the 1.7% rise is a welcome development for many, it is important to note that the state pension experienced a larger increase, 4.1%, due to the triple-lock system.

This system ensures that the state pension increases by whichever is the highest of inflation, wage growth, or a fixed increase of 2.5%. However, this rise does not apply across all benefits; Universal Credit, PIP, and Carer’s Allowance only saw a smaller 1.7% increase.

The Delay in Payment Increases

Although the increases have already been confirmed, many recipients are not seeing the extra cash in their bank accounts just yet. This delay is mainly due to the DWP’s assessment period, which plays a crucial role in determining how much Universal Credit or other benefits you are entitled to.

For Universal Credit, the amount you receive depends on various factors, such as your age, whether you live with a partner, if you have children, if you have a disability, or whether you are caring for someone. Furthermore, your payments will also vary based on your income, and how much you earn can directly affect your monthly benefit.

Typically, Universal Credit is paid seven days after the end of the four-week assessment period. This means that claimants are paid in arrears, based on their circumstances from the previous month.

As there is no set amount for Universal Credit, the final payment amount fluctuates depending on the individual’s situation.

For example, if you earn more in a particular month, the amount of Universal Credit you receive in the following month will likely decrease. Conversely, if your earnings go down, your payment may increase, making your benefit payment a variable figure from month to month.

How Does the Increase Affect You?

Many claimants are concerned about when the new, higher payments will take effect. Fortunately, the process is relatively straightforward if you understand how the assessment periods work.

To qualify for the increase, your assessment period must begin after April 7. This means that if your assessment period begins anytime from April 8 onwards, you will start to see the increased payment in May.

The new payment rates will be applied to your Universal Credit for the assessment period that starts after April 7, and your updated payment will reflect the new rates.

For example, if your assessment period starts on April 8 and runs until May 7, your increased payment will appear in your bank account on May 13, a week after the end of your assessment period.

On the other hand, if your assessment period begins after April 7, your new rates will only take effect during your first full assessment period of the new tax year.

When Will the New Rates Take Effect?

To further clarify, let’s look at two examples provided by experts:

• John’s Case: John’s assessment period runs from March 26 to April 25. His new assessment period begins on April 26. Since his assessment period started before April 7, he will not see the new rates until his next full assessment period.
• Rachel’s Case: Rachel’s assessment period starts on April 12 and runs until May 11. Her new assessment period will begin on May 12. Because her assessment period starts after April 7, she will see the new rates applied to her May Universal Credit payment, which will be paid on May 18.

This system ensures that anyone with an assessment period starting after April 7 will see the new rates reflected in their payment in May.

For those with an assessment period that began before April 7, the new rates will be applied during the next full assessment period.

Backpay for Delays

One reassuring piece of information for claimants is that backpay will be provided to those who have yet to see the rise reflected in their payments. The delay is a standard process each year, as the DWP needs time to apply the annual increases.

As a result, you will not lose out on the higher payment amounts, and the DWP has confirmed that backpay will be provided for those affected by the delay.

According to Halide Kalfaoglu, a benefits expert from Turn2us, the backpay process ensures that no one misses out on the increase, as it is typically issued at the end of the year or with the next payment after the new rates have been applied.

How Much Will Payments Rise?

The amount that Universal Credit claimants will see in their increased payments depends on individual circumstances. The 1.7% rise is applied to the standard allowance, which is the base payment you receive before any deductions are made.

These increases are added to the standard allowance before any deductions for factors like employment income, savings, or other relevant circumstances. However, since each person’s situation is different, the actual increase in payment will vary.

For example, single claimants aged 25 or over will see their standard allowance rise by £11.09 a month, while couples will see their payment increase by £16.56.

This increase will help to counter some of the rising living costs due to inflation, but it’s important to keep in mind that the rise may not cover all increased costs for households.

The Future of Universal Credit

Looking ahead, the increase in Universal Credit payments is part of a broader effort to keep the benefit system aligned with inflation and living costs. However, experts warn that the rise may not be enough to fully meet the growing financial pressures many households are facing, especially in light of inflation.

While the 1.7% rise is a step in the right direction, there are calls for further increases in the coming months to help claimants cope with rising living costs.

For now, the current increases should help many families and individuals manage their budgets and improve their financial well-being, though it remains to be seen how long these adjustments will be sufficient.

Conclusion

The upcoming 1.7% increase in Universal Credit and other DWP benefits will help many families as they navigate the challenges of rising costs. However, the delay in payments due to the DWP’s assessment period has caused some confusion.

Fortunately, the DWP has confirmed that backpay will be issued for those impacted by the delay, ensuring that everyone receives the benefit increases they are entitled to.

As we move into the new tax year, the rise in Universal Credit payments is just one of the ways the government is attempting to help claimants keep up with inflation and living expenses.

While there are calls for further increases in the future, for now, claimants can look forward to seeing the new rates reflected in their May payments.