- The tax credit income threshold of £6,420 and taper rate of 41% of gross income will no longer change from April 2016.
- 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 to £2,500 as announced in Summer Budget 2015.
- No further changes to Universal Credit threshold and taper amount, However, 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
- Jobseeker’s Allowance claimants will have to sign on for their benefit every week for the first three months and a more intensive support element of the Help to Work programme currently in place for the long-term unemployed will be brought forward.
- Government will introduce a new Work and Health Programme which will provide specialist support for claimants with health conditions or disabilities and those unemployed for over 2 years
- Increase in funding to help those with disabilities and health conditions return to, and remain in, work
- Housing Benefit and Pension Credit will not be paid to people who have left the country for more than four weeks from April 2016. At present, Housing Benefit recipients can go abroad for up to 13 weeks while continuing to receive Housing Benefit.
- Capping Housing Benefit (HB) for social housing tenants to the same Local Housing Allowance maximum rates for HB as those in the private rented sector, including the Shared Accommodation Rate for single claimants aged under 35 without dependent children. The cap will apply from 1 April 2018 but only to tenancies signed after 1 April 2016
- Local councils will receive direct payment from government for management of temporary accommodation for the homeless rather than a per household basis management fee.
- The single rate of the Pension Credit Standard Minimum Guarantee will increase by £4.40 to £155.60 per week in April 2016,
- From April 2016, the basic State Pension will rise to £119.30 per week, an increase of £3.35.
- New Single Tier State Pension introduced from April 2016, rate will be £155.65 per week.
- For the extended free childcare provision, doubling of hours from 15 to 30 hours per week for three and four year olds from September 2017, families will now also be required to work more than 16 hours (for at least the National Living Wage) and must not have an income per parent above £100,000.
- Student nursing,midwifery and allied health subjects funding grant will be replaced by loans.
- Student maintenance grants will be replaced by loans. Part-time students will also be able to apply for the loans.
For further information see the GOV.UK Autumn Statement and Spending Review Guide 2015
Please note: The measures announced could be subject to further changes
Working age benefits rates will be frozen for the next four years from April 2016 (this does not include Disability Living Allowance, Personal Independence Payment, Employment and Support Allowance Support Group component and Carer and Pension benefits and Maternity Allowance, Statutory Sick Pay, Statutory Maternity Pay, Statutory Paternity Pay, Statutory Shared Parental Pay, and Statutory Adoption Pay)
Lowering of the Benefit Cap for families to £23,000 in London (£15,410 single claimants) and £20,000 for families in other parts of the UK (£13,400 single claimants)
From April 2017 new claimants of Employment and Support Allowance (ESA) who are placed in the Work-Related Activity Group will receive the same rate of benefit as those claiming Jobseeker's Allowance and the equivalent in Universal Credit, alongside the change additional support will be provided to help people find work. Existing ESA claimants will be unaffected by the change.
Abolishing automatic entitlement to Housing Support for new claims in Universal Credit for 18-21 year olds who are out of work, from April 2017 (exemptions will exist for some groups).
From September 2017, free childcare entitlement will be doubled from 15 hours to 30 hours a week for working parents of 3 and 4 year olds.
Tax credits and Universal Credit
Income threshold reduction - From April 2016, the government will reduce the level of earnings at which a household’s tax credits and Universal Credit award starts to be withdrawn for every extra pound earned. In tax credits, this point (known as the income threshold) will be reduced from £6,420 to £3,850. The equivalents in 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
Tax credit taper – The rate at which a person’s or household’s tax credit award is reduced ‘the taper rate’ will be increased from 41% to 48% from April 2016.
Income rise disregard in tax credits – From April 2016 the amount by which a 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 £5,000 to £2,500
Support for children – In households with two or more children any subsequent children born after April 2017 will not be eligible for further support. Equivalent changes will be made to the Housing Benefit rules. This will also apply in Universal Credit to families who make a new claim from April 2017.
- Family element - Those starting a family after April 2017 will no longer be eligible for the Family Element in tax credits. The equivalent in Universal Credit, known as the first child premium, will also not be available for new claims after April 2017. In Housing Benefit, the family premium will be withdrawn for new claims from April 2016.
The tax-free Personal Allowance will be increased from £10,600 in 2015-16 to £11,000 in April 2016.
The higher rate tax threshold will be increased to £43,000 in 2016-17, up from £42,385.
Employment and pay
From April 2016, there will be a new National Living Wage of £7.20 an hour for the over 25s. This will rise to over £9 an hour by 2020.
Parents requirement to seek work – From early 2017 parents with a youngest child aged 3 or older (including lone parents) who are able to work will be expected to look for work if they are claiming Universal Credit.
Youth obligation for 18-21 year olds to "earn or learn". From April 2017 those aged 18-21 who are on Universal Credit will have to apply for an apprenticeship or traineeship, gain work based skills, or go on a work placement 6 months after the start of their claims (exceptions will apply for those considered vulnerable)
- Apprenticeship levy - there will be an apprenticeship levy on all large employers with the aim of creating 3 million new apprenticeships by 2020. Firms that are committed to training will be able to get back more than they put in.
- For Small and Medium Sized Enterprises (SMEs) – the employment allowance is rising to £3,000 to help create jobs.
- Abolition of maintenance grants - from the 2016-17 academic year new maintenance loan support will replace student grants. Cash support for new students will increase by £766 to £8,200 a year. Loans will be paid back only when graduates earn above £21,000 a year.
Rents for social housing will be reduced by 1% a year for 4 years from 2016
Social housing tenants on higher incomes (over £40,000 in London and over £30,000 outside London) will be required to pay market rate, or near market rate rent.
From April 2016, Housing Benefit claims will be limited to backdating for a maximum of 4 weeks.
A four-year freeze will be applied to Local Housing Allowance rates from April 2016
- From 1 April 2016, the Support for Mortgage Interest (SMI) waiting period will return to the pre-recession length of 39 weeks, but the capital limit will be maintained at the higher level of £200,000. From April 2018, new SMI payments will be paid as a loan.
For further information on the budget, see the Gov.UK full Summer Budget 2015 document.