Benefits in PolicyEngine

This article outlines how PolicyEngine models the UK benefit system. It details benefits in the UK welfare system and the implementation within the PolicyEngine microsimulation. This article serves as a technical reference for understanding how the PolicyEngine UK microsimulation model performs benefit calculations.

Table 1 summarises estimates for each benefit in the UK system, comparing PolicyEngine's 2025-26 fiscal year expenditure projections with those from the government (such as the Office for Budget Responsibility) and showing the percentage difference between them. While PolicyEngine accounts for interactions when tax and benefit programmes are introduced or removed, Table 1 shows only the direct expenditure for each benefit for consistency with government reports.

Table 1: Summary of UK benefit expenditure estimates

Programme	PolicyEngine estimate 2025 (£bn)	OBR estimate 2025-26 (£bn)	PolicyEngine affected population estimate 2025 (%)
Universal Credit	79.4	77.4	21.8
Housing Benefit	7.6	11.6	2.9
Tax Credits	<1.0	<1.0	0.1
Pension Credit	7.4	6.0	3.6
Personal Independence Payment	30.6	28.7	10.3
Disability Living Allowance	9.3	7.5	4.5
Attendance Allowance	10.2	8.0	3.9
Child Benefit	12.3	12.5	31.3
Winter Fuel Payment	<1.0	<1.0	2.7

As government estimates for childcare programmes are available for the 2024 fiscal year, we present them separately in the table below. Table 2 compares UK childcare programme costs, showing PolicyEngine's expenditure estimates for 2025 alongside both previous year estimates and official government projections.

Table 2: Summary of UK childcare programmes expenditure estimates

Programme	PolicyEngine estimate 2025 (£bn)	PolicyEngine estimate 2024 (£bn)	Government report 2024 (£bn)	PolicyEngine affected population estimate 2025 (%)
Tax-free childcare	0.7	0.6	0.6	2.8
Extended childcare	4.4	2.6	2.5	4.3
Universal childcare	1.8	1.6	1.7	2.6
Targeted childcare	0.5	0.5	0.6	0.5

This post has two main sections. The first covers means-tested benefits—such as Universal Credit, legacy programmes, and pension-age benefits—which vary with household income and savings. The second examines non-means-tested benefits, including disability, child, and retirement programmes, which are based on individual circumstances rather than income. For each benefit, the post details eligibility criteria, calculation methods, and how payments differ across the income distribution.

The government provides means-tested benefits based on household income, financial circumstances, and savings, with payments decreasing as income rises. The term 'means-testing' refers to the assessment of a claimant's financial resources to determine eligibility and payment amount. PolicyEngine models means-tested benefits by accounting for interactions between income sources, capital limits, and household composition. In the following sections, we examine each means-tested benefit in detail.

The Department for Work and Pensions (DWP) provides Universal Credit, a means-tested benefit that replaces six legacy benefits for working-age people. Our calculation methodology first determines a household’s maximum entitlement by summing various elements based on household circumstances, then reduces this amount based on income (applying the taper rate), and finally applies a benefit cap if necessary.

• Standard allowance: All eligible claimants receive the standard allowance as the core component of Universal Credit. The amount varies by age and by whether the claimant applies individually or as part of a couple. For 2025, a single person under 25 receives £311.68 per month, while a single person over 25 receives £393.45 per month. Couples where both members are under 25 receive £489.23 per month, while couples with at least one member over 25 receive £617.60 per month.

• Child element: In 2025, HM Revenue and Customs (HMRC) pays £333.33 per month for a first child born before April 2017 and £287.92 for other children. The two-child limit, introduced in April 2017, restricts payments to the first two children in most cases, with exemptions for situations such as multiple births or non-consensual conception. PolicyEngine identifies each eligible child in the household, checks whether the higher rate applies, applies the two-child limit where relevant, and sums the monthly amounts.

• Housing costs element: For social housing tenants, the DWP sets eligible housing costs equal to the full rent. For private rentals, DWP caps the amount using Local Housing Allowance (LHA) rates, which vary by location and required property size. DWP then reduces the award based on non-dependent deductions for other adults in the household. PolicyEngine applies these caps using household composition and geographical location to simulate how LHA rates and non-dependent deductions affect benefit calculations.

