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Benefit Changes 2016

Welfare reform results in changes to the benefits system. See how your benefits may be affected.

Benefit Cap Reductions

On 7th  November 2016, the Government reduced the amount of income allowed by the benefit cap.

Outside of London the benefit cap will be lower at £385 per week for couples and lone parents, and £258 for single individuals.

If you are receiving Housing Benefit, your household's combined income from Job Seekers Allowance, Income Support, Employment and Support Allowance, Housing Benefit, Child Benefit, Child Tax Credit, Bereavement Allowance, Incapacity Benefit, Severe Disablement Allowance, Widowed Parents Allowance, Widowed Mothers Allowance, and Widow's Pension will be added together.

If this exceeds £385 a week the housing benefit will be restricted until the £385 limit is not breached. With single individuals the limit will be £258 per week.

If you are already receiving Universal Credit, a household's combined income from Bereavement Allowance, Employment and Support Allowance (contribution-based, jobseeker's allowance (contribution-based), Maternity Allowance, Universal Credit (before any sanctions are applied), and Widowed Parent's Allowance (or any widowed mother's allowance or widow's pension will be taken into account.

Where an individual is over the cap threshold the housing element of Universal Credit will be restricted.

You can use the Benefit Cap calculator to see how you will be affected.

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The following households will be exempt from the cap where the claimant, partner or a dependent child is receiving one of the following:

  • Disability Living Allowance, Personal Independence Payments or Attendance Allowance
  • War Widows or those in receipt of War Widows Pension
  • Working Tax Credits
  • Employment Support Allowance (support component only)
  • Pensioners - or couples where one is above pension credit age
  • From 7 November 2016 those entitled to Carers Allowance or Guardians Allowance

In all cases it must be the claimant, partner or a dependent child that receive the benefit for the exemption to apply.

Individuals who have been working for 52 weeks when they claim benefit, who lost their job through no fault of their own, may be exempt from the cap for up to 9 months.

The easiest way to avoid the cap is to find employment of enough hours to be entitled to working tax credit.

From 28 July 2016 the rules governing Housing Benefit and temporary absence outside of Great Britain (GB) have been changed

If you are on Housing Benefit and you temporarily leave GB your absence can not be more than 4 weeks. If you leave GB for more than 4 weeks your Housing Benefit will cease.

If at the outset the absence will be more than 4 weeks, then Housing Benefit will cease from the Monday after you leave the country.

This means you must tell us if you are going to leave GB for a period of 4 weeks or more. During all periods of absence you must still:

  • Intend to return to the property
  • Not let or sublet the dwelling

The rules governing temporary absence within GB remain unchanged at 13 weeks.

Everyone has a maximum amount of weekly income they can receive before their income starts to affect their Housing Benefit.

This figure is called your applicable amount, and is compared against your income and capital to work out how much Housing Benefit and Council Tax Reduction you receive.

Prior to May 2016 your applicable amount included an extra amount called a Family Premium where you had children.

From 1 May 2016 this Family Premium has been removed from the applicable amount used to calculate Housing Benefit. The loss of the family premium will only affect new claims, or families who have children after 1 May 2016. Existing claims are protected from this change

From April 2016, the period that Housing Benefit claims can be backdated for, has been reduced to a maximum of 1 month for working age claimants.

The main rates of Working Age Benefits and Tax Credits will be frozen in cash terms for four years from April 2016. Pensioners' benefits are excluded from this freeze.

Disability benefits and disability-related elements of Tax Credits and other state benefits will be increased in line with the consumer price index.

Benefits included in the freeze are:

  • Jobseeker's Allowance
  • Income Support
  • Employment Support Allowance
  • Child Benefit
  • Applicable amounts for the calculation of Housing Benefit and Local Housing Allowance rates
  • Child and Working Tax Credit
  • Benefits excluded from the freeze:
  • Pensioner Benefits
  • Maternity Allowance
  • Statutory Sick Pay
  • Statutory Maternity/Paternity Pay
  • Statutory Shared Parental Pay
  • Statutory Adoption Pay
  • The support component of Employment Support Allowance

any disability, carers or pensioners elements of benefits, other disability, care or pensioner benefits, including Personal Independence Payment (PIP) and Disability Living Allowance (DLA).

From April 2016, any income changes of more than £2,500 will be taken into account when calculating the entitlement to Tax Credits. This replaces the current figure of £5,000.

Universal Credit replaces Income Support, Jobseeker's Allowance (IB), Employment and Support Allowance (IR), Working Tax Credit, Child Tax Credit, and Housing Benefit with one single benefit.

Individuals now receive one monthly payment covering both living and housing costs. Payments are made to the claimant by default or a nominated person within the household rather than to the landlord - including for social and council tenants.

Universal Credit has not yet gone live in Basildon for couples, families, lone parents or individuals in work, and these groups should still claim Housing Benefit. 

Housing Benefit for under-21s

Individuals aged under 21 will no longer be able to claim Housing Benefit (or the housing element of Universal Credit) from April 2017.

There will be exceptions for care leavers, parents, and other vulnerable groups.

Restrictions to 2 children

From April 2017 there will be a 2 child limit on all new claims to Housing Benefit and Tax Credits. 

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