LRD guides and handbook March 2014

State benefits and tax credits 2014

Chapter 2

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.