Universal Credit rule changes: what it could mean for YOUR payments

New Universal Credit rules mean those claiming the benefit will now have to look for more work if they do not meet higher income thresholds.

Claimants could be forced to look for more work and lose some or all of their Universal Credit payments if they earn less than £892 a month, the equivalent of working 18 hours at the national living wage.

This is because the Department for Work and Pensions has increased the administrative earnings threshold, which was previously set at £743 per month or the equivalent of 15 hours per week.

The DWP claims the rule change will see 180,000 people work longer hours, as the Government seeks to tackle “sick note culture” and remove welfare as a “lifestyle choice”.

Prime Minister Rishi Sunak said yesterday: “Today’s changes will help more people on Universal Credit get into well-paid jobs and move towards financial independence, which is better for them and better for economic growth.”

He added: “Wellness should always be a safety net and not a lifestyle choice.”

We explain the rules in detail and what they might mean for you.

How much do I need to earn?

Under the new AET, people claiming Universal Credit who earn less than £892 a month will need to increase their job search activity.

Previously, those on Universal Credit only had to earn £743 each month to be placed in a “light touch” work group, where they only received some support from job coaches.

For couples, you will now need to work a combined 29 hours and earn a minimum of £1,427 per month. This compares to £1,189 under the previous rules.

Both members of a couple will have to prove that they are looking for work if their individual and combined income is below the threshold.

Under the National Living Wage, the threshold for single people is equivalent to 18 hours of work, but those earning above the National Living Wage can work for a shorter period if they meet the AET threshold.

In 2022, the threshold was just nine hours for a single person.

What happens if I earn less than the threshold?

Those above the £892 threshold will not have to prove they are looking for further work.

But those who earn less will be included in the “intensive job search” program, which means they will have to demonstrate that they are looking for more or better paying work.

Those in the “intensive” group will also be expected to meet regularly with job coaches, who will provide them with “one-on-one” job search support, interview skills and connecting with employers, according to the DWP.

What are the sanctions?

People who do not meet these requirements, such as meeting regularly with their employment advisor, can expect to have their Universal Credit sanctioned and their payments reduced for up to six months.

Work and Pensions Secretary Mel Stride said: “We will always back those who want to work hard… we are radically expanding the support available to help people get ahead in work.”

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He said: “With the next generation of welfare reforms, I want to help thousands of people on their journey off welfare and towards financial independence.”

The reform is part of a series of other changes announced last month under the Government’s new £2.5bn ‘Back to Work Plan’.

According to the Government, it aims to get 1.1 million people with disabilities or health problems back to work, and Sunak has pledged to make it harder to get sick leave.

“We don’t just need to change sick leave, we need to change the culture of sick leave so that the default is work that can be done, not work that can’t be done,” the Prime Minister said in April.

As well as the AET increase, Rishi Sunak announced changes to the work capability assessment process, as well as suspending benefits for people who do not take a job after 12 months.