How the 2024 Autumn Budget affects DWP payments

Rachel Reeves has announced a range of changes to Universal Credit, the state pension and the benefits system in her Autumn Budget today.

Let’s take a look at what the Chancellor laid out in her address and how it will affect pensioners and those receiving benefits.

Follow the latest updates on the Autumn 2024 Budget on our live blog

PIP payment changes

PIP benefits, issued by the Department for Work and Pensions (DWP), are for people who need help with costs associated with their health condition or disability.

It falls into two components – daily living and mobility – which offers up to £470 and £328 a month respectively.

This year’s budget could see the amount of those eligible for PIP payments decrease, but changes won’t likely be enforced until 2025.

Until then, payments are likely to increase in line with inflation rates.

Winter fuel payments

Reeves has been criticised for cuts to the winter fuel allowance, but there’s a small chance she could reverse the cuts.

Today in the Commons, Conservative former minister Dame Harriett Baldwin said: ‘The living standards of a 90-year-old pensioner on a £13,500 income are falling sharply this winter, as a result of her decision to take away the winter fuel allowance.

‘She has the chance to increase that threshold, will she take it?’

It remains unlikely that Reeves will reverse the cuts to the Winter fuel payment scheme.

The Winter Fuel Payment is intended to help people (who are eligible) to stay on top of heating costs during the winter.

It used to be given to every pensioner in the country, but beginning this year, it’s only those who receive pension credit.

In September, MPs voted to cut the payment, citing the need to help fill a £22 billion ‘black hole’ in the country’s finances, discovered after the election.

Universal credit changes

The Chancellor announced in her Budget that the government will introduce a new Fair Repayment Rate to protect households on Universal Credit in debt.

The new policy will reduce the level of debt repayments that can be taken from a household’s Universal Credit payment each month from 25% to 15% of their standard allowance.

Reeves said that this those affected will gain £420 a year by the change and that 1.2 million of the poorest households will keep more money each month.

Benefit and state pension rises

Reeves confirmed that the basic and new State Pension will be uprated by 4.1% in the next financial year as the State Pension is forecast to rise by over £31bn by 2029-30.

This will mean that 12 million pensioners will gain up to £470 next year.

Currently, the state pension is £221.20 a week (£11,502 a year) for those who reached state pension age after April 2016, and £169.50 a week (£8,814 a year) for those who reached state pension age before April 2016.

Reeves also announced a new crackdown on fraud in the welfare system, which she said will save £4.3bn a year by the end of the forecast.

The Chancellor said: ‘We will expand DWP’s counter-fraud teams, using innovative new methods to prevent illegal activity and provide new legal powers to crackdown on fraudsters – including direct access to bank accounts to recover debt..’

Get in touch with our news team by emailing us at webnews@metro.co.uk.

For more stories like this, check our news page.