Changes to Benefits in the UK in 2023

To adjust the payments made to the level of inflation, changes have been introduced to benefits in the UK, which take effect as early as 2023. This means that anyone in the United Kingdom receiving one or more of the benefits covered by the increase, or applying for one, will receive higher amounts of financial support.

Importantly, the higher benefits will be paid automatically - there is no need to take any extra steps or submit applications for the new rates to be applied. It is nonetheless worth familiarising yourself with all the significant changes, as this allows you to realistically assess how much you can expect and plan your household budget accordingly. To make that task easier, we have prepared a short summary of selected changes to benefits and payments in the UK in 2023.

New limits on benefits received in the UK in 2023

Before discussing the new benefit rates, it is worth mentioning that the benefit cap has also changed, that is, the limit defining the maximum amount a person can receive across all the benefits they claim. These limits are set separately for people in different situations and currently stand at:

• For residents of the Greater London region:

Couples (with or without children) and single parents (provided the child is of the appropriate age): £25,323.00 per year, £2,110.25 per month, £486.98 per week

• Single people without children: £16,967.00 per year, £1,413.92 per month, £326.29 per week

• For residents of the rest of the United Kingdom:

Couples (with or without children) and single parents (provided the child is of the appropriate age): £22,020.00 per year, £1,835.00 per month, £423.46 per week

• Single people without children: £14,753.00 per year, £1,229.42 per month, £283.71 per week

What are the changes to benefits in the UK in 2023?

Except where indicated otherwise, the amounts given below are weekly rates.

Attendance Allowance

A benefit aimed at people of State Pension age who need help looking after themselves because of a disability (physical or mental). Depending on the level of support required, you may be paid:

• the lower rate: £68.10 (up from £61.85 in 2022)

• the higher rate: £101.75 (up from £92.40 in 2022)

Carer’s Allowance

A benefit for people who spend at least 35 hours a week caring for someone receiving certain benefits (this may include Disability Living Allowance or Attendance Allowance).

• rate for 2023: £76.75 (up from £69.70 in 2022)

Disability Living Allowance

A benefit for people with disabilities, which helps cover the costs of care and getting around. The rate depends on the level of help required. DLA consists of two components:

• care component (costs of care)

highest rate: £101.75 (up from £92.40 in 2022)

• middle rate: £68.10 (up from £61.85 in 2022)

• lowest rate: £26.90 (up from £24.45 in 2022)

• mobility component (costs connected with getting around)

higher rate: £71.00 (up from £64.50 in 2022)

• lower rate: £26.90 (up from £24.45 in 2022)

Employment and Support Allowance (ESA)

You can apply for new style ESA if you are under State Pension age and have a disability or health condition that affects how much you can work.

You cannot get “new style” ESA if:

• you are claiming Jobseeker’s Allowance

• you are claiming Statutory Sick Pay

If you receive Universal Credit, you can get “new style” ESA at the same time. If you receive both payments, your Universal Credit payment is reduced by the amount you receive in “new style” ESA.

While your claim is being assessed, you will usually receive the “assessment rate” for 13 weeks:

• up to £67.20 per week if you are under 25

• up to £84.80 per week if you are 25 or over

If the assessment of your claim takes longer than 13 weeks, you will continue to receive the “assessment rate” until you receive a decision or until your ESA ends.

After the assessment, if you are entitled to ESA, you will be placed in one of 2 groups. If you will be able to return to work in the future, you will be put in the work-related activity group. Otherwise, you will be placed in the support group.

You will get:

• up to £84.80 per week if you are in the work-related activity group

• up to £128.85 per week if you are in the support group

You will receive ESA every 2 weeks.

Housing Benefit

Housing Benefit can help with paying your rent if you are unemployed, on a low income or claiming benefits. It is being replaced by Universal Credit.

You can only make a new claim for Housing Benefit if one of the following conditions is met:

• you have reached State Pension age (you and your partner have reached State Pension age),

• you are in supported, sheltered or temporary housing.

Those who do not meet either of the above conditions can seek financial support towards housing costs through Universal Credit.

You can get help paying all or part of your rent. There is no set amount of Housing Benefit, and what you receive will depend on whether you rent privately or from the council. Use a benefits calculator to work out what you could get, or check what additional help is available.

The amount of the benefit depends on:

• how much your “eligible” rent is,

• whether you have a spare room,

• household income - including benefits, pensions and savings (over £6,000)

• circumstances, for example the age of the people in the household or whether one of the residents has a disability.

