Welfare Benefit Changes

The Government has introduced a number of changes to welfare benefits including Housing Benefit (HB).

Some changes have already occurred and others are due to be introduced. The main changes are explained below.

Rent Restrictions in the Social Rented Sector

In April 2013 rules were introduced that set out the number of bedrooms Housing Benefit will pay for people of working-age who live in accommodation provided by a Housing Association e.g. Bron Afon, Monmouthshire Housing, Pobl or Melin.

Tenants who under-occupy their property will have their HB reduced by 14% for one spare room and 25% for two or more spare rooms.

One bedroom is allowed for each of the following:

• every adult couple (married or unmarried).
• any other adult aged 16 or over.
• any two children of the same gender aged under 16.
• any two children aged under 10.
• any other child, (other than a child whose main home is elsewhere)
• a carer or team of carers who provide the claimant, their partner, a disabled child* or non-dependant adult* with overnight care (providing they have a spare room for this purpose and as long as certain criteria are met).
• A foster child/foster children (only one bedroom is allowed providing they have a spare room for this purpose. The foster-carers must be approved).
• Any non-dependant in the armed forces who is temporarily absent from their home (as long as they intend to return home) e.g. grown up son or daughter living with their parents who is away on operations.
• a couple* or disabled child who is unable to share a bedroom because of their severe disabilities as long as certain criteria are met.

* New rules were introduced from 1 April 2017 to allow an extra bedroom for these groups.

If you require any more information find out where can I get more advice here.

The Benefits Cap

As part of the Welfare Reform Act the Government introduced a cap on the total amount of benefit that a working-age household can receive. (Household is defined as a claimant, their partner and any children they are responsible for and who live with them).

For those who live outside of London the current cap level is:

• £384.62 per week (£20,000 a year) for couples (with or without children) and lone parents; and
• £257.69 per week (£13,400 a year) for single claimants.

If a person is affected by the cap their Housing Benefit or Universal Credit entitlement is reduced.

For more information about the benefit cap please visit www.gov.uk/benefit-cap.

Changes from April 2017

Child Support Restrictions

Child support will be restricted to a maximum of 2 children for new HB and Child Tax Credit claims. For existing claims no additions for children will be allowed where third and subsequent children are born. Some exemptions will apply including disabled children.

Note - The Child Support restriction (to 2 children) will not be delivered through Universal Credit until February 2019 (other than families already on Universal Credit who have a third child after April 2017 who will remain on UC and receive the child element for 2 children). This means that the Department for Work and Pensions will direct new claims from families with more than two children to claim HB and Tax Credits until February 2019.

Employment and Support Allowance (ESA)

Work-Related Activity component abolished

New claimants of 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. This is because the Work Related Activity component is being abolished. This provision does not affect people placed in the Support Group.

ESA permitted work limit removed

From 3 April 2017, ESA claimants who undertake permitted work and earn between £20 and £115.20 per week will no longer have to give up their work or stop claiming ESA after 52 weeks.

Child Tax Credit

The family element of Child Tax Credit (set at £545) will only be included in awards where the person has responsibility for a child or young person born before 6 April 2017.

Bereavement Benefits

The current bereavement benefits (Bereavement Allowance, Bereavement Payment, and Widowed Parent’s Allowance) will be replaced with the new Bereavement Support Payment.

Universal Credit Changes

The taper rate that applies in Universal Credit will be reduced from 65 per cent to 63 per cent. This means for every £1 a person earns their Universal Credit will be reduced by 63 pence instead of 65 pence.

Parents with a youngest child aged 3, including lone parents, are expected to look for work if they want to claim Universal Credit.

18-21 year olds claiming Universal Credit will have to participate in an intensive period of support at the start of their claim. After six months, if they are not working they will be expected to apply for an apprenticeship, traineeship, gain work place skills or go on a work placement unless they are exempt (considered to be vulnerable).

There will no longer be automatic entitlement for those aged under 21 to the housing costs element of Universal Credit for new claims in areas where the full Universal Credit Service has been introduced. There will be exceptions for example parents and vulnerable groups.

Note - This new policy will not affect people in receipt of HB or in receipt of housing costs in their Universal Credit at the point of change on 1 April 2017.

Benefit cap and Universal Credit

From 1 April 2017 the exemption from the benefit cap for being in work will change so a person will be exempt if their weekly earnings are equal to or greater than the equivalent of 16 times your National Minimum/Living Wage rate, rather than a flat rate of £430 per month/£100 per week. The required earnings from 1 April 2017 to exempt a person from the benefit cap are as follows:

• 25 years and older £120 per week
• 21 to 24 years old £112 per week
• 18 to 20 years old £89 per week

Last Modified: 29/05/2020 Back to top