The cost-of-living crisis has affected all of us but, for the many people who rely on the support provided by the food banks and community groups to which we deliver, making ends meet has been particularly challenging.
Research by the Trussell Trust has shown that the most significant cause of the financial insecurity that drives the need for food banks, is the design and delivery of the social security system. With 4 in 5 food bank users in receipt of some form of state support, what might be the impact for them of benefit changes announced in the Autumn Statement?
Many will welcome the Chancellor’s announcement on Wednesday that benefits for 2024-25 will rise, although there will be stricter sanctions for claimants who don’t look for work.
Universal Credit and other benefits to rise by 6.7%
Benefits for working-aged people will increase by 6.7% from April 2024, in line with September’s inflation rate. This will include Universal Credit (UC), means-tested benefits such as Personal Independence Payment (PIP) and Employment and Support Allowance (ESA).
State Pension increased by 8.5%
The so-called triple lock, about which there had been pre-statement speculation that it may change, remains in place, with the announcement of an increase by 8.5%.
- For anyone reaching state pension age before April 2016, their full weekly basic state pension will rise from £156.20 to £169.50.
- For anyone on the full new state pension, from April 2024 their weekly payment will rise from £203.85 to £221.20.
- Compared to 2023-24, over a year, a single person will receive £690 more and couples £1,104. People in receipt of the new state pension will get up to £902 more.
Changes to the Local Housing Allowance
The Local Housing Allowance (LHA), which differs depending on where claimants live and according to the number of people in a household, is used to calculate the rate of Housing Benefit (HB), or the housing element of UC for which tenants are eligible.
Bringing an end to the freeze on rates in place since 2020, the Chancellor announced that, from April 2024, although only until April 2025, there will be an increase in LHA to the 30th percentile of local rents. Effectively this means that, for recipients of HB, or the housing element of UC, they will be able to afford the cheapest 30% of homes, linked to the size of their household and to the rates in the area in which they live.
Changes to benefit assessments
The Chancellor announced changes to work capability assessments (WCAs), which will now consider if people are able to work from home, the intent being to lower the number of people accepted for disability benefits.
Assessments will consider the impact that a claimant’s physical and mental health has on their ability to work. For people who an assessor thinks capable of doing physical work, they will then automatically be considered a job seeker and required to prove they are actively looking for work.
Although better employment support for people living with physical, mental ill health or disability, but who are ready to return to work, is viewed as a good investment, there are concerns by some organisations that the changes announced could herald the imposition of unnecessarily punitive sanctions.
After a year without finding a job, for example, people claiming UC will face a mandatory work placement to ‘increase their skills and improve employability’. For anyone facing an ‘open-ended sanction’ for more than six months, benefits will be stopped entirely, and their case closed, leading to a loss of entitlement to free NHS prescriptions and legal aid.
Today’s announcement of an increase in benefits in line with inflation and an end to the freeze on LHA will undoubtedly ease some of the pressures driving millions of people to food banks. For some, however, the impact of unnecessarily harsh sanctions, which many charities and campaigners fear, will be less welcome.