Benefit Payments And RPI
Uprating of benefit payments
Many state benefits, such as Child Benefit, Incapacity Benefit and Disability Living Allowance, are usually uprated in line with the 12-month rate in September of the all items Retail Prices Index (RPI). In 2009, the September rate was -1.4 per cent, compared with 5.0 per cent in September 2008.
The September RPI is also used in the formula governing the basic state pension, which was set out in the Budget Report. This states that increases in the basic state pension will be in line with the Retail Prices Index or 2.5 per cent (whichever is higher).
Income-related benefits (for example, Job Seeker's Allowance, Housing Benefit and Income Support) are usually uprated in line with September’s 12-month rate of the Rossi index, defined as the all items Retail Prices Index excluding rent, mortgage interest payments, council tax and depreciation costs. In the months to September 2009, the Rossi index increased by 1.8 per cent, compared with 6.3 per cent in September 2008.
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