Other benefit changes

Details of the benefits affected by the government’s overhaul of the benefits system.

Existing Changes

Claimant Commitment

New claimants who apply for Jobseeker’s Allowance now need to sign a Claimant Commitment, which sets out what they need to do to receive their benefit.

Work coaches will help claimants set out a detailed statement of what they will do to find work using a new personal work plan. Claimants will also use the plan to record what they have done. They will renew their Claimant Commitment on a regular basis.

Claimants will have to provide evidence to prove they have met the requirements in their Claimant Commitment. Those who fail to do so without good reason risk losing their benefits.

Council tax benefit

Council tax benefit has been replaced with local council tax support schemes. Under the new system, each council has a pot of money to share out between people who may need help.

This means people of working age on low incomes will have to contribute towards their council tax. The amount they’ll need to pay is different in each borough, as each council has set its own rules in line with local needs. Contact your local council for more details.

Non-dependent deductions

If you live with people who are over 18, not in education but who are working or claiming benefit further deductions will be taken from your housing benefit. The amount will depend on how much money the person(s) is earning.

Adults living in your household are expected to give you money to cover their portion of the rent. If they don’t give you this money, it’s your responsibility to pay your rent in full.

£50 civil penalty

Changes in your circumstances can affect your benefits such as getting married, moving abroad or receiving a pay rise. If you don’t report them and get overpaid as a result, you may have to pay a £50 civil penalty.

You will also have to pay back the money you were overpaid. If you were paid too much housing benefit, the money will be taken out of your future housing benefit payments – leaving you with a shortfall. You’ll then need to pay Catalyst the difference.

If you think you’re getting more benefits than you are entitled to, or if your circumstances change, please tell Job Centre Plusthe Pension Service or your council.

Personal Independence Payments

Disability Living Allowance has been replaced with Personal Independence Payments. This benefit helps towards some of the extra costs arising from long-term ill health or disability. It’s based on how a person’s ill health or disability affects them.

Under 16s will continue to receive Disability Living Allowance and over 65s will continue to claim attendance allowance. New claimants will get Personal Independence Payments including whose circumstances change.

Changes from April 2016

Housing Benefit

Housing Benefit claims will be backdated for a maximum of 4 weeks. Previously it could be backdated for up to six months.

Those going abroad

Housing Benefit and Pension Credit payments will be limited to four weeks for claimants who go outside of the UK from April 2016. This change will make sure that the benefits system is not paying the rent of people who go abroad for more than four weeks at a time.

Benefit and Tax Credit rates

From April 2016 benefit and Tax Credit rates will be frozen and not up-rated for working-age benefits. This freeze excludes disability, pensioner and statutory benefits.

Employment and Support Allowance

This is paid to people unable to work due to health or disability issues, and under pension age, and not receiving Job Seeker’s Allowance. Employment and Support Allowance will be reduced from April 2016 and kept in line with the rate paid for Job Seekers Allowance.

Minimum wage

From April 2016, the national minimum wage will be called national living wage. It will increase to £7.20 per hour for those aged over 25 and will rise to £9 per hour by 2020.

Personal tax allowance

This is the amount you can earn before you start paying income tax. From April 2016 it will increase from £10,600 to £11,000. By 2020 it will rise to £12,500.

Removal of family premium in Housing Benefit

The family premium makes up part of the Housing Benefit award and is paid to couples and lone parents with dependent children. It is worth £17.45pw and will be removed from new claimants from April 2016.

Reduction in social rents

In the July 2015 budget, the government announced that there will be a 1% reduction of social rents each year for the next four years from April 2016 through to 2020.

A third of households who live in social housing (homes owned by a council or housing association) and who pay their own rent, will see a £12 reduction off their average weekly rent. The remaining two thirds of tenants who claim housing benefit to cover their rent will experience no impact or change.

Local Housing Allowance rates

In its 2015 Spending Review the government announced that it will introduce a cap on the amount of rent Housing Benefit will cover in the social rented sector. This will be capped to the relevant Local Housing Allowance for new tenancies signed on or after 1 April 2016 with Housing Benefit entitlement changing from April 2018. This includes the shared accommodation rate for single people aged under 35 years.

Future benefit changes

Housing Benefit

From May 2016 the family premium in Housing Benefit (currently £17.45 if a claimant has one or more dependent children) will be removed. This will affect new claims as well as new births from 1 May 2016.

Working Tax Credit

From April 2017 earning thresholds for Working Tax Credit will be lowered from £6,420 to £3,850. It is estimated this will affect 3 million households.

Child Tax Credit

From April 2017 new claimants of Child Tax Credit or the child element of Universal Credit will only be able to claim for their first two children. Existing claimants won’t be affected unless their circumstances change from April 2017 and they need to submit a new claim.

Coupled with this, the first child premium (a higher rate) will be removed.  The family premium within Housing Benefit is also being removed from April 2016.

Free childcare for 3 and 4-year-olds

This will be doubled from 15 to 30 hours per week from April 2017/18.