More than 120,000 working people on Universal Credit across Great Britain will receive a job support boost this spring to boost their earnings. This will help families to improve their prospects and boost economic growth in the UK through the labour market.
The Administrative Earnings Threshold (AET) determines which group a Universal Credit claimant is placed in based on how much they earn. This in turn impacts the level of support they receive to find work and develop a career, and the types of activities they must undertake, such as searching for opportunities to take up more or better paid work or researching new career options.
From the end of February, an increase to the threshold will mean more Universal Credit claimants will be moved from the ‘Light Touch’ group to the ‘Intensive Work Search’ group, helping them to get better-paid work and boost their long-term prospects. Combined with a previous increase in September, this will mean around a quarter of a million more people will have been moved into ‘Intensive Work Search’.
New claimant commitments will be tailored to individual circumstances and will consider caring responsibilities and any health conditions.
Secretary of State for Work and Pensions, Mel Stride MP said:
A hallmark of a compassionate society is giving those on low incomes the tools to progress and earn more. It is important that we continue to deliver targeted support so that those in work have access to the expertise and guidance of our dedicated work coaches.
By raising the Administrative Earnings Threshold, we are forging a robust labour market building on positive changes we have already made and supporting even more people to progress in the workplace.
Additional claimants will benefit from more face-to-face time with a work coach, allowing them to access opportunities to increase their earnings, whether that is developing their skills, progressing in their current sector, or by starting a new role.
The new AET is the equivalent of an individual working 15 hours per week, or a couple working 24 hours per week between them, at the adult National Living Wage rate.
This year, the Government will also be driving forward an agenda to ensure the labour market remains robust, reviewing workforce participation at pace to understand what action can be taken to drive down economic inactivity.
In 2021 the Universal Credit taper rate was reduced from 63% to 55% and the Work Allowance was increased by £500 per year so claimants can keep more of what they earn. The National Living Wage is also increasing by 9.7%, bringing it to £10.42 an hour from April.
This rise to the AET will build on this work to ensure work pays and will be complemented by a new In Work Progression offer which will be rolled out to all Jobcentres by the end of March, focused on helping claimants in the ‘Light Touch’ work group to progress.
People impacted by the change will be contacted with more details via their Universal Credit journal. Claimants will receive this journal message at the end of their first full assessment period after Sunday 26 February.
