Universal credit rules tightened for part-time workers

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Low paid part-time workers will have their benefits reduced if they do not take "active steps" to earn more, under a reform announced in the mini-budget.

Chancellor Kwasi Kwarteng had trailed the change, which he said was designed to "get Britain working again".

Under the new rule, claimants working up to 15 hours a week at the minimum wage will have to look for more or better paid work.

Labour said the country needed a plan to support people to return to work.

Mr Kwarteng set out new Prime Minister Liz Truss's plans to tackle the cost-of-living crisis in a mini-budget on Friday.

Currently, universal credit claimants working up to 12 hours a week at the National Living Wage, which is the government-set minimum wage, risk having their benefits reduced if they do not take steps to increase their earnings and meet regularly with a work coach.

Under the chancellor's reform, which takes effect in January 2023, this requirement will now be extended to people on universal credit working up to 15 hours a week at the National Living Wage.

The change will affect about 120,000 more benefit claimants.

The Treasury said certain groups will remain exempt from sanctions, including people who are unable to work because of long-term sickness or a disability.

Labour's shadow work and pensions secretary : "So Tory ministers think [the] reason we have over a million vacancies is because the low paid aren't working hard enough and need to be threatened with sanctions but bankers needs bumper bonuses. We need a serious plan to support people to return to work & increase labour supply."

The chancellor said the government would also provide extra support for unemployed over-50s. Jobseekers in that category will be given extra time with jobcentre work coaches.

The Treasury said rising economic inactivity among the over-50s was ''contributing to shortages in the jobs market, driving up inflation and limiting growth''.

It said returning to pre-pandemic activity rates in the over-50s could ''boost the level of GDP by up to one percentage point.".

Mr Kwarteng said: "One of the proudest achievements of our government is that unemployment is at the lowest level for nearly 50 years.

"But with more vacancies than unemployed people to fill them, we need to encourage people to join the labour market.

"We will make work pay by reducing people's benefits if they don't fulfil their job search commitments."