Welfare reform and benefit advice
There are many other reforms that have either already been implemented or are planned for the future. The Benefit Cap, Bedroom Tax, changes to disability benefits, capping and removal of Housing Benefit or Housing Element of Universal Credit could reduce your income and put pressure on you being able to sustain your home.
The Benefit Cap is a limit on how much anyone can receive in benefits.
The cap is set at these levels:
- £23,000 per annum for families who live in London.
- £20,000 per annum for families who live outside London.
- £15,410 per annum for single people living in London
- £13,400 per annum for single people living outside London
Who is affected?
The cap affects most people aged 16 to 64 claiming benefits and who would otherwise have received more the capped limit. It tends to affect families with more than two children the most, as well as people living in areas where property prices are higher than the national average.
If the Benefit Cap applies to you, this money will be taken from your Housing Benefit. You will have to find and pay the difference in rent yourself.
The Benefit Cap applies to the total amount that the people in your household get from the following benefits:
• Bereavement Allowance
• Carers Allowance
• Child Benefit
• Child Tax Credit
• Council Tax Benefit
• Employment Support Allowance
• Housing Benefit
• Incapacity Benefit
• Income Support
• Jobseekers Allowance
• Maternity Allowance
• Severe Disablement Allowance
• Widowed Parents Allowance (or Widowed Mother's Allowance or Widows Pension you started getting before 9 April 2001).
Any benefits not mentioned above are not included in the cap.
What happens if I lose my job?
If you are recently unemployed the Benefit Cap may not apply for the first 39 weeks as part of a ‘Grace Period’. To be entitled to this you need to have met the following criteria: You were in paid employment or self-employment (this doesn't have to be full-time) for 50 of the 52 weeks immediately before your last day of work, and during that time you did not receive Income Support; Jobseeker's Allowance or Employment and Support Allowance, anytime in more than two weeks.
Personal Independence Payment
Personal Independence Payment (PIP) was introduced on 8 April 2013 and replaced Disability Living Allowance (DLA) for anyone aged 16 to 64. PIP is calculated by worked out how much help you need to do everyday activities. You will be assessed by a medical professional and these findings will be shared with your benefit provider.
There are no plans to replace Disability Living Allowance for children under 16 and people aged 65 and over who are already getting Disability Living Allowance.
What happens if I fail a PIP medical assessment?
Previous DLA claimants could lose as much as £77.45 (the care component of DLA), and up to £54.05 or their mobility car, for the mobility component of DLA.
In addition, the following entitlements could be lost:
- part of your Housing Benefit
- your taxi card
- a Carers Allowance of £58.45 per week which someone may claim for providing care to you
- the exemption from a non-dependant deduction being taken from your Housing Benefit (this means that as much as £60.60 could be reduced from your Housing Benefit)
- your disability badge, entitling you or someone who drives you, to park in disabled spaces.
Overall, you could lose up to £257.05 per week based on a couple previously receiving the highest rate mobility and care entitlement.
Can my PIP entitlement change?
PIP assessments are for fixed periods of time after which you have to reapply. The reason is that support needs can change over time.
What about the Benefit Cap?
Payments made through PIP are not affected by the Benefit Cap.
Council Tax Reduction
Council Tax Reduction (CTR) replaced Council Tax Benefit in April 2013. It is also sometimes referred to as Council Tax Support. You may be entitled to CTR if you are on a low income or claiming benefits.
Depending on where you live CTR may be:
- a percentage discount of your council tax bill.
- a fixed discount as set out in the scheme.
- a 100 per cent discount so nothing is payable.
As schemes are locally administered you should always check your entitlement with your local authority. The aim of this new system is to simplify the complex criteria and allowances from the old system and to generate savings for the tax payer. As pensioners were protected, all savings are being achieved from the working-age population.
Changes to Housing Benefit and Local Housing Allowance Cap
The Government has recently announced further changes to the Local Housing Allowance housing benefit cap (including the housing cost element of Universal Credit). Most importantly, it was announced in the Autumn Statement 2016 that the cap would now apply from 2019, rather than 2018 as previously announced.
Who does this affect?
These changes apply regardless of your age, including if you are overworking age. There are specific changes for those under 35.
What does it mean for me?
If you signed a new tenancy or renewed your tenancy agreement from 1 April 2016, the amount of Housing Benefit (or Housing element of Universal Credit) that you receive from 1 April 2019 could be restricted.
This is because the government has decided the amount of Housing Benefit you will receive will be capped to the relevant Local Housing Allowance (LHA) rate that currently applies to private sector tenants.
The LHA rates for your area can be found by searching for your postcode here. The amount you receive will be capped at the LHA rate for your area, which is based on a figure set by the government and determined by factors such as a number of bedrooms and your household. If you are not sure how many bedrooms you are entitled to, use the LHA Bedroom Calculator or contact the Housing Benefit department at your local authority.
If you are single, under 35 years of age and do not have any dependent children living with you, your Housing Benefit will be capped to the Shared Accommodation Rate even if you do not share your home with anyone else. You could find your Housing Benefit will no longer pay for all of your rent.
However, some people under the age of 35 will be able to claim the one-bed LHA rate if they:
- receive the severe disability premium under Housing Benefit;
- are in receipt of Attendance Allowance, the middle or higher rate of Disability Living Allowance care component or the daily living component of PIP;
- are under the age of 22 and were looked after or are under the supervision of the local authority under specific legal conditions after he/she turned 16;
- are under 22 and provided with accommodation by the local authority under specified provisions;
- require overnight care;
- are at least 25 and have been living in a homeless hostel for three months or more (this does not have to be continuous) and received support;
- are at least 25 and an offender subject to specific MAPPA arrangements.
Will I also have to pay the Bedroom Tax?
If you are of working age and have one or more extra bedrooms, your rent and any service charges used in the assessment of your Housing Benefit (or the housing element of Universal Credit) is already capped.
If the difference between your rent and the relevant Local Housing Allowance rate for your household is higher than the Bedroom Tax, only the LHA cap will apply. Similarly, if the reduction for Bedroom Tax is higher than the relevant LHA rate for your household, only the Bedroom Tax will apply. If you are of pension age, you are not affected by the Bedroom Tax, but your rent will be capped to the relevant LHA rate for your household.
What do I need to do now?
If the above applies to you, you will need to consider how you will pay for the difference between your rent and your LHA entitlement. Always make your rent the top priority - otherwise, you could risk losing your home.
You may need to find an additional source of income.
How do I find out more?
The exact details of these changes are still to be announced by the government. We will keep you informed on our website, social media and through our customer magazine as the information becomes available. We will also advise you of the changes if you sign a tenancy agreement with us after 1 April 2016.
Our Tenancy Sustainment Team
We are dedicated to helping our customers who may be struggling to manage due to one or more of these reforms. We can help you to apply for other benefits, request back-dates, appeal against decisions that you don’t agree with, set up email addresses, open bank accounts and help you to overcome any problems with your benefits that you might encounter.
Last year we carried out over 1100 face to face appointments with our customers.
Please do not hesitate to contact us on 0116 2576716 or email@example.com if you need advice or support.