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Increase in inflation-linked benefits and tax credits

The government will increase inflation-linked benefits and tax credits by 1.5 per cent in April 2010 including:

• Child Benefit
• Guardian’s Allowance
• disability elements of Child Tax Credit
• all elements of Working Tax Credit (WTC) apart from childcare
• the amount of WTC not taken into account when calculating Housing Benefit

So far this year tax credits have helped 400, 000 people by an average of £37 extra per week.

Child Tax Credit

The child element of the Child Tax Credit will increase by £65 in 2010-11, reflecting earnings indexation and the extra £20 increase announced in Budget 2009.

• How Child Benefit, tax credits and Guardian's Allowance are paid (money, tax and benefits section)

Benefit increases and the Retail Price Index

Usually, increases in these benefits are linked to the September Retail Price Index (RPI).

The RPI measures the average change from month to month in the prices of goods and services bought in the UK.

The September RPI was minus 1.4 per cent and would have meant that these benefits wouldn’t have increased in April without the Chancellor’s announcement.

State pension increase

The basic state pension will also increase by 2.5 per cent. The full basic State Pension for a single person will rise by £2.40 a week to £97.65 in April 2010.

The couples full basic rate will rise by £3.85 to £156.15 a week.

• Understanding the basic State Pension (pensions and retirement planning)

Pension credit

There will also be an above-indexation increase in Pension Credit’s Minimum Income Guarantee to £132.60 for single pensioners and £202.40 for couples in 2009-10.

• Pension Credit - introduction (pensions and retirement planning)

Free school meals

Primary school children whose parents are on low income in England will now get free school meals. This measure will benefit around 500,000 children.

• Back to school: applying for free school meals

Help to heat your home and pay your energy bills

The Chancellor announced further help for vulnerable and low-income households to help pay energy bills and heat their homes.

Warm Front scheme

The Warm Front scheme provides free and subsidised heating and insulation to vulnerable households. The Chancellor announced an extra £150 million for the scheme, which will help 75,000 households.

• Keep Warm Keep Well Opens new window

• Warm Front Scheme in England (money, tax and benefits section)

Help with energy bills

Also, there will be an increase in the amount of help currently given by energy companies to help pay energy bills from £150 million to £300 million. This increase will take effect by 2013-14.

• Help with heating your home (pensions and retirement planning)

• Energy Efficiency grants (money, tax and benefits section)

Work and family life balance

The government will allow parents to divide a period of paid leave between them in the second six months of their child’s life. The aim of this measure is to help balance work and family life.