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Welfare reform the changes

A number of changes to benefits and the welfare system will be made in the next few years. You can find a brief overview of the changes below.

Currently pension payments will rise in line with whichever of the following is the highest; average earnings, inflation rate, or 2.5 per cent.

Housing Benefit claims are backdated for up to three months for pensioners.

State Pension payment increase

From April 2018:

  • Old State Pension will increase by £3.65 per week
  • New State Pension will increase by £4.80 per week

For a single person:

  • Pension Credit Guarantee Credit will increase by £3.65 per week 
  • Pension Credit Savings Credit will increase by 20p a week

For a couple:

  • Pension Credit Guarantee Credit will increase by £5.55 a week
  • Pension Credit Savings Credit will increase by 9p a week

State Pension age increase

The State Pension age has changed.

You can check your State Pension age online: www.gov.uk/state-pension

In 2015 Disability Living Allowance (DLA) was replaced with Personal Independence Payments (PIP). 

Only pensioners and those under the age of 16 will continue to receive DLA.

You do not need to do anything until the DWP writes to you.

More information: www.gov.uk/pip-checker 

The National Minimum Wage has increased, these rates change every year. You should check GOV.uk for the current rates: www.gov.uk/national-minimum-wage-rates

If you live in a housing association property managed by a Registered Social Landlord can now apply to buy your properties. This is currently in trial so you will need to check if this is available to you.

You can find more information on Right to Buy website: righttobuy.gov.uk/am-i-eligible/housing-association-tenants/

In 2016 Local Housing Allowance rates were frozen until 2020/21. 

If you receive Working Tax Credit and your income increases by more than £2,500 in the current year then your Tax Credits will change. 

Previously the limit was £5,000 but this was changed in 2016.

You can read more on the GOV.uk website: www.gov.uk/changes-affect-tax-credits

We can make a Discretionary Housing Payment in special circumstances to give you extra help to pay your rent, Council Tax or both. 

Find our more about Discretionary Housing Payments.

The applicable amount is the maximum amount of weekly income you can receive before it affects your council tax support or housing benefit.

The applicable amount for working age has been frozen until 2020/21.

You can find more information on GOV.uk: www.gov.uk/benefits-calculators

Backdating claims has been reduced to one month for all benefit claims except for pensioner claims which can be backdated by up to three months. 

Council Tax support/reduction can still be backdated by up to six months.

Social and council housing rents are being reduced by one per cent a year for four years until 2020/21. This means that there will be a 12 per cent reduction in average rents by 2020/21. 

The ‘rent’ used to calculate this reduction does not include any service charges.  

You are only taxed on the income that you make above the Personal Allowance. These have been increased over the last few years.

You can check the current allowances on GOV.uk:  www.gov.uk/income-tax-rates/current-rates-and-allowances

Child Benefit payment changes have been frozen until 2018.

You can check the current Child Benefit payment information on GOV.uk:  https://www.gov.uk/child-benefit/overview

You will now only be able to claim Housing Benefit and Pension Credit payments for up to four weeks if you are outside of Great Britain, this was reduced from the previous 13 week limit. 

In 2016 it was decided that The Family Premium of £17.40 would no longer be added to new Housing Benefit claims

If you are currently receiving this premium you will continue to do so until your circumstances change or you make a new claim. 

This change will also affect existing claimants who have a change of circumstances after that date (such as the birth of a child) as they will no longer be eligible for the premium.      

These changes apply to both the working and pension age regulations.

The benefit cap was introduced in 2013 and ensured that no working age household on benefits would receive more income than a family earning the average wage.

Working age households with a resident receiving Disability Living Allowance (DLA) or Personal Independence Payments (PIP) are exempt from the cap, along with any household who is working enough hours to be eligible to claim Working Tax Credit (WTC). 

You can check the current benefit cap amounts of GOV.uk: www.gov.uk/benefit-cap/benefit-cap-amounts

In 2015 it was announced that benefits would not be paid for more than two children unless the additional children were born before April 6th 2017.

There are some exceptions for special circumstances. 

You can find our more on GOV.uk: www.gov.uk/guidance/claiming-benefits-for-2-or-more-children

The removal of the Work Related activity component of Employment and Support Allowance (ESA) in 2017 meant a reduction in benefit payment for some claimants.

