Please note that information about some of these changes may be limited at present and also subject to further change. Although some will happen quickly, others may be introduced gradually over several years.
If you are worried about how you may be affected you should discuss this with a benefits adviser. You can use our Find an Adviser tool to find one in your area.
Changes to benefits in 2016
Universal Credit (UC) - Roll out
Current plans will see new claims to existing benefits being replaced by UC during 2016. This will mean that all new benefit claimants across the country will claim Universal Credit instead of the benefits it replaces. Progress on these plans is still slow at present as not all areas are yet under the UC system.
Roll-out to the full UC digital service will also gradually take place which will allow new claims from all claimant types. The government expects this process to be completed in September 2018.
The Government currently believes that existing benefit claimants will be moved over to the full UC service from July 2019 and the process will be completed by March 2022.
Tax Credits Digital Update Service
HMRC have launched a new digital service for tax credits customers that allows them to check their next tax credits payment details online.
HMRC will continue to update the service over the coming months to allow customers to report changes in their circumstances online instead of having to phone in. Future release date to be confirmed.
PIP Assessment Change Announced in March 2016 Budget
The Government announced in the budget a proposed change to the assessment process for Personal Independence Payment (PIP).
The proposed change would see a reduction in the number of assessment points that can be awarded for needing to use an aid or appliance to carry out two of the ‘daily living’ activities which are assessed.
The change is planned to be implemented for new cases and re-assessments from January 2017. It would mean that people who would have scored points for use of aids and appliances may in some cases no longer qualify for PIP.
UPDATE: Government confirmed on 21 March 2016 that it will not proceed with the planned change to Personal Independence Payment.
April 2016 Changes
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.
The Government has also proposed raising the State Pension age from 66 to 67 gradually between 2026 and 2028.
See the Turn2us State Pension age changes information.
New Single Tier Pension
The Government is introducing a flat rate (single tier) State Pension for people who reach state pension age from 6 April 2016.
The new single tier pension will be a flat rate without the additions and complexities of the current system, and without the right to inherit or get rights to a pension on the basis of your spouse or civil partner's contributions.
The rate will be £155.65 per week which is more than the basic means-tested support currently available (the guarantee part of Pension Credit)
To qualify for the full single tier pension you will need 35 qualifying years of National Insurance contributions (NICs) or credits.
If you don't qualify for the full pension you can get a smaller amount based on how many qualifying years you have.
You will usually need ten qualifying years to get any new state pension.
If you qualify for the new single tier pension you will not be able to get the Savings Credit part of Pension Credit.
If you are already over State Pension age when the New State Pension is introduced you will continue to receive your Basic State Pension under the current system and can continue to get the Savings Credit part of Pension Credit if you are entitled to it.
The Savings Credit will not however be available to couples where one reaches pension age before 6 April and the other after this date, unless one of the couple was already getting Savings Credit immediately before 6 April 2016 and has been entitled to it at all times since 6 April 2016.
As part of a campaign to raise awareness of the single-tier state pension, the DWP says that a statement service will provide people with a personalised written estimate of what they can expect to receive under the new system based on their national insurance contributions and work history to date.
The statement service will initially be available to the approximately 2.5m people who reach state pension age in the first five years of the new scheme (April 2016 and August 2021).
For more information, see the Age UK information on What the new pension reforms mean for you.
Universal Credit - Childcare element
An additional £200m of support will be provided within Universal Credit, which is equivalent to covering 85% of childcare costs for households qualifying for the Universal Credit childcare element where the lone parent or both earners in a couple pay income tax.
This is planned to be phased in from April 2016 as childcare support moves from tax credits into Universal Credit. Details will be set out in future spending reviews.
Freeze on Working-age benefits
From April 2016 government plan to introduce a four-year freeze to working age benefits whilst still protecting pensioners, and benefits related to the extra costs of disability. See Summer Budget 2015 page
New National Living Wage
From April 2016 New National Living Wage will be introduced- starting at £7.20 an hour for workers aged 25 and above. Rising to £9.00 an hour by 2020. See Summer Budget 2015 page
Personal Tax Allowance Increased
The tax free Personal Tax Allowance, the amount you can earn before paying income tax, will be increased from £10,600 to £11,000 from April 2016. See Summer Budget 2015 page
Reduction in Income Rise Disregard in Tax Credits
From April 2016 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) will be reduced from £5000 to £2,500 as announced in the Summer Budget 2015. See Summer Budget 2015 page.
