Half Year Economic and Fiscal Update (HYEFU) - December 2020

Forecast Summary

The Treasury’s Half Year Economic and Fiscal Update (HYEFU) released on 16 December 2020 includes benefit number forecasts as part of the fiscal forecasts. The benefit forecasts were finalised using benefit data up to October 2020. This publication illustrates key benefit number forecasts presented in the HYEFU 2020.

There is a lot of uncertainty with these forecasts because of the various interactions between benefits and government interventions combined with a heightened level of economic uncertainty due to the COVID-19 pandemic.

Overall, the number of people receiving a working-age benefit (WAB) (Working-age benefits defined here as Jobseeker Support, Sole Parent Support and Supported Living Payment) is expected to be lower than was forecast in the Pre-Election Economic and Fiscal Update (PREFU) 2020. This is mainly because the number of people on Jobseeker Support has been lower than expected. Since the PREFU 20, we saw fewer COVID-19 Income Relief Payment (CIRP) recipients than expected and also a smaller proportion of CIRP recipients transferred to JS than was expected, which contributes to the lower forecast number of JS recipients for HYEFU 20. We also did not see significant growth in the number of JS recipients following the end of the Wage Subsidies.

However, we still expect the number of people on a WAB to rise, and peak in January 2022. This is because economic spending is expected to be lower, and some firms will find that demand will not return to pre-COVID levels. Economic conditions can drive the ease with which people can find work, indicating the level of income support people may need.

In October 2020, around 367,600 people were receiving a WAB (latest actual at time forecast was finalised), at 11.8% of the working-age population. We expect the number of people on a WAB to still peak at the same time compared to the PREFU 2020 (in January 2022).

The expected trends in WAB numbers will also have a flow-on effect on the number of people who will receive a supplementary assistance payment such as Accommodation Supplement.