Welfare reform update
There have been major changes to the benefits system over the last few years. They include the benefit cap, the bedroom tax and the rollout of universal credit.
- Universal credit
Universal Credit (UC) is acombination of six benefits rolled into one. It means you get one monthly payment from the government paid directly into your bank account. It’s then down to you to budget and make sure you have enough money to pay all your bills (including your rent) each month. The claim process is done online and can take up to eight weeks to get your first payment.
UC is different for everyone. It’s based on whether you work or not and what benefits you are eligible for.
Universal credit is being rolled out in stages across the country by the government. You can check when UC comes to your area. It needs to be claimed online. In order to do this you must first set up an online account.
For more information on how to make a claim, go to our FAQs.
- Housing capping
As part of welfare reform, the Department for Work and Pensions (DWP) is making more changes to housing benefit.
If you signed a new tenancy after April 2016, or are on Universal Credit (UC) then, from April 2019, the amount of money you receive to help with your housing will be capped at the same level that you would receive if you lived in private rented accommodation. You can check how much you could receive here.
The maximum amount you’ll be paid towards your rent will depend on how many rooms you are eligible for, rather than how many you actually have. For example, if you are under 35 and single, you’ll only receive support for the amount it would cost to rent a room in a shared house, not for a one bedroom property.
Although 2019 may seem like a long way off, the cap will impact you if you intend to move or sign a new tenancy agreement. This may happen if your old tenancy agreement expires or you have a relevant change in your circumstances.
Unlike many other reforms, this also affects pensioners. For more information please get in touch we can help explain.
For more information on housing capping, go to our FAQs.
- Benefit cap
The benefit cap is a limit on the total amount of benefit income you could get if you are of working age.
It only affects you if you are getting housing benefit or Universal Credit. Then, if your income from certain benefits is over the cap, this may affect the amount of money you get to help pay your housing costs.
You can use the benefit cap calculator on the government website to see how the benefit cap affects you. There are different rates for the benefit cap: one for Greater London and one for the rest of the country.
The benefit cap is applied differently under Universal Credit (UC). This is because any childcare costs you get as part of UC aren’t counted when your benefit income is being worked out.
Limiting benefits to two children From April 2017, new claims for many benefits will be paid at the rate for a maximum of two children. There are exemptions for multiple births (twins, triplets etc). it’s also likely that many local authorities will change their local Council Tax Support schemes for working age claimants to include similar provisions. It’s important you keep your claim up-to-date. If you let it lapse, it’s likely you’ll have to make a new claim. That means you’ll lose any protection against this change.
Some people are exempt from the benefit cap. In other words, their benefit isn’t capped at a certain amount even if their benefit income is above the limit of the cap. For example, if you get working tax credit or attendance allowance, you will be exempt. For a complete list of who is exempt, go to FAQs.
We think about 500 customers will be affected by the reduced cap, so you’re not alone. Our advice services team are here to help support you.