Benefit changes Facebook Q&A

Thank you to everyone who sent us their question for our live Facebook and Twitter Q & A on the government’s changes to the benefits system. Here are your questions and our answers.

If someone doesn’t get their Housing Benefit backdated, which may leave them with rent arrears, what support is available?

Please contact our income team who will support Catalyst residents in coming up with an affordable and realistic rent repayment plan. You can also apply for Discretionary Housing Payment which is awarded at the discretion of your local authority. The income team can also support you with your application. If the backdated Housing Benefit claim relates to an error or delay on the part of your local authority, they should backdate this period fully.

What are the recent raft of welfare reforms that were announced in the last budget?

There were a number of changes starting from April 2016.

  • The benefit cap is being lowered. For families living in London it has been reduced to £23,000 and for families living outside of London is will be £20,000. For single people the benefit cap has reduced to £15,410 in London and £13,400 outside of London. It will be crucial for people affected by the benefit cap to secure employment so they can be exempt from this.
  • Housing Benefit will only be backdated for four weeks – it can currently be backdated for up to six months. It will be very important for tenants to submit their Housing Benefit claims as soon as they can.
  • The government has also proposed that social housing tenants with an individual or household income of over £40,000 in London and over £30,000 outside of London pay a higher rent. This will be higher what they currently pay.

See our summary of the government’s benefit changes for more information.

How will Tax Credits change?

From April 2017 Child Tax Credit will be limited to the first two children. Any further children will not be eligible to receive this benefit. Earning thresholds (the point at which benefits are reduced) for Working Tax Credit is being reduced from £6,420 to £3,850. The taper rate or the rate at which the benefit is reduced is also increasing from 41% to 48% or 48p in every pound earned over this threshold. All of this will put household incomes under pressure.

We’re hearing a lot about Right to Buy. When will people be able to buy their housing association homes?

The Right to Buy scheme is still subject to consultation. It will be some time before a working scheme emerges and until then we cannot say who will be eligible. Once we know more, we’ll keep you updated on our website and residents’ magazine.

I’m looking for permanent work but finding it hard to budget on a zero-hours contract. How will the welfare reforms affect me?

Universal Credit is designed to help those in and out of work with fluctuating incomes. Claimants will not have to resubmit a benefit claim every time there is a change in their circumstance, as is the case under current benefit rules. Universal Credit operates alongside Real Time Information which is administered by HM Revenue & Customs to record the number of hours someone works and the salary they are paid. When this system is fully in place and operating, it will automatically update the Department for Work & Pensions and the Universal Credit payments system. Universal Credit also offers personal budgeting support to every claimant. Further assistance is also offered with alternative payment arrangements if the tenant experiences problems with paying their rent. Catalyst Gateway (our community development team) can also help you if you need help looking for work and budgeting advice. Our Do$h+ project will help you become more confident in, and more aware of how to take control of your finances.

How will I know whether I’ve been put onto Universal Credit?

The Department for Work & Pensions will write to everyone letting them know they have to complete an online Universal Credit application. Currently Universal Credit is being rolled out to single people with no children, who have recently become unemployed. Couples and families will be the next group to move onto Universal Credit (from 2016) and when this happens the Department for Work & Pensions will also write to them. Landlords will only receive a notification from the Department for Work & Pensions that a Universal Credit application has been made and will provide no further information. So it’s really important that tenants keep us informed about their claim. We rely on these updates to make decisions on cases and failure to contact or stay engaged with Catalyst could lead to actions being taken against the tenant.

I am 19-years-old with two children. I’ve heard benefits are going to change for my age group and rely on Housing Benefit to keep a roof over our heads. How will I be affected?

Benefits are changing for young people aged 18-21. Anyone within this age range who moves onto Universal Credit from April 2016 will no longer be eligible for housing costs (Housing Benefit) and will be expected to undertake a youth obligation for six months. During this time they’ll need to secure work, an apprenticeship, further training or go into a mandatory work placement. However, there are exceptions for single parents with children under 18-years-old who are living with the claimant. Vulnerable people are also exempt.

Can you explain how the government intends to ‘make work pay’ under the Universal Credit regime, and are there limits to this?

Universal Credit has higher earnings disregards, so you can earn more before it has an impact on your benefits being withdrawn. Universal Credit also has a single taper rate of 65% – this is the rate at which any income is reduced once you go over the variable income thresholds under Universal Credit. This will simplify the process and the numerous taper rates that currently exist. Universal Credit is still being developed and the recent announcement of further changes to other benefits, such as Tax Credits being reduced, may add further complexity to Universal Credit and the key aim of making work pay more than benefits may be weakened. If you’ve been affected by the benefit changes, please contact our income team on 0300 456 2099 (London customers) or 0300 456 2090 (south east customers). For more information, please visit the benefit changes section of our website.