National Living Wage and Welfare

PRC 146368069

Publishing the Low Pay Commission’s 2020 Remit – Alongside the Budget, the government has published its remit to the Low Pay Commission (LPC) for 2020. Confirming the government’s ambitious target, the remit asks the LPC to make recommendations with the view of reaching a National Living Wage (NLW) of two-thirds of median earnings by 2024, provided economic conditions allow. Following recommendations made by the LPC, the NLW will apply to workers aged 23 and over in April 2021, with a target for it to apply to workers aged 21 and over by 2024.

Carers’ leave – The government will shortly consult on the design of Carers’ Leave: a new in-work entitlement for employees with unpaid caring responsibilities, such as for a family member or dependents. This will support hardworking people to balance their caring responsibilities with work, particularly women who disproportionately undertake unpaid caring activities.

Neonatal leave and pay – The Budget announces a new entitlement to neonatal leave and pay for employees whose babies spend an extended period of time in neonatal care. (20)

Personal Independence Payment reassessments – The government will reduce the frequency of health assessments required for people receiving Personal Independence Payment (PIP). For those whose condition is unlikely to change, the Budget sets a minimum award review length of 18 months. (19)

Increase in the repayment period for Universal Credit advances and reduction in the maximum debt deduction cap on the Universal Credit standard allowance – From October 2021, the period over which Universal Credit advances will be recovered will increase to 24 months, while the maximum rate at which deductions can be made from a Universal Credit award will reduce from 30% to 25% of the standard allowance.

Enhancing Housing Benefit compliance – The Budget provides further investment of up to £12 million per year in local authority resource to maximise their capacity to tackle Housing Benefit fraud and error. (61)

Universal Credit to Pension Credit transition – The Budget confirms funding for an operational change to ensure claimants do not experience a gap in their benefit entitlement when moving from Universal Credit to Pension Credit. (75)

Universal Credit: transitional protection for former Severe Disability Premium (SDP) claimants – The government is confirming funding for increasing the rate of transitional payments for claimants in receipt of Severe Disability Premium when they move to Universal Credit. (76)

Universal Credit rollout – The implementation schedule of Universal Credit has been updated to ensure its safe delivery. The government expects rollout to complete by September 2024.

Universal Credit: surplus earnings – The Budget confirms funding for a delay to the reduction of the Universal Credit surplus earnings threshold, so that only large income spikes above £2,500 will be taken into account. The threshold will be reduced to £300 in April 2021. (74)

Changes to the duration of high level sanctions – The government is removing the 3-year sanction from Universal Credit and Jobseeker’s Allowance. This will bring high-level sanctions to 13 weeks for the first failure to comply with conditionality or work search requirements and 26 weeks for each subsequent failure, making 26 weeks the duration of the longest single sanction in Universal Credit and Jobseeker’s Allowance.

Supporting families with school-aged children through Tax-Free Childcare (TFC) – The government is announcing a service improvement that will make TFC compatible with school payment agents. This will allow parents of up to 500,000 school-aged children across the UK to access TFC and use it towards the cost of their wraparound childcare.

Migrants’ access to benefits – The government is aligning EEA migrants’ access to non-contributory benefits with non-EEA nationals. This will apply to EEA migrants arriving in the UK under the new immigration system, from January 2021. (72)

Stop export of Child Benefit – The government is stopping the export of Child Benefit payments made in respect of children living overseas. This will apply to EEA migrants arriving in the UK under the new immigration system, from January 2021. (73)

Porting of Support for Mortgage Interest (SMI) loans – As announced in June 2019, the government will amend the SMI loan regulations to allow recipients moving home to transfer their existing loan to their new property.

Extending Shared Accommodation Rate (SAR) exemptions – The government is introducing exemptions from the SAR for claimants of Universal Credit and Housing Benefit covering rough sleepers aged 16-24, care leavers up to the age of 25, and victims of domestic abuse and human trafficking. (21)

Extension to Civil Partnerships: State Pension – The Civil Partnerships (Opposite-sex Couples) Regulations 2019 give opposite-sex couples the choice of entering into marriage or civil partnership. The Budget provides funding which ensures individuals can derive or inherit a State Pension from an opposite-sex civil partner.

Devolution of welfare benefits to the Scottish Government – As set out in the Scotland Act 2016, the government is devolving a number of disability benefits to the Scottish government, including Personal Independence Payment, Disability Living Allowance, Attendance Allowance, Industrial Injuries Disablement Allowance and Severe Disablement Allowance.