• Work allowances and taper rate: DWP reduces Universal Credit as earnings rise, applying a taper rate after accounting for any work allowance. In 2025, the work allowance is £404 per month for households receiving housing-related payments and £673 for those without. DWP deducts 55p from Universal Credit for every £1 earned above the allowance. PolicyEngine first checks if the household includes children or someone with limited capability for work. If so, it applies the work allowance and then reduces Universal Credit by the taper rate on earnings above that amount.

• Benefit cap: DWP enforces a maximum limit on total benefit income through the benefit cap, setting higher thresholds for London residents and exempting households with significant earnings or disability benefits. PolicyEngine checks whether a household qualifies for an exemption and, if not, applies the cap based on household composition and location.

PolicyEngine projects that Universal Credit will cost £79.4 billion in 2025-26, 2.6% more than the UK government's estimate of £77.4 billion for 2025-26. Figure 1 shows the distributional impact of this programme.

To show the impact of Universal Credit on household finances, we plot net income for a single-earner household with two 10-year-old children. Abolishing this benefit reduces the household's net income in the low-income range. Figure 2 shows this effect on household net income.

Figure 2. Household net income with and without Universal Credit

DWP provides Housing Benefit to people who do not receive Universal Credit, covering part or all of their rental costs. DWP calculates the award based on eligible rent—capped by Local Housing Allowance (LHA) for private rentals—and reduces it by 65% of income above the applicable threshold. It applies further reductions for non-dependent adults living in the household. DWP uses different rules for working-age and pension-age claimants and plans to transfer all working-age recipients to Universal Credit by March 2026.

DWP excludes certain income types through disregards, such as partial earnings and specific benefit payments. These include higher partial earnings disregards for lone parents, full disregards for benefits like Personal Independence Payment, and partial disregards for pension contributions and childcare costs. DWP sets the non-dependent deduction amount based on the non-dependent’s income and circumstances. A non-dependent is an adult such as an adult child or parent who lives with the claimant and is expected to contribute to housing costs.

PolicyEngine projects that Housing Benefit will cost £7.6 billion in 2025-26, 34.5% less than the UK government's estimate of £11.6 billion for 2025-26. Figure 3 shows the distributional impact of this programme.

We plot net income for a single-earner household receiving £10,000 in Housing Benefit per year. Removing this benefit reduces the household's net income in the low-income range. Figure 4 shows this effect on household net income.

Figure 4. Household net income with and without Housing Benefit

HMRC provided Tax Credits to increase the incomes of families with children and individuals in low-paid work. The system included two components—Child Tax Credit and Working Tax Credit—which claimants could receive separately or together. In April 2025, HMRC ended all Tax Credit payments and instructed claimants to apply for Universal Credit or Pension Credit to continue receiving support.

• PolicyEngine calculates Tax Credits using the following steps:
• Calculate the maximum entitlement for both Child Tax Credit and Working Tax Credit.
• Determine the relevant income threshold, which differs for claimants receiving both credits versus Child Tax Credit only.
• Reduce the entitlement by 41% of income above the threshold, withdrawing Working Tax Credit first, followed by Child Tax Credit.
• Exclude payments below the minimum threshold.

Tax Credits include two main components, which PolicyEngine models as follows:

• Child Tax Credit (CTC): In 2025, HMRC paid Child Tax Credit to families with children, regardless of employment status. The credit included a £570 annual family element for households with at least one qualifying child, and a £3,455 annual child element for each eligible child. HMRC also paid additional amounts for children with disabilities. The two-child limit applied to children born after April 2017.

• Working Tax Credit (WTC): In 2025, HMRC paid Working Tax Credit to individuals in low-paid work. It provided a basic element of £2,435 per year to all eligible claimants and added further amounts for couples, lone parents, and those working at least 30 hours per week. HMRC also covered up to 70% of eligible childcare costs—capped at £175 per week for one child or £300 for two or more children—through a dedicated childcare element.

HMRC reduces Tax Credits by 41% of income above the relevant threshold: £7,455 for households receiving both WTC and CTC, and £18,725 for those receiving CTC only. For every £1 above the threshold, HMRC withdraws 41p in Tax Credits.

PolicyEngine projects that Tax Credits will cost less than £1 billion in 2025-26, in line with the UK government's estimate of less than £1 billion for 2025-26.

