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Recent and Forthcoming Changes

Recent and Forthcoming Benefit Changes Information about some of these changes is correct at the time of writing (August 2016) but may be subject to further change. You should seek advice if you are worried about your benefits being affected by the changes below.


Benefits and tax credit rates are frozen

For working age benefits there will be no annual uprating (which usually happens in April). Benefit payments will remain locked at the same levels until at least 2020. Pensioner benefits are excluded from the benefit freeze and will be protected by the 'triple lock'. Disability benefits (such as Disability Living Allowance, Personal Independence Payments), the disability-related elements of tax credits, the support group of Employment and Support Allowance, and statutory payments (Statutory Maternity/Paternity Pay and Statutory Sick Pay, for example) are exempt from the freeze and will be uprated in line with the Consumer Prices Index (CPI). However, the CPI fell in the year to September, 2015, so this means that the benefits mentioned above will not be increased from April, 2016.

Housing Benefit

The Family Premium within the Housing Benefit calculation is abolished for all new claims after April, 2016, and for those whose first child is born after April, 2016. This means that those who are in-work or claiming contributory benefits could see a loss of £17.45 off their Housing Benefit.

From April, 2016, backdating of Housing Benefit is restricted to one month in any circumstances (replaces the three months backdating for those of pension age, and the six month backdating for those of working age who have 'good cause' for a late claim).

All new social housing tenancies taken after April, 2016, will have Housing Benefit paid in line with the Local Housing Allowance which will limit the number of bedrooms paid for through Housing Benefit according to family size.

From Summer, 2016, HB will be restricted to 4 weeks during temporary absences if a tenant is abroad; this is reduced from 13 weeks.

Reduction in the benefit cap

The benefit cap in place restricts the amount of benefits that a working age household can receive. If a household exceeds the cap, Housing Benefit is reduced first to bring benefit income under the threshold of the cap.

From 7th November, 2016, new thresholds will apply. Exactly when you will be affected depends on where you live. The roll-out is expected to take a number of weeks. When the new threshold applies there will also be a new rule which exempts those in receipt of Carer's Allowance from the cap.

The new amounts will be:

·        In London, £23,000 for couples and lone parents (down from £26,000)

·        In London, £15, 410 for single claimants (down from £18,200)

·        Outside London,  £20,000 for couples and lone parents

·        Outside London, £13,400 for single claimants

'Single-tier' State Retirement Pension

The new flat rate is introduced in April, 2016, starting at £155.65 (5p above the threshold for Guarantee Pension Credit)


Tax Free Childcare

Tax Free Childcare is to be introduced as a replacement for employer supported childcare (childcare vouchers). The government will contribute up to 20% of the first £10,000 of registered childcare costs per child, per year. This equates to a maximum of £2,000 per child, per year. The scheme will be available to people who have an annual income under £150,000 and are not receiving help with childcare via tax credits.

Bereavement Support Payment

Bereavement Support Payments (BSP) will be introduced for new claims from April, 2017, replacing the current bereavement benefits system.

Tax Credits support for children reduced

It was announced in the 2015 summer budget that support for children through Tax Credits and Universal Credit will be limited to two children from April, 2017.

Tax Credit Family Element removed

After April, 2017, claimants who have children for the first time 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.

Universal Credit requirements for parents to look for work

Parents, including lone parents, whose youngest child has reached the age of 3, are expected to look for work if they want to claim Universal Credit.

Reduction in payment for ESA Work-Related Activity Group claimants

There will be no payment of the work related activity group to claimants who are found to have limited capability for work from April, 2017; new ESA claimants who are placed in the Work-Related Activity Group will receive the same rate of payment as those claiming Jobseeker's Allowance and the equivalent in Universal Credit.  

Universal Credit Youth Obligation

From six months after the start of a Universal Credit claim, 18 - 21 year olds will have to either apply for training, apprenticeships, or attend a work placements (there are some exemptions being proposed for those young people considered to be 'vulnerable')

Universal Credit Housing Support removed for young people

From April, 2017, the intention is to remove entitlement to housing support in Universal Credit for those aged 21 or under.

Housing Benefit

New or renewed tenancies for supported accommodation in the social sector will be subject to a cap on Housing Benefit in line with the Local Housing Allowance rates.

In line with the Universal Credit restrictions, Housing Benefit for those under 21 will be removed (unless a claimant fits into the small group of exemptions)


End of 2017

Free Childcare Extended

It is intended that free childcare entitlement will be doubled from 15 hours to 30 hours a week for working parents of 3 and 4 year olds from September, 2017.

Social Tenants

The government will consult on higher income social tenants paying higher rents. The intention is that those earning over £40,000 in London and over £30,000 outside London will pay higher market rate or near market rate rents.  


April, 2018

Support for Mortgage Interest (SMI) payments

The government announced in the summer budget, 2015 that from April, 2018, new SMI payments will be paid as a loan. Loans will be repaid upon sale of a claimant's house or when claimants return to work

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