The Department for Work and Pensions (DWP) has changed the Universal Credit rules in a move that it says will affect more than 180,000 claimants.
The Administrative Earnings Threshold (AET) determines the extent of conditions that someone on Universal Credit might have attached to their benefits. The AET acts as a dividing line; those above the threshold fall within the ‘light touch’ regime, and those below it go into the ‘intensive work search’ regime.
The AET assumes a person earns the minimum wage. Up until now, a Universal Credit claimant had to work 15 hours per week on the minimum wage, earning about £743 per month, to avoid falling into the ‘intensive work search’ category.
But from today (13 May), the AET is £892, which is what you would earn in a month if you worked for 18 hours per week at the minimum wage. This means benefit claimants earning less than this will need to work more or find better paid work to avoid having extra conditions attached to their benefit payments.
If a couple is earning less than £1,437 between them, they will be expected to try to increase their earnings.
Why Life Insurance Still Matters – Even During a Cost-of-Living Crisis
Sponsored by Post Office
Someone earning more than the minimum wage per hour can work fewer hours, as long as their total earnings meet the AET.
Those who don’t meet the AET will move into an ‘intensive work search’ group, which involves more meetings with a work coach and being asked to look for more, or better paid, work. Those who fail to do this risk losing their benefits.
The new rule is part of broader reforms to the welfare system that the Government announced last month.
Prime Minister Rishi Sunak said the changes to the minimum hours requirement would help people on Universal Credit “progress towards financial independence, which is better for them and for economic growth”.
Adjustments exacerbate ‘financial insecurity and mental stress’
Michael Clarke, spokesperson for charity Turn2Us, said: “These changes severely challenge those managing jobs with irregular or fluctuating incomes and carefully balanced responsibilities like childcare.
“The system fails to accommodate the reality of those on the financial edge. For single mothers and others on razor-thin margins, these adjustments risk tipping them into crisis, exacerbating financial insecurity and mental stress as they struggle to meet the new demands. It’s vital that the support system truly supports, rather than penalises, those it’s meant to help.
“We recommend using the Turn2us Benefits Calculator to see how these changes will affect you.”
Related: Two-thirds of UK adults find benefits eligibility confusing