DWP provides Pension Credit to pensioners whose income falls below a specified threshold. DWP divides Pension Credit into two parts: Guarantee Credit and Savings Credit. PolicyEngine applies a 70% take-up rate to reflect that not all eligible pensioners claim the benefit. This rate represents the proportion of eligible individuals who receive payments. We incorporate this behavioural assumption to produce more accurate aggregate estimates. PolicyEngine calculates Pension Credit using the following steps:

• Check whether the household includes at least one person of State Pension age.
• Calculate Guarantee Credit entitlement.
• Calculate Savings Credit entitlement, if applicable.
• Combine the two components.
• Apply the take-up rate to simulate real-world claiming behaviour.

Pension Credit includes two main components, which we describe in detail below:

• Guarantee Credit: DWP tops up weekly income to a guaranteed minimum level. In 2025, it sets the minimum at £218.15 per week for singles and £332.95 for couples. DWP adds further amounts for severe disability, caring responsibilities, and dependent children. PolicyEngine calculates the shortfall between the applicable minimum (including any additions) and the claimant’s assessed income, and pays that amount as Guarantee Credit.

• Savings Credit: DWP pays Savings Credit to pensioners with modest savings or income above the basic State Pension level. It's only available to those who reached State Pension age before April 2016. For 2025, the income threshold is £189.80 per week for singles and £301.22 per week for couples. The amount increases at a rate of 60% of income above the threshold, then decreases at 40% of income above the minimum guarantee level. PolicyEngine calculates Savings Credit using the following methodology:

• Check if the claimant reached State Pension age before April 2016.

• Determine relevant income for calculating Savings Credit.

• Calculate the maximum possible Savings Credit as 60% of the difference between the minimum guarantee and the threshold.

• Award Savings Credit at 60% of income above the threshold, up to the maximum.

• Reduce the award by 40% of income above the minimum guarantee.

PolicyEngine projects that Pension Credit will cost £7.4 billion in 2025-26, 23.3% more than the UK government's estimate of £6.0 billion for 2025-26. Figure 5 shows the distributional impact of this programme.

We plot net income for a single-earner household with a 70-year-old adult. Removing Pension Credit reduces the household’s net income in the low-income range. Figure 6 shows this effect on household net income.

Figure 6. Household net income with and without Pension Credit

Non-means-tested benefits address specific needs or circumstances, regardless of household income. Unlike means-tested benefits, these payments remain fixed as income increases. PolicyEngine identifies eligibility based on defined characteristics or conditions rather than financial resources. In the following sections, we describe each non-means-tested programme and explain how we model them.

DWP provides Personal Independence Payment (PIP) to individuals with long-term health conditions or disabilities. The benefit includes two components: daily living and mobility. DWP pays each component at either a standard or enhanced rate, depending on an assessment of the claimant’s needs. PIP replaced Disability Living Allowance for working-age adults and uses a points-based system to determine eligibility and payment levels. PolicyEngine calculates PIP using the following steps:

• Identify individuals with disabilities in the dataset.
• Assign daily living and mobility components based on reported needs.
• Apply the rate for each component.
• Combine both components to determine the total PIP.

For 2025, the daily living component is £108.55 per week at the enhanced rate and £72.65 per week at the standard rate. The mobility component is £75.75 per week at the enhanced rate and £28.70 per week at the standard rate.

PolicyEngine projects that PIP will cost £30.6 billion in 2025-26, 6.6% more than the UK government's estimate of £28.7 billion for 2025-26. Figure 7 shows the distributional impact of this programme.

We plot net income for a single-earner household. When the individual receives the mobility component of PIP, they also receive the disability component of Universal Credit, which raises take-home income compared to the scenario without PIP. At lower income levels, this additional benefit increases household income. As earnings rise and the household loses eligibility for Universal Credit, the difference in take-home income between the two scenarios levels off. Figure 8 shows take-home income under both scenarios.

Figure 8. Household net income with and without PIP

DWP provides Disability Living Allowance (DLA), which includes two components: self-care (equivalent to PIP’s daily living component) and mobility. DWP continues to pay DLA for children, while most working-age adults have transitioned to PIP. Some adults who received DLA before PIP was introduced remain on the benefit under transitional protection. PolicyEngine calculates DLA using the following steps:

• Identify eligible children and protected adults in the dataset.
• Assign the self-care component using a three-tier scheme (higher, middle, or lower rate) based on care needs.
• Assign the mobility component using a two-tier scheme (higher or lower rate) based on the severity of mobility limitations, then apply the appropriate rate.
• Combine both components to calculate the total DLA.

