Increases to benefits in 2014
[ch 2: page 20]Benefit and tax credit increases used to be calculated using the Consumer Prices Index (CPI). The majority of working age benefits would have been due to go up by 2.7% from 6 April 2014. But in March 2013, the Welfare Benefits Up-Rating Act 2013 came into effect, limiting annual increases to these benefits to 1% for the next two years, following a 1% limit in 2013-14.
The government argues that, with public sector pay rises capped at 1%, a similar limit should apply to working-age benefits. The benefits affected are:
• Jobseeker’s Allowance;
• Employment and Support Allowance;
• Income Support;
• Elements of Housing Benefit;
• Maternity Allowance;
• Sick Pay, Maternity Pay, Paternity Pay, Adoption Pay;
• Statutory Sick Pay; and
• Couple and lone parent elements of Working Tax Credit and the child element of the Child Tax Credit.