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 2005, the September rate was 2.7 per cent, compared with 3.1 per cent in September 2004.
The September RPI is also used in the formula governing the basic state pension, which was set out in the 2005 Budget Report. This specified that the basic state pension will continue to rise each April by 2.5 per cent or the increase in the retail prices index for the previous September, 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 retail prices index excluding rent, mortgage interest payments, council tax and depreciation costs. In the twelve months to September 2005, the Rossi index increased by 2.2 per cent, compared with 1.0 per cent in September 2004.