Sets out the basis for the uprating of benefits and tax credits in the 2012-13 financial year.Jump to full report >>
This note sets out the main benefit and tax credit rates for the 2012-13 financial year.
From April 2012, most benefits will increase in line with CPI inflation (+5.2%).
The Government has introduced a ‘triple guarantee’ for uprating the basic state pension, which means that from 2012-13 onwards it will be increased by the highest of the increase in earnings, prices (as measured by the CPI) or 2.5%. For the purposes of the 2012-13 uprating, the 5.2% CPI inflation rate was the highest of these three benchmarks.
The Pension Credit standard minimum guarantee is required to be increased at least in line with earnings; the relevant earnings benchmark rose by 2.8%. However, the Government has decided to raise the standard minimum guarantee by 3.9% instead, paying for this by reducing payments on the Pension Credit Savings Credit.
The main elements of Working Tax Credit have been frozen in 2012-13, while Child Benefit remains frozen at its 2010-11 rates until April 2014.
Commons Briefing papers SN06172
Author: Roderick McInnes