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Employment and Welfare Benefit Changes Announced Wednesday22ND November 2023



Employment and Welfare Benefit Changes Announced on 22nd November 2023

 

Introduction

The Autumn Statement delivered in the House of Commons by the Chancellor of the Exchequer on 22 November 2023 will have an impact on tax, employment payrolls, pensions and welfare to work arrangements especially Universal Credit.

 

We cover all these issues in our training courses on Employment Law and Universal Credit etc but present below a summary of the new announcements.

 

Get in touch if you want details of any of our courses profiled at the end of this note or on our website:-

 

This note outlines changes relating to:-

  1. National Insurance

  2. National Living Wage

  3. Work Capability Assessments

  4. Universal Credit

  5. Working Age Benefits

  6. Local Housing Allowance

  7. Other Benefits -Self Employed People

  8. Local Authority Housing Funds

  9. Pensions and Pension Funds

 

 

  1. National Insurance

 

The Chancellor cut rates of National Insurance and, for businesses, made the ‘full expensing’ (100%) capital allowance scheme permanent.

 

National Insurance Contributions (NICs)

 

The rate of Class 1 NICs paid by employees will be cut from 12% to 10% from 6 January 2024. The Office for Budget Responsibility (OBR) estimates that 27.3 million employees will benefit in 2024/25.  The Chancellor said that legislation to make the change will be introduced on the day after the Autumn Statement (23 November).

 

The main rate of Class 4 NICs, paid by the self-employed, will be cut from 9% to 8% from 6 April 2024. The OBR estimates that 2.1 million people will gain from this change in 2024/25.

 

The Chancellor also removed the requirement for self-employed people with profits of at least £12,750 to pay Class 2 NICs, with effect from 6 April 2024.

 

The OBR estimates that 1.9 million people will gain from this change in 2024/25. 5 These changes to NICs are forecast to cost the Government between £9 billion and £10 billion a year over the next five years.

 

  1. National Living Wage

 

The day before the Autumn Statement, the Government announced the National Living Wage (NLW) and National Minimum Wage (NMW) rates that will come into force from April 2024.It accepted the recommendations of the Low Pay Commission.

 

The National Living Wage rate will be £11.44 from April 2024. This will apply to those aged 21 or over, after an extension of the rate to those aged 21 and 22.

 

The Government had previously set a target for the rate to reach two-thirds of median earnings in 2024. The Low Pay Commission judges that these rates will mean this target is met.  

 

  1. Work Capability Assessments

 

Changes will be made to activities and descriptors used in Work Capability Assessments for Universal Credit and Employment and Support Allowance claimants. This will save the government an estimated £1.3 billion by 2028/29; these savings are because some claimants will no longer qualify for additional amounts. Changes to the assessment will also mean some claimants are required to meet greater work-related conditions.

 

The OBR expects that the changes will raise the number of people in employment by around 10,000 by 2028/29.

 

These changes followed a consultation which the Government responded to alongside the Autumn Statement. In response “Back to Work Plan” was announced the week before the Autumn Statement.

 

 It set out that:

 

 • The Restart scheme will be expanded in 2024 to provide employment support for the long-term unemployed in England and Wales at an earlier point. People will now be eligible if they have been subject to Intensive Work Search requirements for six months, rather than nine months. The scheme will run until June 2026. It will cost £580 million in its peak year 2025/26.

 

 • Mandatory work placement and other options will be trialled and rolled out for people who are unemployed after 12 months on the Restart scheme, at a cost of up to £45 million a year.

 

 • The Universal Support scheme in England and Wales will be doubled in size, to include 100,000 people. This involves matching disabled people to job vacancies and providing funding to support them. The cost will be £160 million in its peak year of 2026/27.

 

• The Talking Therapies scheme, for treatment of mild and moderate mental health conditions (provided by NHS England), will be expanded. More people will be able to access treatment and there will be more sessions per course of treatment. The cost will rise to £220 million in 2028/29.

 

• The Individual Placement and Support scheme will be expanded. This provides intensive, individually tailored employment support to those with severe mental illness in England. The cost of the expansion is £30 million in the peak year of 2026/27. The OBR says the total cost of the scheme will be almost fully offset by reduced welfare spending.

 

 • Potential reforms to fit notes, with trial reforms to provide individuals whose health affects their ability to work with easy and rapid access to specialised work and health support.

 

  1. Universal Credit

 

As part of the plan, the Government also announced a strengthening of work search requirements for job seekers at all stages of their Universal Credit claim, and toughening the application of sanctions for those who fail to comply with them. New tools will enable Department of Work and Pensions (DWP) work coaches to track claimants’ attendance at job fairs and interviews. Claimants who continually refuse to engage with their Jobcentre or take work offered to them will face having their Universal Credit claim closed, with the loss of linked (passported) benefits such as free prescriptions.

