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Benefit Changes Timetable

You can read through this information sheet, or go directly to the sections you want to read by clicking on these links:

Introduction

2012

• January 2012
• April 2012
• May 2012
• Summer 2012

2013

• January 2013
• April 2013
• October 2013

2016

Archive:

2011 Benefit Changes

Further detail on:

• Personal Independence Payment (PIP)
• Reassessment of incapacity benefits
• State Pension Age changes
• Universal Credit

Introduction

In 2010 the Government announced several cuts to welfare spending to make welfare more affordable, bringing the total welfare savings to £18 billion per year by 2014-15.

If you are worried about the effects that the changes to the benefits system will have on your personal situation, we recommend that you discuss this with an expert benefits adviser. You can use the Find an Adviser tool on our website to find a local one.

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Benefits Changes 2012

January 2012

Housing Benefit

Change: the age threshold for the shared accommodation rate of Local Housing Allowance (LHA) will be increased from 25 to 35.

This means that single claimants up to the age of 35 will have their LHA based on a room in a shared property rather than a self contained one bedroom property. There will be exceptions for some disabled claimants, certain people who have previously been homeless, and ex-offenders who could pose a risk to the public.

• This change will apply for all new claimants from 1 January
• For existing pre April 2011 claimants this change will take effect when their 9 month protection period from the April 2011 changes ceases so they experience all relevant changes in one go
• Existing claimants whose claims were made between 1 April 2011 and 1 January 2012 will be moved to the shared accommodation rate on the anniversary date of their claim

For more information on Housing Benefit, see our information sheet HB (England, Scotland, Wales) or HB (Northern Ireland).

Support for Mortgage Interest

Change: temporary changes to the Support for Mortgage Interest Scheme which were due to come to an end in January 2012 will be extended until January 2013. These include a reduced waiting period of 13 weeks and an increase in the eligible mortgage capital limit to £200,000.

For further information on Support for Mortgage Interest, see our Homeowner housing costs help page.

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April 2012

Benefit rates 2012/13

See the Directgov website for benefit rates for 2012-2013 (link opens in a new window).

Child Benefit rates were frozen for three years from 6 April 2011 so these will stay the same.

Rates for the savings credit part of Pension Credit have been reduced.

Crisis Loans

Change: The maximum rate of a Crisis Loan, for single non-householders, will be 30% of the appropriate benefit personal allowance rate. The maximum rate for householders or people who are homeless will still be set at 60% of the appropriate benefit personal allowance.

Housing Benefit (HB)

Changes:

• A further £40million per year will be added to the Discretionary Housing Payment budget. £10 million was added in April 2011.

Further information on Discretionary Housing Payments.

• Local Housing Allowance rates will be frozen ahead of the April 2013 change when rates will no longer be linked to market rents.

Tax Credits

Changes:

• Further changes to the way Tax Credits are calculated so that the credit is withdrawn faster as income rises
• 50+ element removed from Working Tax Credits (WTC)
• If your income falls by up to £2,500 during the Tax Credit award year, the amount you get will not be revised to see if you are entitled to a higher Tax Credit payment.
• You will only be able to backdate new applications and changes of circumstances for up to one month instead of three.
• Increase of child element by £110. This change was scrapped as part of the Chancellor's Autumn 2011 Statement
• Couples with children must work at least 24 hours a week between them, with one working at least 16 hours to qualify for WTC. However, couples with children where one person works at least 16 hours and is entitled to the WTC disability element or is aged 60 or over will still qualify for WTC. Also, couples with children will continue to qualify for WTC if only one member of the couple works at least 16 hours per week and the other is incapacitated, an in-patient in hospital or in prison.

Update: Changes announced in the Budget 2012 will mean that a couple will also continue to receive Working Tax Credits as long as one partner works 16 hours a week and the other is entitled to Carer’s Allowance. In this circumstance they will also qualify for help with childcare costs.

For further details see Tax Credit Changes April 2012

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May 2012

Contributory Employment and Support Allowance

Change: From 1 May people in the Work Related Activity Group of Employment and Support Allowance (ESA) will have their claims limited to one year. They will have their family income and savings assessed to see if they qualify for the means-tested version of the benefit. Any time already spent in receipt of contributory ESA whilst in the work related activity group will count towards the one year time limit so some claims will end on 30 April.

Change: Contributory ESA in youth to be abolished. Existing claimants will have their entitlement limited to one year from the time their entitlement began, disregarding time in the support group so some claims will end immediately once this change comes in.