For 2025, the self-care component has three possible rates: higher (£108.55 per week), middle (£72.65 per week), and lower (£28.70 per week). The mobility component has two rates: higher (£75.75 per week) and lower (£28.70 per week). We calculate the annual amount by multiplying the weekly rates by 52.

PolicyEngine projects that Disability Living Allowance will cost £9.3 billion in 2025-26, 24.0% more than the UK government's estimate of £7.5 billion for 2025-26. Figure 9 shows the distributional impact of this programme.

We plot net income for a single-earner household. When the individual receives the mobility component of Disability Living Allowance (DLA), they also qualify for the disability component of Universal Credit, which increases take-home income compared to the scenario without DLA. At lower income levels, this additional benefit raises household income. As earnings increase and the household loses eligibility for Universal Credit, the difference in take-home income between the two scenarios levels off. Figure 10 shows take-home income under both scenarios.

Figure 10. Household net income with and without DLA

DWP provides Attendance Allowance at two rates, based on the level of care required. DWP pays this benefit to individuals who became disabled after reaching State Pension age, since they cannot claim PIP or DLA for the first time after this point. PolicyEngine calculates Attendance Allowance using the following steps:

• Identify individuals over State Pension age with care needs.
• Determine the rate based on whether care is needed during the day, night, or both.
• Assign the weekly rate and calculate the annual amount.

For 2025, the higher rate is £108.55 per week and the lower rate is £72.65 per week. The higher rate applies to those needing care both day and night, or those who are ill. The lower rate applies to those needing care either during the day or at night. PolicyEngine calculates the annual amount by multiplying the weekly rate by 52. DWP uprates all three disability benefits annually using the Consumer Price Index (CPI). This ensures that benefit rates maintain their real value against inflation, protecting the purchasing power of disabled recipients.

PolicyEngine projects that Attendance Allowance will cost £10.2 billion in 2025-26, 27.5% more than the UK government's estimate of £8.0 billion for 2025-26. Figure 11 shows the distributional impact of this programme.

We plot net income for a single-earner household receiving £5,000 per year in Attendance Allowance. Removing this benefit reduces the household’s net income. Figure 12 shows this effect on household finances.

Figure 12. Household net income with and without Attendance Allowance

HMRC pays Child Benefit for children under 16, or under 20 if they remain in approved education or training. Unlike means-tested benefits, HMRC pays Child Benefit at a flat rate, regardless of household income. In 2025, the rate is £26.04 per week for the first child and £17.24 per week for each additional child. PolicyEngine calculates Child Benefit using the following steps:

• Identify eligible children in each household.
• Apply the higher rate to the eldest (or only) eligible child.
• Apply the standard rate to additional eligible children.
• Calculate the High Income Child Benefit Charge (HITC), if applicable.
• Determine the net Child Benefit after applying the HITC.

The High Income Child Benefit Charge (HITC) effectively withdraws this benefit when individual income exceeds £50,000, with complete withdrawal at £60,000. HMRC increases the charge proportionally with income within this range. For each £100 of income above £50,000, it reclaims 1% of the Child Benefit through the tax system.

PolicyEngine projects that Child Benefit will cost £12.3 billion in 2025-26, 1.6% less than the UK government's estimate of £12.5 billion for 2025-26. Figure 13 shows the distributional impact of this programme.

We plot net income for a single-earner household with £10,000 in annual childcare expenses. Removing Child Benefit reduces the household’s net income. Figure 14 shows this effect on household net income.

Figure 14. Household net income with and without Child Benefit

DWP provides the State Pension based on an individual’s National Insurance contribution history rather than their current financial circumstances. PolicyEngine calculates State Pension using the following steps:

• Check whether the individual has reached State Pension age.
• Identify which State Pension scheme applies (pre- or post-April 2016).
• Calculate entitlement based on National Insurance contributions and apply the corresponding rate.

Two schemes apply, depending on when the individual reached State Pension age:

• New State Pension: For those reaching State Pension age on or after April 6, 2016. For 2025, the full rate is £221.20 per week, reduced proportionally for those with fewer than 35 qualifying years of National Insurance contributions (minimum 10 years required). The calculation multiplies the full rate by the fraction of qualifying years divided by 35, with a minimum threshold of 10 qualifying years.