 

The surplus earnings threshold for Universal Credit claimants in Great Britain will stay at £2,500 for a further year until April 2025. If someone earns more than the amount at which Universal Credit is paid plus this threshold level, their future Universal Credit payments will be reduced. The intention has been for this threshold level to be temporary and to eventually reduce it to £300, but the temporary period at this level has been extended repeatedly. The extension of this will cost £155 million in 2024/25.

 

  1. Working age benefits and pensions

 

Working-age benefits will increase by 6.7% in April 2024. This is based on consumer prices index (CPI) inflation in the year to September 2023, in line with standard practice. State Pensions and the Pension Credit standard minimum guarantee will increase by 8.5% in April 2024. This is based on average earnings growth, which was higher than the other elements of the State Pension triple lock (CPI inflation and 2.5%).

 

  1. Local Housing Allowance

 

Local Housing Allowance (LHA) rates will be increased to equal the 30th percentile of an area’s market rents in 2024/25 – in other words the level at which 30% of rents are lower, and the rest higher. Rates will then be frozen in cash terms in subsequent years. The cost of this change will rise to £1.7 billion in 2028/29. LHA rates were last set at the 30th percentile of local rents in April 2020 but were then frozen, leading to shortfalls between market rents and support in most areas.

 

  1. Other benefit changes for Self Employed People

 

Changes for self-employed people who care for children The Minimum Income Floor will increase for self-employed lead carers of children aged 3 to 12 years in Great Britain. This affects some self-employed claimants of Universal Credit. In calculating how much they receive, they are treated as if they earn the National Minimum Wage for the number of hours per week they are expected to work, even if they earn less than this. The change is linked to a new requirement – announced at the 2023 Spring Budget and implemented from 25 October 2023 – for these carers to undertake work search and work preparation activity for more hours per week. The increase in the Minimum Income Floor will save the government £80 million a year from 2026/27.

 

  1. Local Authority Housing Fund

 

There will be a third round of the Local Authority Housing Fund at a cost of £450 million. There will be 2,400 new housing units including to house Afghan refugees and provide temporary accommodation. Affordable Homes Guarantee Scheme The Affordable Homes Guarantee Scheme will be expanding by a further £3 billion. This allows housing associations to access cheaper loans. Planning Announcements include:

 

• plans for accelerated planning decision dates for major developments in England to be guaranteed in exchange for a fee

 • a consultation on a new permitted development right to enable one house to be converted into two flats.

 

  1. Pensions and pensions funds

 

The Government has announced a package of reforms relating to pensions focusing on three themes:

• Providing better outcomes for savers, for example by encouraging the consolidation of pension pots

 • Driving a more consolidated pensions market

 • Enabling pension funds to invest in a diverse portfolio, for example through a new fund within the British Business Bank (BBB).

 

  

QED Training Courses

Our specialist technical and legal topics include: -

 

Technical Portfolio

·      Bribery Act

·      Care Act

·      Charities Act and Corporate Governance- Updated in 2023

·      Employment Law- Updated in 2023

·      Equality Act – Updated in 2023

·      Equality Impact Assessments

·      Data Protection & General Data Protection Regulation (GDPR) Updated

       post Brexit

·      Defensible Documentation

·      Domestic Abuse Act

·      Disclosure Barring Service -DBS

·      Looking after vulnerable customers of the finance industry-Pilot in 2021

·      Making misleading claims about positive environmental impacts of

       goods, services, and activities

·      Mental Health Acts- Changes imminent in law

·      Modern Slavery Act- Changes imminent in law

·      Neuro Diversity -Legal but see also Personal Development Section

       below.

·      Privacy and Electronic Regulations-Updated post Brexit

·      Privacy Impact Assessments

·      Prevent Duty-Counter Terrorism Laws

·      Safeguarding

·      Social Media and Employment Law-Updated with Online Safety Bill

       pending

·      Volunteers and the Law

·      Welfare Benefits – Updated with Universal Credit and Personal

       Independence Payment (PIP) changes brought about by parliament

       and case law

 

and

 

 Personal Development Portfolio

·      Active Citizenship

·      Advocacy

·      Communication Skills

·      Cultural Awareness and Cultural Communication

·      Customer Care

·      Equality and Diversity

·      Facilitation Skills

·      Influencing Skills

·      Job Search Skills

·      Mentoring

·      Modern Employee representatives

·      Neuro Diversity-Personal Awareness and Ways of Working

·      Organising Events

·      Peer Support Groups

·      Public Speaking and Presentations

·      Time Management

·      Train the Trainer!





 

 
 
 

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