Benefit welfare reform
New welfare reform changes
State pension age
State pension age for women was accelerated from April 2016, so that it reaches 65 by November 2018; both men's and women's 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 replaced 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 decreased to one month.
The Family Premium (for people with a child or children) no longer applies in Housing Benefit from May 2016.
Anyone who makes an application for benefit or has a child on or after 1 May 2016 does 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 can be paid for a claimant who is temporarily absent from Great Britain has reduced from 13 weeks to 4 weeks. This legislation came 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 reduced to £20,000 for those living outside London.
The reduction in the level of the cap was phased in during 2016/17 (i.e. it started 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 increased to 39 weeks (from 13 weeks), but the capital limit remained at £200,000.
National Minimum Wage
The National Minimum Wage was 'rebranded' as the National Living Wage and 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, 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 is a four-year freeze to working age benefits; Pensioner benefits is 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 is worth 85% of eligible costs. This was 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 is 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) was reduced to £2,500. Currently, the first £5,000 of any income increase is disregarded when calculating an award.
ESA Work-Related Activity component (WRAC) abolished
From 3 April 2017, new ESA claimants who are placed in the Work-Related Activity Group receive the same rate of payment as those claiming Jobseeker’s Allowance and the equivalent in Universal Credit. Where no WRAC is awarded in ESA, no equivalent component is awarded in Housing Benefit (HB). This maintains the policy that the HB applicable amount should reflect the structure of ESA. See GOV.UK ESA changes for more details.
Housing Support to be restricted for some young people (18-21 year olds) claiming Universal Credit
This change affects 18-21 year olds whose Universal Credit claim is under the ‘full’ (digital) service and who take on a new tenancy from April 2017 onwards. This change does not affect Housing Benefit claims.
From April 2017 there is no automatic entitlement under the 'full' (digital service) to help with rent for 18-21 year olds who are out of work and who request help towards their rent as part of their Universal Credit claim.
However, the government has said it will ensure that certain groups are still be able to get help with their housing costs, including where the claimant -
- is responsible for a child or a qualifying young person;
- was a care leaver before reaching the age of 18;
- receives the care component of disability living allowance at the middle or highest rate or the daily living component of personal independence payment;
- has been subject to, or threatened with, domestic violence by their partner, former partner, or a family member;
- cannot live with their parents due to a serious risk to their physical or mental health and the Secretary of State considers it inappropriate to expect them to do so;
- has earned income equal to or exceeding the monthly amount they would earn whilst working 16 hours per week at the National Minimum Wage; or
- has earnings in each of the 6 months ending before the calendar month in which the claim for universal credit is made, that are equal to or more than the appropriate earnings threshold (in which case a six-month exemption will apply).
In addition, savings provisions provide that exclusion from help with housing costs will not apply to claimants -
- in receipt of housing benefit or universal credit in live service areas;
- receiving help with housing costs from housing benefit or the universal credit live service immediately prior to a move to full service; and
- in full service areas, whose award of universal credit includes the housing costs element when the regulations come into force, but only until a break in entitlement to universal credit or the housing costs element.
Even if they are claiming Universal Credit, 18-21 year olds who are in certain types of supported accommodation will get help with their rent through Housing Benefit rather than through Universal Credit.
Since 2013 the government has not allowed the council to pay full Housing Benefit to anyone of working age if they are under-occupying a property.
However, from April 2017 the regulations now allow an extra bedroom:
- when a disabled child or disabled non-dependant adult requires, and has, overnight care from a non-resident carer (or group of carers)
- when a couple are unable to share a bedroom because of their disabilities
These new regulations apply in both the private rented sector and social rented sector.
Changes to Child Allowance in Housing Benefit
The government has published regulations to introduce a two child limit into Housing Benefit, Child Tax Credit and Universal Credit from 6th April 2017.
The regulations restrict the number of children or qualifying young persons in respect of whom the Child Element in Housing Benefit, Universal Credit* and the Individual Child Element in Child Tax Credit is payable to a maximum of two.
*Universal Credit is not yet ready for the change so if someone claims UC and they have 3+ children they will be directed to claim Tax Credits and Housing Benefit.
The council must use the Child Tax Credit decision to base their decision on whether to include a third or subsequent child in the Housing Benefit applicable amount.
2 Child Transitional Relief
Will give protection to all dependants who are on the claim as at 5th April 2017, so they will retain the same number of dependant additions. This applies to claims made after this date but whose entitlement commences on or before this date.
Proposed exceptions to third or subsequent children
- Multiple births
- Children living long-term with family or friends
- Adopted from local authority care
- Children likely to have been conceived non-consensually
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.