Income Support

Change: From 21 May 2012, if you are claiming Income Support as a lone parent and your youngest child is aged five or over, you will need to move from Income Support to Jobseeker's Allowance.

Those lone parents with a health condition or disability which limits their capability for work may be able to claim Employment and Support Allowance (ESA) instead.

Summer 2012

New payment system will replace benefits cheques

A new 'Simple Payment' service will be introduced to replace the benefit cheques system for claimants who can't be paid by direct payment (link opens in a new window) because they are unable to open or manage bank or Post Office card accounts.

Under the new system, claimants will be issued with a reusable 'Simple Payment' card so that they can receive their benefits at 'PayPoint' outlets located in local newsagents, convenience stores, supermarkets, garages and off licences.

Arrangements have been put in place for people who need someone else, such as a partner or relative, to collect their benefit for them. Either the claimant's card or an additional card can be used.

Those affected will receive a welcome pack with full details.

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Benefit Changes 2013

January 2013

Child Benefit

Change: As part of the Budget (21 March 2012), the Chancellor announced that:

• Child Benefit will be withdrawn where someone in the household has an income of more than £50,000.
• Child Benefit will be withdrawn at 1% for every £100 earned over £50,000 to avoid a 'cliff edge' effect.

Although this proposal will mean more families can keep all or some of their Child Benefit it does not resolve the 'unfairness' issue between single income and two income families:

• A single income family with earnings over £50,000 will lose some or all of their Child Benefit
• A couple where both earn up to £50,000 (potential joint income of £100,000) will keep their Child Benefit 

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April 2013

Council Tax Benefit

Change: Council Tax Benefit is to be replaced by localised support for Council Tax. Local authorities will set up new schemes to support people in their own areas within a 10% reduced budget. This will only affect people of working-age who currently receive Council Tax Benefit.

Further details about localising support for Council Tax.

Disability Living Allowance (DLA)

Change: The government is to replace DLA with a new benefit called Personal Independence Payment (PIP).

This will involve the introduction of ‘objective assessments’ to decide eligibility. The stated intention is to target support on those most in need through this new benefit.

The government is hoping for a 20% reduction in expenditure by 2017 by bringing in this process. All working-age claimants will be reassessed.

Housing Benefit (HB)

Changes:

• Size criteria will apply in the social rented sector (eg council and housing association properties) replicating the size criteria that applies to Housing Benefit claimants in the private rented sector under the Local Housing Allowance rules. This means that people living in houses larger than they need (under-occupiers) will have to move to somewhere smaller or make up the difference in rent because their Housing Benefit will be reduced:
       14% cut in Housing Benefit if you under-occupy by one bedroom

       25% cut in Housing Benefit if you under-occupy by two or more bedrooms

  This is only for working-age people but it is expected to affect 670,000 social sector tenants.

• LHA rates will be increased in line with the Consumer Price Index instead of the market rents in each area. The connection with actual rents will be lost.

For more information on Housing Benefit, see our information sheets HB (England, Scotland, Wales) HB (Northern Ireland).

Social Fund

Changes:

• Crisis Loans when waiting for benefit claims to be processed, and Budgeting Loans are to be replaced by a 'payment on account' system
• Other Crisis Loans and Community Care Grants are to be abolished with the budget being passed to Local Authorities who may or may not introduce their own system of assistance - there is no requirement for them to do so.

Tax Credits

Change: Any rise in income of £5,000 or more during the award year will be taken into account when finalising your Tax Credit award. Previously only income rises of £10,000 or more were taken into account.

Benefit Cap

As part of the Welfare Reform Act there will be a cap on the amount of benefits a working-age household can receive, capped at the level of the average earnings of a working family.

See our Benefit Cap information sheet for further details

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October 2013

Universal Credit

The current complex system of working-age benefits and Tax Credits is to be replaced by a new benefit called Universal Credit. The process of moving existing claimants on to Universal Credit will be gradual and should be completed by October 2017.

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Benefit Changes 2016

April 2016

State Pension Age

Proposed Change: Plans to bring women’s pension age in line with men’s will be sped up from April 2016 so that women’s pension age reaches 65 in November 2018.

Pension age for men and women will then increase to 66 from December 2018 to April 2020.

Update: The Pensions Bill has been amended after concerns that some women would have to wait for up to an extra two years to collect their pensions. The proposed rise in the state pension age to 66 by 2020 is to be delayed by six months, from April 2020 to October 2020 capping the increase at a maximum of 18 months.

See our guide to the State Pension age changes.

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Updated 5 April 2012