• Basic State Pension: For those who reached State Pension age before April 6, 2016. For 2025, the full rate is £169.50 per week, plus Additional State Pension based on earnings-related contributions. The Basic State Pension requires 30 qualifying years for a full pension, with a proportional reduction for those with fewer years.

Both schemes apply the triple lock for annual uprating, increasing pensions by whichever is highest: inflation, earnings growth, or a fixed rate of 2.5%. PolicyEngine evaluates all three measures each year and applies the maximum value to model the triple lock.

DWP pays the Winter Fuel Payment as an annual payment to older individuals to cover winter heating costs. PolicyEngine calculates Winter Fuel Payment using the following steps:

• Identify households with members of eligible age.
• Determine the payment rate based on age and household composition.
• Assign the annual payment amount.

In 2025, DWP pays £200 to households with someone aged 66 to 79 and £300 to those with someone aged 80 or over. In households with multiple pensioners, DWP allocates the payment to ensure no household receives more than the maximum amount.

In Scotland, the Pension Age Winter Heating Payment (PAWHP) has replaced this benefit, with similar rate structure. This reflects the devolution of certain benefits to the Scottish government, which has implemented its own version of the payment with similar eligibility criteria and rates.

PolicyEngine projects that Winter Fuel Payment will cost less than £1 billion in 2025-26, in line with the UK government's estimate of less than £1 billion for 2025-26.

HMRC operates the Tax-Free Childcare scheme, which adds a government top-up to parental childcare payments made through an online account. Parents deposit funds into the account, and HMRC adds a contribution based on the total amount paid. PolicyEngine calculates Tax-Free Childcare using the following steps:

• Identify households with eligible children.
• Check income conditions and work requirements for parents.
• Calculate childcare expenses and the corresponding government contribution.
• Apply the maximum contribution cap per child.

In 2025, the government contributes 20% of childcare costs, effectively adding £2 for every £8 parents spend. The annual top-up is capped at £2,000 per standard child and £4,000 per disabled child. This 20% rate mirrors the value of basic rate income tax relief. Eligibility criteria include age requirements (children under 12, or under 17 if disabled), income conditions, and work requirements (both parents must generally be working, with exceptions for disability).

PolicyEngine projects that tax-free childcare will cost £0.6 billion in 2024-25, in line with the UK government's estimate of £0.6 billion for 2024-25. Figure 15 shows the distributional effect of this benefit.

We plot net income for a single-earner household with one child aged 3. These households become eligible for Tax-Free Childcare (TFC) when the earner makes at least £9,516 per year at age 21 or older. The benefit ends at £100,000, creating a drop in take-home income. This threshold creates a gap between households just above and just below the eligibility cutoff. Figure 16 shows this effect on household net income.

Figure 16. Household net income with and without TFC

Households with income just above £100,000 lose eligibility, resulting in a sharp drop in their childcare entitlement—often described as an earnings cliff. At this threshold, families transition from receiving childcare funding to losing it entirely.

The Department for Education (DfE) provides the universal childcare entitlement, which grants free childcare hours to all children aged 3 to 4, regardless of parental income or work status. PolicyEngine calculates universal childcare entitlement using the following steps:

• Identify children aged 3 to 4 years old.
• Apply the standard entitlement of 570 hours per year.
• Calculate the funding amount using the applicable funding rate.

In 2025, the entitlement provides 570 hours per year—equivalent to 15 hours per week over 38 weeks—funded at £5.88 per hour. This results in an annual in-kind value of £3,351.60 per eligible child.

PolicyEngine projects that universal childcare entitlement will cost £1.6 billion in 2024-25, 5.9% less than the UK government's estimate of £1.7 billion for 2024-25. Figure 17 shows the distributional impact of this benefit.

We plot net income for a single-earner household with one child aged 3. Households cannot receive Tax-Free Childcare (TFC) and universal childcare at the same time. Figure 18 shows household net income based on the head's employment income.

Figure 18. Household net income with and without universal childcare entitlement

DfE provides the extended childcare entitlement, which offers additional free childcare hours to working parents. This extends the universal entitlement by adding 15 hours per week for children aged 3 to 4, and from 2024, it begins to cover younger children as well. PolicyEngine calculates extended childcare entitlement using the following steps:

• Identify children in eligible age ranges.
• Check parental work and income conditions.
• Apply the hourly entitlement based on the child's age.
• Calculate the funding amount using age-specific rates.

