Business
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 2003,
the September rate was 2.8 per cent, compared with
1.7 per cent in the same month in the previous year.
The September RPI is also used
in the formula governing the basic state pension,
which was set out in the 2002 Budget Report. This
specified that the basic state pension will rise by
2.5 per cent or the increase in the September Retail
Price Index, whichever is higher.
Income-related benefits (e.g.
Job Seekers 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 index less rents, mortgage interest payments,
council tax and depreciation costs. In the twelve
months to September 2003, the Rossi index increased
by 1.8 per cent, compared with 1.3 per cent in September
2002
