Changes which could affect the amount of money you have coming in each week
Successive reforms to Welfare Benefits have been introduced in the past few years. These changes could significantly affect the amount of money you have coming in each week and may well reduce the amount of help with rent you get as well as how it is paid.
Changes for young people – 18-21 year olds from 3 May 2017
18-21s making new claims for Universal Credit in the areas mentioned will NOT be able to claim any help for Housing Costs unless they meet one of a number of exemptions, which include:
- Those earning at least 16x the national minimum wage
- Those who earned at least the above for the previous six months before they claimed (but can only claim for six months)
- Parents (including lone parents)
- Those who left care before they turned 18
- Receive DLA middle or higher rate care, or PIP daily living component
- Subject to, or threatened with, domestic violence
- Who cannot live with their parents due to a serious risk to their physical or mental health
The last exception might include young people who have fallen out with their parents and moved out, but could be difficult to prove. Anyone who does not meet the exception criteria will therefore find it very difficult to afford to pay rent if they are not in work.
Also, this age group will be given extra support to find work and will be expected to be in work, training or education within six months to remain entitled.
Changes for bereaved people
Changes for families - from 6 April 2017
From 6 April 2017 the government has introduced the two child limit – which is the concept of not financially supporting families to have more than two children while claiming benefits.
Any children born before 6 April 2017 are protected from this change. However, a child born after that date who is not the first or second child on the claim will not attract financial help unless:
- They are not the first child in a multiple birth
- They were formally adopted in the UK
- They are the child of a child under 16 you claim for
- They are being looked after under an arrangement through social services
- They were conceived as the result of non-consensual conception or in a coercive or controlling relationship, and the mother does not live with the perpetrator
Note that the following types of benefit are not affected:
- Child Benefit
- Child Maintenance
- Disabled Child Elements of Child Tax Credits and Universal Credit
- Childcare Element of Working Tax Credit and Universal Credit
- Healthy Start Vouchers
- Free School Meals
Also, all children are still counted when considering how many bedrooms your household needs for Housing Benefit and Universal Credit” (see Bedroom Tax below)
Changes for people too ill to work - from 6 April 2017
Removal of Work-Related Activity Component – From 6 April 2017, new claims for Employment and Support Allowance (ESA) and Universal Credit will no longer award the ‘Work Related Activity Component’ if you are judged to be too ill to work but not too ill to take part in some activity, like training, to get you ready for work in the future. Instead, you will receive the same amount as someone looking for work. This is a cut of £29.05 per week.
This does not affect those who currently receive it or who started their claim before 6 April 2017.
Removal of Permitted Work time limit – ESA claimants can sometimes be allowed to work less than 16 hours per week if they are earning less than £115.50 per week, for up to one year, without it affecting their claim. After a year, they then had to take a year’s break before being able to do it again.
From April the year’s time limit is being removed so claimants doing ‘permitted work’ can do so indefinitely, as long as it remains less than 16 hours and less than the new limit of £120 per week.
Positive Changes - from April 2017
Change to National Minimum Wage – the national minimum wage is rising. For those aged 25+ it is rising from £7.20 to £7.50 per hour, and those younger those 18-24 are also seeing a rise of 10p on their current rate per hour.
Change to Universal Credit earnings taper – low paid workers will be able to keep an extra 2p of £1 they earn whilst claiming Universal Credit. This is because the earnings taper is reducing from 65% to 63% from 6 April 2017.
Universal Credit is a new type of benefit which is being gradually introduced across the country for working-age people. It replaces a number of current benefits. For more information visit our Universal Credit page.
The Benefit Cap is a cap on the total benefits a claimant can receive. It is set at £20,000 per year per family outside of London, equivalent to about £385 per week. For single people with no children the cap is £13,400 per year or about £258 per week.
How does it work?
The Benefit Cap works by adding up all of the money you receive from certain benefits (click here for a list).
However, if you, your partner or children who you get Child Benefit for are entitled to any of the following benefits, you should be exempt:
- Working Tax Credit
- Disability Living Allowance or Personal Independence Payments
- Attendance Allowance
- Industrial Injuries benefits
- The Support component of Employment and Support Allowance
- War Widow’s or War Widower’s Pension
- Carer’s Allowance
- Guardian’s Allowance
If you’re not exempt and your total benefit income adds up to more than the cap, then your Housing Benefit or Universal Credit is reduced by the amount over the cap you are.
For example if your total benefit income is £415 per week, this is £30 over the £385 per week cap, so your Housing Benefit will be reduced by £30 per week. This means you will have to pay this towards your rent instead.
Am I affected?
Are you affected by the Cap and need help?
Then please call us on 0300 123 5544 to ask for our Benefit Advice Team or email us on email@example.com
We can check your benefit entitlements, help you to apply for any of the exempting benefits if they apply or otherwise discuss your options with you.
The 'Bedroom Tax'
If you are of working age and claiming Housing Benefit, or help with rent on Universal Credit, but have what the Government deems to be a ‘spare’ bedroom, your benefit may be reduced. Your Housing Benefit, or your Housing Element part of your Universal Credit, will be reduced by 14% for one spare bedroom, and 25% for two or more spare bedrooms.
The following people need their own bedroom:
- a couple
- a single person over the age of 16
- Two children under 16 of the same sex
- Two children under 10 regardless of their sex
- A child under 16 where there is no other child to share with them
- Someone who cannot share a bedroom due to a disability
- Someone who provides regular over-night care to an occupant
- An extra bedroom if you are a foster carer
Here are examples of circumstances under which the Government would consider you have a ‘spare’ bedroom. It is important to note this does not affect tenants of pension age:
- you and your partner live in a three bedroom house and have a boy aged eight and a girl aged three. The Government says that you only need a two bedroom house .
- you live by yourself or with a partner in a two bedroom flat
- you live by yourself or with a partner in a specially adapted two bedroom bungalow because you are disabled. The only exception to this is if you need a carer to stay overnight on a regular basis.
The Citizens Advice offers a simple Bedroom Calculator to help identify how many bedrooms your household is entitled to.
Please note the special circumstances which are not accounted for in the calculator.
Please contact Customer Services on 0300 123 5544 and ask to speak to a Welfare Benefits Advisor.
A Credit Union account can help you to manage your household budget if you think you will struggle to manage monthly payments, including your rent.
We have links with Bedford Credit Union. For more information see our Credit Union page.