Ministers confirmed today that the Government would stand by its commitment to protect pensioner incomes and have also ensured that key support for disabled people would go up by 2.2% for next year.
The ‘triple lock’ - a key coalition agreement - will be used for the first time to increase the basic State Pension next year at an above inflation 2.5% to £110.15 a week.
Ministers also confirmed that the main rates of the majority of working age benefits would be increased by 1% for the next three years. This move will help ensure that expenditure on benefits does not continue to increase unsustainably.
Minister for Pensions Steve Webb said:
I am proud we’ve stood by our commitment to improve the State Pension, and as a result, it is now the highest share of average earnings in over 20 years.
Despite these difficult economic times, we’ve also protected the incomes of disabled people and are still able to help people relying on working age benefits.
A new Bill will be introduced as soon as possible to enable the Government to implement the 1% in 2014/15 and 2015/16.
At the Emergency Budget in June 2010, the Government announced that from 2013, Local Housing Allowance (LHA) rates would be calculated annually by using the lower of the rent at the 30th percentile of local rents or the previous year’s rate up-rated by reference to CPI, thereby ending the monthly up-rating of LHA rates and bringing the system into line with the up-rating of other pensions and benefits. As part of the preparation for this change, the Government fixed LHA rates from April 2012, to establish a baseline from which they could be up-rated in future.
From April 2013, LHA rates will be set at the lower of the 30th percentile of local rents or the April 2012 rate increased by 2.2 per cent.
In 2014-15 and 2015-16, increases to LHA will be limited to 1%, in line with proposals for working-age discretionary benefits more generally. This will help maintain Housing Benefit expenditure at a reasonable level, and will make an essential contribution to the Government’s fiscal strategy.
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