Universal credit changes affecting 180k part-time workers from today, explained

A major change to universal credit comes into effect today which could require around 180,000 people currently claiming benefits to start looking for work.

It comes as part of Prime Minister Rishi Sunak’s pledge to end the “sick note culture” in the UK so that the “default becomes what work you can do, not what you can’t”.

The Government has stated it makes “no apologies” for encouraging more people off universal credit and into work as there are more than 900,000 job vacancies in the economy.

Work and Pensions Secretary Mel Stride also said the new changes to universal credit thresholds were “radically expanding the support available to help people progress in work”.

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

What are the universal credit changes?

From 13 May 2024, the Administrative Earnings Threshold (AET) will rise from 15 to 18 hours a week at the National Living Wage from 13 May.

This means that part-time employees claiming universal credit and working less than 18 hours a week and earning less than £892 per month, or 29 hours a week and £1,437 for couples, will have to increase their work search.

There are several different “work groups” that universal credit claimants are placed into under AET which determines the level of benefits they receive.

Those working above the new 18-hour threshold are placed in the “light touch” work group, which means you’re not required to look for work.

If somebody earns below this level, however, they will be put in the “intensive work search” group and are required to meet more regularly with their work coaches to prove they are seeking work.

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But if you earn below the AET rate, you will be in the “intensive work search” and will be forced to look for more work to keep your benefits.

Those affected by the change will be contacted by the Department for Work and Pensions (DWP) and advised of what they need to do.

People placed in the “intensive work search” group may be required to prove what steps they are taking such as registering with an employment agency, making job applications or undertaking other steps which reasonably increase the likelihood of obtaining employment.

If you fail to meet your universal credit commitments, your benefits can be cut or stopped altogether. Those who are unable to work due to long-term sickness or a disability are exempt from sanctions.

This is the second increase to the AET this year after the threshold was raised from 12 hours to 15 hours in January.

Why are universal credit thresholds changing?

Last month, the Prime Minister made a speech announcing major reforms to the welfare system in a drive to boost the number of people in work.

He warned that the benefit bill would soar in the coming years without action, and said that it was only “fair” those who could work were made to do so.

Ahead of the change to the AET, Mr Sunak said: “Welfare should always be a safety net and not a lifestyle choice, which is why we’re ushering in a new era of welfare reforms to help more people progress off benefits and into work.

“Today’s changes will help more people on universal credit move into well paid jobs and progress towards financial independence – which is better for them and for economic growth.”

The Government claims that the latest changes to AET combined with the last rise in January will lead to around 400,000 more people actively seeking work.

It is part of a range of reforms ministers are pursuing as part of the new £2.5bn Back to Work Plan, which is aimed at helping more than a million people back into work.

Alongside changes to universal credit thresholds, the Government has also said it will speed up the process of moving people from older so-called legacy benefits.

Changes are being made to the work capability assessment (WCA) process, which considers whether a person is fit for work or not, with the aim of ultimately replacing it.

A consultation was launched in April to overhaul the personal independence payment (PIP) system end the current “one-size-fits-all” approach of the benefit and replace it with a more “tailored” approach that focuses more on individual needs.