★★★★★

Rated Excellent

UK Property Finance

New Universal Credit AET Threshold Could Affect 114,000 Claimants

by | Sep 19, 2022 | Other Finance News | 0 comments

Amendments to the universal credit rules introduced this month could see many thousands forced to boost their income or find work to retain their benefit payments.

Current estimates indicate that around six million people in the UK are currently claiming universal credit, as the escalating living-cost crisis threatens millions with the looming risk of fuel poverty.

Within universal credit legislation, the administration earnings threshold (AET) means that claimants who earn nothing or have earnings below a specific threshold are automatically added to the intensive work search regime. Those concerned are required to attend regular face-to-face meetings for job search purposes and are placed under extensive pressure to apply for jobs.

By contrast, claimants who earn in excess of the AET threshold are bracketed in a “light-touch” category, where payments are received alongside their employment and there is little to no immediate pressure to seek higher-paying jobs.

On September 26, the current AET threshold of £355 per month will increase to £494 per month, almost £150 higher. Likewise, the AET for couples claiming together will increase from £567 to £782.

Early indications suggest that approximately 114,000 people will subsequently fall below this new AET threshold and will be subject to the same strict rules and regulations in relation to finding work. If these rules and regulations are not satisfied, AET payments may be withdrawn entirely.

Work and Pensions Secretary Thérèse Coffey was quoted by the Liverpool Echo as having said that the alterations to the regulations will “help claimants get quickly back into the world of work while helping ensure employers get the people they and the economy need.”

Elsewhere, a spokesperson from the DWP said that the AET rule was long overdue and needed an important update.

Since its introduction in 2013, the AET has not kept pace with the increases in the National Living Wage, with the result that the number of hours needed to work to earn the AET has fallen over time,” read an extract from the statement.

“The adjustment will bring the AET back to its original ‘parity’ with the National Living Wage.”

Claimants who are affected by the new AET threshold will be automatically transitioned to the more intensive work search regime. This means being required to attend mandatory work search reviews at a local job centre, which take place either on a weekly or monthly basis.

Evidence will need to be provided at such meetings that the claimant in question is actively looking for work and spending at least 35 hours a week engaged in work-related activities. However, those with caring responsibilities or health conditions will be subject to different rules.

The DWP has stated that it will be contacting those affected by the changes directly.

 

Recent Posts

Key Housing Market Predictions for 2025

As we step into 2025, the UK housing market is poised for notable changes, particularly concerning mortgage rates. Recent analysis suggests a favourable shift for prospective homeowners and investors. Projected decline in mortgage rates The consumer body Which?...

How a Secured Loan Calculator Can Help You Make Smarter Financial Decisions

When contemplating a secured loan, the financial risks can be significant. Whether you're planning a home renovation, consolidating debt, or purchasing a vehicle, understanding your borrowing power and repayment terms is crucial. A secured loan calculator is a...

What is the Normal Completion Time for a House Sale, and Can Bridging Finance Speed It Up?

When buying or selling a property, one of the key milestones is the completion date, the day when the sale is finalised and ownership is transferred. However, many people are unsure about the typical completion time for a house sale and how they can potentially speed...

UK House Prices Rise to a New All-Time High as Mortgage Rates Fall

The average London price increased 3.5% to £543,308, its highest since November 2022, when it was £545,568. Falling mortgage rates have driven house prices to a new all-time high, according to fresh data from big lender Halifax released today. The average price of a...

House Prices to Rise in 2025 as Buyers Could Get Bigger Mortgages

One mortgage provider predicts that house prices might climb dramatically next year since declining interest rates will increase buyers' borrowing capacity. Based on latest data from the Office for National Statistics, MPowered Mortgages projects a significant...

NatWest Increases Rates, Surpassing a Key Benchmark

The news arrives as average rates for two- and five-year mortgages begin to rise. For the first time in three months, the average rates for the two most popular loan terms have gone up. The average rate for a two-year mortgage increased from 5.36% to 5.37% since last...

Top Questions to Ask Your Bridging Loan Lender Before Signing the Deal

Bridging loans provide fast access to funds when you’re purchasing a property, making renovations, or managing short-term cash flow issues. Before committing to one, it’s crucial to understand exactly what you’re signing up for. To ensure you make a well-informed...

Martin Lewis: A Trusted Financial Voice, But It Takes a Toll

Martin Lewis is dedicated to empowering people to take control of their finances and make their money work harder. Unlike many financial experts, he avoids assuming his audience has extensive financial knowledge. Instead, he communicates in clear, simple terms and...

Where to Find Bridging Loan Advice Online

When it comes to financing property purchases, bridging loans can be a valuable solution. Whether you’re buying a new home before selling your old one or need quick access to funds for an investment property, bridging loans offer short-term financial help. But knowing...

Homebuyers Feel The Property Market is Too Competitive.

According to Market Financial Solutions’ latest research, people who are looking to purchase homes are urging the government to take action on the highly competitive and stressful nature of the UK housing market. The speciality lender commissioned an independent poll...

Categories