Welfare Reform

welfare reform

Bedroom tax

Since 1 April 2013, new housing benefit rules mean you won’t be able to get housing benefit to pay for all of your rent if your home has ‘spare bedrooms’.

If you’re a council or housing association tenant of working age receiving housing benefit and renting a home that has more bedrooms than you need, it’s likely that your housing benefit will be reduced. Pensioners claiming housing benefit won’t be affected.

If you have more bedrooms than the new rules say you need, you will be treated as ‘under-occupying’ your home. You’ll get less of your rent paid for by housing benefit.

If housing benefit no longer covers the full cost of your rent, you will have to pay the rest of the rent yourself. This must be paid directly to your landlord.

Benefit cap

From July 2013, there will be a ‘cap’ (a maximum limit) on the total amount of benefit that people can get.

The Government will add up how much money you get from a range of benefits, including: housing benefit, jobseeker’s allowance, employment support allowance, child benefit, child tax credit and carer’s allowance.

The maximum of benefit you will receive will be:

A maximum of £500 a week
  • If your household is made up of a couple (with or without children),
  • or
  • If you are a lone parent (and the children you have responsibility for live with you).
A maximum of £350 a week
  • If you are a single person and you have no children,
  • or
  • The children you have responsibility for don’t live with you.

Your benefits will not be capped if:

  • You get pension credit or working tax credit
  • A member of your household is claiming disability living allowance, attendance allowance, industrial injuries benefit, or the support element of employment support allowance.

Personal independence payment

Since April 2013 a new benefit, Personal Independence Payment, replaced Disability Living Allowance (DLA) for disabled people aged 16 to 64. Personal Independence Payment is a non-means tested, tax-free payment to assist you with some of the extra costs caused by ill-health or disability.

There’s no automatic entitlement to Personal Independence Payment. Entitlement is based on your personal circumstances and the impact that your condition or disability has on your ability to live independently.

The only exception is for people who are terminally ill and who are not expected to live for more than six months. For further information, contact www.dwp.gov.uk

Universal Credit

Starting in October 2013 Universal Credit will replace all the various benefits that are currently paid.

The main differences between Universal Credit (UC) and the current welfare system are:

  • You will receive just one monthly payment, paid into a bank account in the same way as a monthly salary
  • Support with housing costs will go direct to the you as part of your monthly payment and will have to pay your landlord directly
  • Local Authorities will not be responsible for the administration of housing costs support
  • UC will be available to people who are in work and on a low income, as well as to those who are out of work
  • you will have to apply online and manage your claim through an online account
  • UC will be responsive, as people on low incomes move in and out of work, they’ll get ongoing support – giving people more incentive to work for any period of time that is available
  • Most claimants on low incomes will still be paid UC when they first start a new job or increase their part-time hours