You can find more information on ESA on the GOV.uk website: www.gov.uk/employment-support-allowance

At present, all three and four year olds are entitled to 15 hours of free childcare over 38 weeks – a universal provision that is not affected by the circumstances of the parent or child, including their means.

In 2017 it was announced that The Childcare Bill will provide a further additional 15 hours of free childcare for 38 weeks of the year but only for a “qualifying child of a working parent”.

You can find more information on the GOV.uk website: www.gov.uk/help-with-childcare-costs/tax-free-childcare

December 2018

Universal Credit Housing Support for 18-21 year olds

18-21 year olds will automatically be entitled to housing support in Universal Credit. This reverses a conditionality that was previously introduced for this age group.

January 2019

Severe Disability Premium and Universal Credit

Claimants receiving the Severe Disability Premium in a legacy benefit will not be able to move on to Universal Credit for the foreseeable future.

The SDP is an amount paid to severely disabled people as part of the following legacy benefits:

  • JSA(IB)
  • ESA(IR)
  • IS
  • HB

These claimants also need to be in receipt of one of the following disability benefits, and live alone (or be classed as living alone) and no one must be in receipt of Carer’s Allowance (CA) or the UC Carer Element for caring for them:

  • Disability Living Allowance (DLA) care component at the middle or higher rate
  • Personal Independence Payment PIP) daily living component at the standard or enhance rate
  • Attendance Allowance or Constant Attendance Allowance
  • Armed Forces Independence Payment (AFIP).

If the claimants are in a couple, they get the higher amount of severe disability premium if the claimant and partner are eligible.

Claimants who receive a legacy benefit which includes the SDP, will no longer receive SDP or any other premium once they make a claim to UC. These premiums are not payable under UC regulations.

February 2019

Universal Credit Two-child Limit

From 1st February 2019, families with more than two children who make new claims for Universal Credit will no longer be directed to claim Child Tax Credit.

The two child limit will not apply to those families.

Those who have been awarded Universal Credit after April 2017 and have two or fewer children but who then have a third or subsequent child will have the two-child limit applied.

Pension Credit Child allowances

From 1 February, people of Pension Credit age who are responsible for a dependent child or children, will receive help with the child or children in the form of dependent allowances paid within their Pension Credit award.  This is because you will no longer be able to make a new claim for Tax Credits (Child Tax Credit or Working Tax Credit) if you are Pension Credit age.

April 2019

Universal Credit Work Allowance Increases

Work allowances are the amount of your earnings from employment that you are allowed to keep before it is taken into account as income for Universal Credit.  These will increase by £1000 for the year, meaning that people in work who have children or have limited capability for work (or their partner has limited capability for work) will benefit by up to £630 per year.

National Minimum Wage Increase

The National Living Wage will increase by 4.9% from £7.83per hour to £8.21 per hour in April 2019.

The National Minimum Wage increases from £7.38 per hour to £7.70 per hour for people aged 21 to 24; and from £5.90per hour to £6.15per hour for people aged 18 to 20.

May 2019

Universal Credit and Mixed Aged Couples

From 16 May, couples where one partner is aged above Pension Credit age and the other is aged under Pension Credit age, will no longer be able to make a new claim for Pension Credit.  Instead they will have to claim Universal Credit.  Mixed aged couples on Pension Credit can continue to remain on Pension Credit as long as they continue to satisfy the other qualifying conditions for Pension Credit.

From April 2018, there will no longer be a "Support for Mortgage Interest" benefit.

Instead you will be invited to apply for a loan which will be repair upon the sale of your house or by repayment when you begin work.

Employer Childcare Vouchers will no longer be available to new claimants

From April 2018, you will not be able to make a new claim for Employer Supported Childcare.

If you already claim Employer Childcare Vouchers you can do so until:

  • your child is aged 15, or aged 16 if disabled

or 

  • if you start claiming under another scheme, such as Childcare element of Working Tax Credit, Childcare element of Universal Credit or Tax Free Childcare

What if I want to talk to someone about these changes?

Contact our team, telephone 01522 873355, or visit City Hall in person.

If you can't find what you're looking for visit our contact us page for a number of options which may help.