Your Housing Benefit may be reduced if you live in council or social housing and have a spare room. The reduction is:

• 14% of the “eligible rent” for 1 spare room

• 25% of the “eligible rent” for 2 or more spare rooms.

The Personal Allowance rates for those entitled to Housing Benefit for 2023 are:

• for single people:

under 25: £67.20 (up from £61.05 in 2022)

• aged 25 or over (or those entitled to main phase ESA): £84.80 (up from £77.00 in 2022)

• of State Pension age: £217.00 (up from £197.10 in 2022)

if State Pension age was reached on or after 1 April 2021: £201.05 (up from £182.60 in 2022)

• for single parents:

under 18: £67.20 (up from £61.05 in 2022)

• aged 18 or over (or those entitled to main phase ESA): £84.80 (up from £77.00 in 2022)

• of State Pension age: £217.00 (up from £197.10 in 2022)

if State Pension age was reached on or after 1 April 2021: £201.05 (up from £182.60 in 2022)

• for couples:

both people under 18: £101.50 (up from £92.20 in 2022)

• one or both people aged 18 or over (or those entitled to main phase ESA): £133.30 (up from £121.05 in 2022)

• having reached State Pension age: £324.70 (up from £294.90 in 2022)

if State Pension age was reached on or after 1 April 2021: £306.85 (up from £278.70 in 2022)

Income Support

A benefit intended to support people on low earnings or with no earnings. Income Support is currently being replaced by Universal Credit, and it is no longer possible to submit new claims for it. Those already receiving the benefit will continue to receive the support awarded to them until they move to Universal Credit or lose their entitlement to it.

The Personal Allowance rates for 2023 are:

• for single people:

under 25: £67.20 (up from £61.05 in 2022)

• aged 25 or over: £84.80 (up from £77.00 in 2022)

• for single parents:

under 18: £67.20 (up from £61.05 in 2022)

• aged 18 or over: £84.80 (up from £77.00 in 2022)

• for couples:

both people under 18: £67.20 (up from £61.05 in 2022)

• both people under 18 (higher rate): £101.50 (up from £92.20 in 2022)

• one person under 18, one under 25: £67.20 (up from £61.05 in 2022)

• one person under 18, the other aged 25 or over: £84.80 (up from £77.00 in 2022)

• both people aged 18 or over: £133.30 (up from £121.05 in 2022)

Jobseeker’s Allowance

A benefit for unemployed people, which can be claimed while looking for work. The rate for 2023 is:

• £67.20 for people under 25 and single parents under 18 (up from £61.05 in 2022)

• £84.80 for people aged 25 or over and single parents aged 18 or over (up from £77.00 in 2022)

Personal Independence Payment

A benefit awarded to help cover the extra living costs of people with a long-term disability or health condition that makes everyday tasks or getting around difficult.

• daily living component

enhanced: £101.75 (up from £92.40 in 2022)

• standard: £68.10 (up from £61.85 in 2022)

• mobility component

enhanced: £71.00 (up from £64.50 in 2022)

• standard: £26.90 (up from £24.45 in 2022)

State Pension

State Pension rates will rise both for those receiving the new pension and the old one.

• New State Pension: £203.85 (up from £185.15 in 2022)

• Old State Pension:

category A and B basic pension: £156.20 (up from £141.85 in 2022)

• category B lower basic pension, C and D: £93.60 (up from £85.00 in 2022)

Statutory Sick Pay

Sick pay paid by an employer to an employee who is unable to work due to illness.

• Earnings Threshold: £123.00

• Standard rate: £109.40 (up from £99.35 in 2022)

Universal Credit

A new benefit intended to help with living costs for people unable to work, the unemployed and those on low earnings. It replaces previously paid benefits including Housing Benefit and Income Support. The monthly rates for 2023 are:

• for single people:

under 25: £292.11 (up from £265.31 in 2022)

• aged 25 or over: £368.74 (up from £334.91 in 2022)

• for couples:

both people under 25: £458.51 (up from £416.45 in 2022)

• one or both people aged 25 or over: £578.82 (up from £525.72 in 2022)

Under Universal Credit, it is also possible to receive additional amounts, for example for a child, for childcare costs or due to limited capability for work.

Summary

The benefits listed above are not the only payments in the UK whose rates have been increased in 2023, but they are a great example of the changes introduced. If you do not know which benefit you are entitled to, or you need help calculating the rates that apply to you, we encourage you to contact an expert to discuss your situation.