Benefit welfare reform
New welfare reform changes
State pension age
State pension age for women will be accelerated from April 2016, so that it reaches 65 by November 2018; both men and women pension age will rise to 66 by April 2020. The planned increase to 68 will likely also be accelerated.
Ending of assessed income periods for state pension credits
Households on Pension Credit will need to report all changes in their circumstances that will affect their benefit as they happen. Pensioners aged 75 and over who have an indefinite assessed income period in place will not be affected.
New state pension
From 6 April 2016 the new State Pension replaces the existing state pension for men born on or after 6 April 1951 and women born on or after 6 April 1953.
To get the new state pension your National Insurance (NI) record must have a minimum of 10 'qualifying years' of:
- NI contributions if you were working or self-employed, or
- NI credits if you were sick, unemployed, a carer or a parent, or
- voluntary NI contributions.
People who qualify for the new state pension cannot get savings credit pension credit but may be eligible for guarantee credit pension credit.
Free school meals
Free school meals will be introduced for all infant pupils (reception, year 1 and year 2) and some disadvantaged 6th form students.
Housing Benefit backdating
From April 2016 the maximum backdate period for people of working age will decrease to one month.
The Family Premium (for people with a child or children) will no longer apply in Housing Benefit from May 2016.
Anyone who makes an application for benefit or has a child on or after 1 May 2016 will not qualify for the premium.
People who qualify for the premium before May 2016 will continue to get it unless they make a new application for Housing Benefit.
Local Housing Allowance
Local Housing Allowance (LHA) rates are frozen for four years from April 2016 and will not increase above the rate that applied in April 2015; however, LHA rates can decrease below the rate that applied in April 2015 if local rents go down.
Temporary absences from the UK
The period of time for which Housing Benefit and Pension Credit will be paid for a claimant who is temporarily absent from Great Britain will be reduced from 13 weeks to 4 weeks. This legislation is due to come into force from 28 July 2016.
You should always tell the council to keep us up to date with any relevant changes.
You can find full details on the GOV.UK regulations web page.
There is currently a benefit cap in place restricting the amount in certain benefits that a working age household can receive. Any household receiving more than the cap has their Housing Benefit reduced to bring them back within the limit. This cap of £26,000 per year is to be reduced to £20,000 for those living outside London.
The reduction in the level of the cap is expected to be phased in during 2016/17 (i.e. it will start in different areas on different dates although no timetable has yet been given).
From 1st April 2016 the ‘waiting period’ for new claims for help with mortgage interest given through Income Support, Income-Based Jobseeker's Allowance, Income-Related Employment and Support Allowance, Universal Credit or Pension Credit will increase to 39 weeks (from 13 weeks), but the capital limit will remain at £200,000.
National Minimum Wage
The National Minimum Wage will be 'rebranded' as the National Living Wage and will be increased to £7.20 per hour for those 25 or over from April 2016. It will reach £9 per hour by 2020.
Personal tax allowance
The Personal Tax Allowance, the amount you can earn before paying income tax, will be increased from £10,600 to £11,000 from April 2016. It will be further increased to £12,500 by 2020 and thereafter it will automatically be set at the same level as 30 times the National Living Wage (National Minimum Wage).
From April 2016 there will be a four-year freeze to working age benefits; Pensioner benefits will be excluded from this benefit freeze and will be protected.
You can find full details on the GOV.UK web page under section 6.7.
Universal Credit: childcare element
From April 2016 the childcare element in Universal Credit will be worth 85% of eligible costs. This is planned to be phased in from April 2016 as childcare support moves from tax credits into Universal Credit. Further details will be set out in future spending reviews.
Universal Credit: work allowance and earnings threshold
Universal Credit work allowances will be reduced to £4,764 for those without housing costs, £2,304 for those with housing costs, and removed altogether for non-disabled claimants without children. 2015/1649
The level of earnings at which a household’s Universal Credit award starts to be withdrawn for every extra pound earned (income threshold reduction) will be reduced from £6,420 to £3,850.
Decrease in tax credit income disregard to £2,500
The amount by which a tax credit claimant’s income can increase in-year compared to their previous year’s income before their award is adjusted (the income rise disregard) will be reduced to £2,500. Currently, the first £5,000 of any income increase is disregarded when calculating an award.
Universal Credit and Housing Benefit child restriction
In households with two or more children any subsequent children born after April 2017 will not be eligible for further support. Equivalent changes will be made to the Universal Credit and Housing Benefit rules.
Housing Support to be restricted for young people
From April 2017, claimants out of work aged 18 to 21 making a new claim will no longer be automatically entitled to Housing Support for new claims in Universal Credit. This measure will not apply to parents whose children live with them, vulnerable groups, and those who were living independently and working continuously for the preceding 6 months.
Local Housing Allowance rules to be extended to the social sector
The rate of housing benefit in the social sector will be capped at the relevant local housing allowance rate, aligning the rules to that of the private sector.
This will apply to tenancies signed after 1 April 2016, with housing benefit entitlement changing from 1 April 2018 onwards.