Overview

This bill, the Welfare Benefits Up-rating Bill, mandates a 1% increase in various social security benefits and tax credits for the tax years 2014-15 and 2015-16. The increase is subject to an annual review of price levels; if inflation is less than 1%, no increase will be applied.

Description

Social Security Benefits

The Secretary of State is required to increase specified social security benefits by 1% for the tax years 2014-15 and 2015-16. These benefits are defined in Schedule 1 and include elements of Income Support, Housing Benefit, Jobseeker's Allowance, Employment and Support Allowance, and other benefits determined by relevant regulations. The Government Actuary must report on the financial impact on the National Insurance Fund. Adjustments can be made to round sums up or down. The increase is conditional upon a review showing that prices have risen by at least 1%.

Tax Credits

Similarly, the Treasury must increase specified tax credits by 1% for the tax years 2014-15 and 2015-16. The specific tax credits are defined in Schedule 2 and primarily cover aspects of Working Tax Credit and Child Tax Credit. This increase is also contingent on a price increase review, and the Treasury cannot adjust these amounts otherwise.

Government Spending

The bill will lead to increased government spending on social security benefits and tax credits. The exact figure is not specified in the bill but will depend on the number of beneficiaries and the amounts of individual benefits and credits.

Groups Affected

The bill will affect:

• Recipients of various social security benefits (e.g., Income Support, Housing Benefit, Jobseeker's Allowance, Employment and Support Allowance): They will receive a 1% increase in their benefits (if inflation warrants it).
• Recipients of Working Tax Credit and Child Tax Credit: They will also receive a 1% increase (if inflation warrants it).
• The UK Treasury: Increased expenditure on social security and tax credits.

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