Social security benefit rates are increased every April to reflect the current rate of inflation (as measured by the Retail Prices Index (RPI) over the 12 months to the previous September). However, in the 12 month period leading up to September 2009, there was “negative inflation”, which saw the RPI drop by 1.4%.

Despite this, the Government is still increasing many benefit levels under temporary powers granted by the Welfare Reform Act 2009 s.23. For the most part, the increases will amount to roughly half the amount that the RPI is expected to rise by next year.

The main benefit increases are:

• The Basic State Pension (along with the equivalent components in Widow’s, Bereavement and Industrial Death Benefits) will increase by 2.5% from £95.25 to £97.65 a week from April 12th, 2010.
• Standard Rate Maternity Allowance and Statutory Maternity, Paternity and Adoption Payments will all rise 1.5% to £124.88 per week.
• Higher Rate Attendance Allowance and the care component of Disability Living Allowance are both to increase by 1.5% to £71.40 per week.

Perhaps unusually, there are to be no increases to Additional Pension, Invalidity Allowances and Age Additions payable with State Pension, Graduated Retirement Benefit (the predecessor of SERPS), Increments to State Pension, Increases for Adult Dependants and Statutory Sick Pay.

It is also worth noting that the phasing in of the increase from 60 to 65 of the age at which women are eligible for State Retirement Pension will also begin in April 2010.

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