In 2025, the entitlement varies by child age: children aged 9 to 23 months and 2 years receive 15 hours per week, increasing to 30 hours per week in 2026, while children aged 3 to 4 years receive 30 hours per week, which combines the universal 15 hours with an additional 15 hours.

The funding rates vary by age: £11.22 per hour for children under 2, £8.28 per hour for 2-year-olds, and £5.88 per hour for children aged 3 and over. These different rates reflect the higher staffing requirements and costs of caring for younger children.

PolicyEngine projects that extended childcare entitlement will cost £2.6 billion in 2024-25, 4.0% more than the UK government's estimate of £2.5 billion for 2024-25. Figure 19 shows the distributional effect of this benefit.

We plot net income for a single-earner household with one child aged 3. Households become eligible for extended childcare entitlement when earning at least £9,516 annually for adults aged 21 or over. The benefit ends at £100,000, causing a drop in take-home pay. Households earning above this threshold lose eligibility entirely. Figure 20 shows this effect on household net income.

Figure 20. Household net income with and without extended childcare entitlement

DfE provides the targeted childcare entitlement, which offers free childcare to 2-year-olds in lower-income families. PolicyEngine calculates targeted childcare entitlement using the following steps:

• Identify children aged 2 years old.
• Check if the family receives qualifying benefits or meets income criteria.
• Apply the standard entitlement of 570 hours per year.
• Calculate the funding amount using the 2-year-old rate.

In 2025, the programme provides 570 hours per year (15 hours per week over 38 weeks), funded at £8.28 per hour. This results in an annual value of £4,719.60 per eligible child. The Department for Education grants eligibility to families receiving qualifying benefits or meeting income thresholds: under £16,190 per year for Tax Credit recipients, or earned income below £15,400 per year for those on Universal Credit.

PolicyEngine projects that targeted childcare entitlement will cost £0.5 billion in 2024-25, in line with the UK government's estimate of £0.6 billion for 2024-25. Figure 21 shows the distributional effect of this benefit.

We plot net income for a single-earner household with one child aged 2. Figure 22 shows household net income based on the head’s employment income.

Figure 22. Household net income with and without targeted childcare entitlement

DfE provides the Care to Learn programme, which covers childcare costs for young parents in education. PolicyEngine calculates Care to Learn using the following steps:

• Identify eligible young parents under 20 years old.
• Verify they are in non-tertiary education (not university or higher education).
• Check if they live in England and are not apprentices.
• Calculate the funding amount based on regional rates (London versus outside London).

In 2025, the scheme provides weekly payments up to £195 for those living in London and £180 for those outside London. PolicyEngine multiplies this weekly amount by the number of weeks in a year, resulting in annual values up to £10,140 for London residents and £9,360 for those outside London.

To qualify, claimants must be under 20, live in England, be in eligible education, and not be apprentices. The Family Resources Survey does not include relevant cases, so PolicyEngine cannot estimate the economic impact of this programme. However, PolicyEngine implements the programme and includes it in household benefit calculations.

The UK government introduced several temporary programmes to reduce household energy costs. These schemes were delivered by HM Treasury and local authorities, depending on the mechanism:

• Energy Bills Credit: HM Treasury provided £400 per household as monthly reductions on electricity bills from October 2022 to March 2023. The discount applied automatically to all domestic electricity accounts over six monthly instalments. The government concluded the scheme in March 2024 and did not extend it beyond the winter period.

• Council Tax Rebate: Local authorities paid £150 to households in Council Tax bands A–D in England, with similar programmes in devolved nations. Councils distributed these payments between April and September 2022, and the scheme officially closed in November 2022.

• Energy Price Guarantee: HM Treasury capped typical household energy bills at £2,500 per year by limiting unit prices for gas and electricity. The government compensated energy suppliers for the difference between market rates and the guaranteed cap. This scheme ended in June 2023.

HMRC and DWP provided the Cost of Living Support Payment as a one-off payment to households facing higher living costs. For the 2022–23 period, the payments included:

• £650 for recipients of means-tested benefits, paid in two instalments.
• £150 for recipients of disability benefits.
• £300 for pensioners eligible for the Winter Fuel Payment.

PolicyEngine models the current UK benefits system and potential reforms, showing distributional impacts by income decile. Users analyse how benefit changes affect household incomes, government budgets, and behavioural responses such as labour supply. The model captures how benefit design influences household decisions and economic outcomes. We invite you to explore these policy effects on the PolicyEngine interface.