Cut to in-work Tax Credits
From April 2016, the income threshold limit - the level of earnings at which a household’s tax credits and Universal Credit award starts to be withdrawn for every extra pound earned will be reduced from £6,420 to £3,850. See Summer Budget 2015 page
Tax credit taper – The rate at which a person’s or household’s tax credit award is reduced will be increased from 41% to 48% . See Summer Budget 2015 page
Update - U-turn on cut to in-work Tax Credits:
On 25th November 2015 the Chancellor in the combined Autumn Statement and Spending Review announced that the tax credit income threshold and taper rate changes described above would in fact not go ahead. The u-turn was in response to strong public opposition and a House of Lords vote in October 2015 suggesting that the tax credit changes should be delayed and transitional protection considered for those affected.
From April 2016 the tax credit income threshold will remain at £6,420 and the taper rate will also remain at 41% of gross income.
Universal Credit Work Allowances
Universal Credit work allowances will be 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. See Summer Budget 2015 page
Limiting backdating in Housing Benefit
From April 2016, Housing Benefit claims will be backdated for a maximum of one month ( period was previously six months ).
Reduction in Social Sector Rents
The government will reduce rents paid by tenants in social housing in England by 1% a year for 4 years from 2016.
Freeze to Local Housing Allowance
There will be a four-year freeze to Local Housing Allowance rates for 4 years from 2016-17 to 2019-20.
Support for Mortgage Interest(SMI) Waiting Period Increased
From 1 April 2016, the SMI waiting period will change from 13 weeks and will return to the pre-recession length of 39 weeks, but the capital limit will be maintained at the higher level of £200,000.
Removal of Pension Credit Assessed Income Period
From 6 April 2016 households on Pension Credit will now 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 by the change unless the assessed income period would end under current rules. For more information see GOV.UK Pension Credit factsheet
Removing Housing Benefit Family Premium
Housing Benefit family premium will be withdrawn for new claims in England, Scotland and Wales from 1 May 2016. See Summer Budget 2015 page .
Housing Benefit and Pension Credit: limiting temporary absence
The government will delay the ending of the payments of Housing Benefit and Pension Credit to claimants who travel outside of Great Britain for longer than four weeks (with no gap). This will now come into force in May 2016.( rather than April) See Budget March 2016 guide
From 24 May 2016, the DWP is sending out notifications to tenants likely to be affected by the changes to the benefit cap levels to be introduced from Autumn 2016. The letters are expected to detail the likely impact of the changes and the advice and support that is available from Job Centres and Councils.
The Benefit Cap will be introduced in Northern Ireland from 31 May 2016. Potentially affected households will be contacted in advance by letter.
The government in the 2015 summer budget put forward proposed plans to reduce the Benefit Cap for families to £23,000 in London (£15,410 single claimants) and £20,000 elsewhere (£13,400 single claimants).
The new benefit cap levels will come in from 7 November 2016 .
Exemptions from the benefit cap for more groups
The government also announced in the March Budget 2016 that it will introduce exemptions for people getting Guardians Allowance, Carer’s Allowance and the carers element of Universal Credit from the benefit cap from autumn 2016.
See March 2016 Budget guide page
Removing Housing Benefit Family Premium in Northern Ireland.
Housing Benefit Family Premium will be withdrawn for new claims in Northern Ireland from 5 September 2016. This is in line with the rest of the UK.
Reducing the Backdating Period for Housing Benefit Claims in Northern Ireland
From 5 September 2016, the maximum period for which Housing Benefit claims may be backdated for working age claimants in Northern Ireland has been reduced from six months to one month. This is in line with the rest of the UK.
Universal Credit to be a qualifying benefit for Healthy Start Food Voucher Scheme
From 1 November 2016, Universal Credit will be a qualifying benefit for the Healthy Start Food Vouchers scheme, if your family’s net earnings are £408 or less per month. Healthy Start is a voucher scheme for women who have young children or who are pregnant and receiving certain benefits.
Benefit Cap Reduction
From 7 November 2016, the Benefit Cap has been reduced for families to £23,000 in London (£15,410 single claimants) and £20,000 elsewhere (£13,400 single claimants). People getting Guardian's Allowance, Carer's Allowance and the carer's element of Universal Credit are exempt from the Benefit Cap from 7 November onwards.
Last Updated: November 2016