Changes to benefits

The Government has introduced some major changes to benefits nationally. Some changes came into effect on 1 April 2011 while others will be introduced by 2018.

The changes will affect those who are claiming any benefits for children, older people, unemployment, income support, housing or disabilities and ill health.

Benefits for children


Benefits for older people
 

 
Unemployment and income support benefits


Housing related benefits

Benefits for children

Child Benefit

Effective from April 2011

Child Benefit has been frozen for three years at the following weekly rates:

  • £20.30 for the eldest or only child
  • £17.30 for each subsequent child

Effective from January 2013

It is proposed that households with at least one higher rate tax payer will no longer be eligible for Child Benefit. Based on the 20011/12 rate, this will affect those earning £35,001 and above. However, this rate may change.

For more information see Child Benefit

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Sure Start Maternity grant

Effective from April 2011

Eligibility is restricted to those who have no other children aged under 16 in the household

For more information see Sure Start Maternity Grant

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Health in pregnancy grant

Effective from April 2011

Abolished for babies born after 11 January 2011

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Child trust fund

Effective from April 2011

Abolished for babies born after 11 January 2011

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Child Tax Credits

Effective from April 2011

  • Income eligibility has been reduced from £50,000 to £40,000
  • Allowance for babies under the age of one has been abolished
  • Payments for childcare costs have been reduced from 80% to 70%. The maximum allowance paid are £175 for one child and £300 for two or more children

Effective from April 2012

Income eligibility will reduce to £30,000

For more information see Child Tax Credits

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Benefits for older people

State Pension

Effective from April 2011

Pensions will rise by a minimum of 2.5%

Effective from April 2010 - 2018

The age at which women can claim is increasing to 65

Effective from April 2010 to December 2018
Pension age will be increased to 66 for both men and women
For more information, see State Pension

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Pension Credit

Effective from April 2011

The Pension Credit Savings element is frozen for four years

For more information, see Pension Credit

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Winter Fuel Payments

Effective from winter 2011

Standard winter fuel payment will be reduced to £200 and £300 for people aged over 80

For more information, see Winter Fuel Payment

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Unemployment and income support benefits

Working Tax Credit

Effective from April 2011

  • Will reduce at a quicker rate as earnings increase
  • Claimants aged over 60 need only work 16 hours a week instead of 30 hours a week to be eligible
  • Increases in income of up to £10,000 ('disregarded income') in an award year will not affect eligibility. This is a reduction from £25,000

Effective from April 2012

  • The number of hours a couple must work to be eligible will increase from 16 hours to 24 hours a week. At least one person in a couple must work 16 hours
  • The additional allowance for people aged over 50 returning to work will be abolished

Effective from April 2013

  • Disregarded income will be reduced to £5,000
For more information, see Working Tax Credit

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Employment and Support Allowance (ESA)

Effective from February 2011 to March 2014

  • Those successfully reassessed under Incapacity Benefit will be eligible for Employment and Support Allowance
  • Current claimants will be contacted automatically by Jobcentre Plus and issued with a questionnaire to complete. People may have to attend a medical
  • You will not be subject to the reassessment process if you have reached pension age by March 2014

Effective from April 2012

Contributory Employment Support Allowance (based on National Insurance) for those placed in the work related group will be limited to 52 weeks of payment. Currently, benefit is paid as long as evidence of sickness is accepted

For more information, see Employment and Support Allowance (ESA)

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Income Support
Effective from January 2012

Lone parents with a youngest child aged five or above will no longer be eligible. Instead, you must claim Jobseeker's Allowance and be available for work. Alternatively, you can claim Employment and Support Allowance (ESA) if you are incapable of work

For more information, see Income Support

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Housing related benefits

Housing and Council Tax Benefit

Effective from April 2011

There are increases in the non-dependent deduction rates. This means that the incomes of anyone aged over 18 who is living in your home could affect how much Housing and Council Tax benefit you receive

Effective from April 2013

  • Benefit will be reduced for properties rented from the council or social landlords if they are deemed too large
  • Council Tax Benefit will be determined locally by the Council
For more information, see Housing Benefit and council tax benefit

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Local Housing Allowance

Effective from April 2011 but existing claimants will receive nine months protection for benefit reductions  

  • Eligible rent levels have been reduced for private tenants who claim Housing Benefit
  • The five bedroom rate has been abolished
  • An additional room will be allowed for disabled claimants where a bedroom is used overnight by a non-resident carer

Effective from April 2012

It is proposed that there will be a restriction of rates for people aged up to 35 to a shared room rate - this is currently only applied to under 25s.

For more information, see Local Housing Allowance (LHA)

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Disability and ill health related benefits

Disability Living Allowance (DLA)

Effective from April 2011

People who are blind and who are severely visually impaired are now eligible for the high rate of the Mobility Component of DLA.  Current DLA claimants should be contacted automatically by the Disability Benefits Centre.

Effective from April 2013

  • There are proposals for a new Personal Independence Payment (PIP) to replace DLA. The new PIP will pay standard and enhanced rates but will not pay the lower components, which apply under DLA. The medical test for PIP will be similar to the work capability test used for Employment and Support Allowance (ESA)
  • It is proposed that the mobility component of DLA will be removed from people in residential care
For more information, see Disability Living Allowance

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Will there be any further changes?

Yes. The Universal Credit will be introduced from 2013. It is a means tested benefit that will replace benefits and tax credits for those of working age.

This means that the following benefits will be abolished:

  • Income Support
  • Income based Jobseeker's Allowance
  • Income related Employment and Support Allowance
  • Working Tax Credit
  • Child Tax Credit
  • Housing Benefit
  • Council Tax Benefit

The Universal Credit is designed to simplify the benefit system and make work pay. 

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