Thousands more part-time workers could see their benefits cut if they don’t take “active steps” to work more as part of a proposed welfare reform.
Chancellor Kwasi Kwarteng is expected to announce a restructuring of the welfare system to “put Britain back to work”.
Part of the plan targets Universal Credit beneficiaries who work up to 15 hours a week at the national subsistence level.
Labour’s Jonathan Ashworth said the plan threatens low wage earners with sanctions if they don’t work hard enough.
Mr Kwarteng is set to lay out new Prime Minister Liz Truss’ plans for dealing with the cost-of-living crisis in a mini-budget on Friday.
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Currently, Universal Credit beneficiaries who work up to 12 hours a week on the National Living Wage risk having their benefits cut if they don’t take steps to increase their income and meet regularly with a work coach.
Now, as part of Chancellor’s reform, that requirement is being extended to people on Universal Credit who work up to 15 hours a week at the national subsistence level.
This change, which is expected to take effect from January 2023, is expected to affect approximately 120,000 additional benefit claimants.
The Treasury said certain groups would remain exempt from sanctions, including people who are unable to work due to a long-term illness or disability.
Shadow Work and Pensions Secretary Mr Ashworth, tweeted: “This is how Tory ministers think [the] The reason we have over a million vacancies is because the low paid don’t work hard enough and they need to be threatened with sanctions, but bankers need boost bonuses. We need a serious plan to help people get back to work and increase labor supply.”
The Treasury said rising economic inactivity among the over-50s was “contributing to bottlenecks in the labor market, driving up inflation and limiting growth”.
It said a return to pre-pandemic activity rates in the over-50s could “boost GDP levels by up to 1 percentage point”.
Chancellor Kwarteng said: “While unemployment is at its lowest level in almost fifty years, the high number of remaining vacancies and inactivity in the labor market are limiting economic growth.”
He added: “These incremental changes are focused on getting people back to work and maximizing the hours people put in to help the economy grow and raise living standards for all.”
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