MILLIONS on benefits will be pushed into deeper poverty if their payments are not increased to match inflation next year.
Soaring energy, food and petrol costs mean 10million people, including the low-paid and those with disabilities, face a real-terms cut to their income unless benefits rise.
5Single mum Sarah does not know how she’ll keep her two-bedroom flat warm this winterCredit: Damien McFadden
5Millions on benefits will be pushed into deeper poverty if their payments are not increased to match inflation next yearCredit: Getty
Sun Money looks at what effect this will have on worried readers.
How many households does it hit?
Millions on Universal Credit — an estimated 40 per cent — are in work, while others receive benefits temporarily because they’ve lost their job or exited a dangerous relationship or household situation.
Four million people rely on welfare payments because of a long-term illness or disability.
For many years benefits have been raised each April in line with the Consumer Prices Index measure of inflation from the previous September.
But the Government has yet to confirm whether it will do so this year.
It is weighing up whether to raise benefits in line with wages instead, which would likely mean a much lower rise of 5.5 per cent instead of about nine per cent.
Former Prime Minister Gordon Brown estimates this would leave struggling families £40 a week worse off, or £2,000 a year.
Charities warn that affected households will struggle to heat their homes and will not be able to afford meals.
Benefits are already lagging a long way behind runaway living costs, leaving many facing a shortfall.
When they were last increased in April, it was based on the previous September’s figure of 3.1 per cent, but at the time inflation was running three times higher.
Imran Hussain, director of policy at the charity Action for Children, says: “Families face a desperate triple whammy of rising food, fuel and housing costs.
“Many of the parents we see are already skipping meals, keeping the heating off and cutting back on basics.”
What does it mean in real terms?
It’s not yet known exactly how the Government would calculate the benefits rise if it decides to link it to wages instead of inflation.
But it’s thought ministers could use the figure of 5.5 per cent because this is the average increase in total earnings from May-July 2022 that was released by officials last week.
If it does so, those on benefits will still see an increase in the amount of money they receive.
But in real terms they will feel a whole lot worse off because rocketing costs mean they’ll be able to buy less with their money.
What happens if benefits only rise by 5.5 per cent?
Based just on the standard allowance of Universal Credit, a single person over 25 would be £15 worse off per month and £180 worse off per year.
This is because their standard monthly allowance would increase from £335 now to £353, instead of £368 to stay in line with inflation.
A couple over 25 with children currently get £1,015 a month.
They would be £44 worse off per month, or £528 per year.
But the real impact will be much greater as lots of other vital top-up payments are affected.
Some elements, such as housing benefit, do not rise in line with inflation so it is difficult to give a true picture.
Charities warn that this will push people deeper into poverty, making them less likely to come off benefits in the future and putting more pressure on already stretched welfare services.
Imran Hussain adds: “It’s only fair that when essential living costs rise, benefit rates must keep pace in order to stop more of the low paid, the disabled and children from being pushed below the breadline.”
What impact will it have on disabled people?
The Freitas family are among millions facing higher cost increases than the average household.
Half of disabled people say they are concerned about affording food over the next six months, the charity Scope warned.
James Taylor, of Scope, said: “Not uprating benefits in line with inflation will have severe consequences. Cutting them in the current circumstances would be indefensible. Energy costs have doubled in a year.
“We’ve been inundated with calls from disabled people who have cut back everything they can. They’re taking drastic actions like skipping meals, cutting back on washing and turning off fridges, and it’s still not enough.”
Sarah Baffoe – Teaching assistant
5Sarah, pictured with daughter Bliss, says: ‘I don’t know how I’ll be able to pay for heating Universal Credit does not increase in line with inflation’Credit: Damien McFadden
Benefits: £1,003 a month Rent: £1,300 a month
Energy bill rise: £320 a year
SINGLE mum Sarah does not know how she’ll keep her two-bedroom flat warm this winter.
Sarah, 53, who lives with daughter Bliss, 13, in Barnet, North London, says: “I don’t know how I’ll be able to pay for heating Universal Credit does not increase in line with inflation.
“I just managed to get out of debt in March. I can’t go back there again. I was so stressed, as the council and landlord were chasing me and sending letters.
“There’s only me to cover all our bills and my daughter’s costs. She needs clothes and food but I can’t afford after-school clubs.
“I work as hard as I can but there’s just not enough money. It’s difficult to afford meals. I looked into a food bank but can’t use it as it’s always closed by the time I finish work.”
Charity Christians Against Poverty helped Sarah get on top of her debts. Now she tries to save wherever she can, only buying cheap food and being careful with energy.
She earns £13,000 a year before tax, working 28 hours a week while her daughter is at school, and gets £1,003 per month in Universal Credit, including the housing element.
Her rent is £1,300 a month and her energy bills are set to climb by £320 to £1,400 a year.
Benefits facing real-terms cut
Income-based Jobseeker’s Allowance
Income-related Employment and Support Allowance
Tax Credits (Child Tax Credit and Working Tax Credit)
Council Tax Support
Social Fund (Sure Start Maternity Grant, Funeral Payment, Cold Weather Payment)
Personal Independence Payment
The Disability Living Allowance
Employment Support Allowance
Lauren Freitas – Full-time carer
5Lauren and Mauricio Freitas say they need help to cope with the £3,600-a-year energy bills they face because of their son Cohen’s disabilityCredit: Hyde News & Pictures
5Lauren cares full-time for Cohen, 6, and says: ‘Everything he needs to keep him alive uses electricity’Credit: Hyde News & Pictures
Earnings: £20,400 a year
Benefits: £1,880 a month
Rent: £700 a month
Energy bill rise: £1,920 a year
LAUREN and Mauricio Freitas say they need help to cope with the £3,600-a-year energy bills they face because of their son’s disability.
Lauren, 35, cares full-time for Cohen, six, and says: “Everything he needs to keep him alive uses electricity.”
Cohen, six, has two rare genetic conditions so can’t walk or talk and is fed by pump.
He needs a drain for his stomach, and hoists and a stairlift.
The washing machine is on constantly to clean his clothes and sheets, as he has bowel issues.
The family’s petrol costs have also doubled, as Lauren drives Cohen to school and respite centres.
But their benefits will likely be frozen.
Lauren and Mauricio, of Basingstoke, Hants, also have sons Malakye, 17, and Tyio, 14.
Mauricio works part-time in a warehouse.
Lauren says: “He tried full-time but was running himself into the ground. He comes home at 2am, is with Cohen until 6am, then we swap shifts.”
The family’s energy bills are set to hit £300 a month, so £3,600-a-year.
Lauren says: “Just talking about it makes my heart beat faster.”
They get Universal Credit of £1,227 and £350 a month in Disability Living Allowance, plus a carer’s allowance of £303 a month.
Rent on their council house is £700 a month. Mauricio earns £1,700 a month after tax.