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 Help with Housing Costs section.
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.
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) - Discretionary Housing Payments
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.
Housing Benefit - Local Housing Allowance
Local Housing Allowance rates will be frozen ahead of the April 2013 change when rates will no longer be linked to market rents.
Further changes to the way Tax Credits are calculated so that the credit is withdrawn faster as income rises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. (Update: 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
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.
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.
Automatic enrolment into pensions
Automatic enrolment into pensions starts. This is a new law that the Government has introduced to make it easier for people to save for their retirement. It requires all employers to enrol their workers into a qualifying workplace scheme if they are not already in one. For more information, see the Pensions Advisory Service website (link opens in a new window).
Civil penalties and overpayments on benefits or tax credits
From October 2012, a civil penalty may apply if you are overpaid a benefit and:
you have negligently given incorrect information or evidence, and
you fail to take steps to rectify the error, and
the error causes an overpayment, or
you fail to provide information or evidence or fail to notify a change in your circumstances without a reasonable excuse.
Read our Overpayments: benefits and tax credits information guide
Read our Fraud investigations: benefits and tax credits information guide
New payment system replaces benefits cheques
A new 'Simple Payment'(link opens in a new window) service was introduced on 8 October 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.