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Wednesday, 19 October 2016

BENEFIT RISE LESS THAN THE PRICE OF A STAMP

Millions of disabled people on state benefits will get benefit rises next April that are less than the price of a first class stamp.

Their benefits will increase by 1% next April in line with the September rate of inflation measured by the Consumer Prices Index. That rise will be the first for two years because in April this year their benefits were frozen after a period when inflation was zero or negative.

But for many the April 2017 rise in their weekly benefits will be barely be enough to buy a second class stamp never mind a first class one.

More than half a million pensioners on the lower rate of attendance allowance will get an increase from £55.10 a week to £55.65. That 55p rise is just enough to buy one second class stamp. By April next year it may not even do that. Even the 880,000 who get the higher rate of £82.30 a week who will get an extra 80p will only be able to buy one 75p second class stamp for a large letter.

If their carer is under pension age they will be among 775,000 who get an increase in carer’s allowance from £62.10 to £62.70. But their rise of 60p will be 4p short of the current price of a 1st class stamp.

Younger disabled people on the lowest rate of Disability Living Allowance, 740,000 of them, will see their weekly payment rise from £21.80 to £22. They will have to save their increase for three weeks to afford one 55p second class stamp.

In some ways these groups are lucky. Millions of other face a second year of their benefit being frozen. Child benefit, Jobseeker’s Allowance, income support, housing benefit, and other working age benefits for people who are not disabled will remain frozen in April 2017. Those benefits were frozen last April and will not rise again for another three years until April 2020. And many on benefits will see a fall in their income as the latest round of cuts is applied.

The one group who will be able to afford to send parcels rather than letters are state pensioners. The will get a 2.5% rise under the triple lock which guarantees a rise by the highest of prices, earnings and 2.5%. The rise in prices was 1% (CPI) and in earnings was 2.4% (KAC3 revised). The 2.5% increase will mean the basic state pension rises by £3 a week from £119.30 to £122.30 and the new state pension will increase by £3.90 a week from £155.65 to £159.55.

Those on the means-tested pension credit will get a rise of 2.4% (£3.75 single, £5.70 couple) and those who get on the savings credit part of it will get lower increases.

More details of the April 2017 benefit changes which have now been announced

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29 November 2016