Welfare Reforms & Changes 2016

Discretionary Housing Payments

From April 2013, local authorities received funding from Central Government for under-occupancy charges (bedroom tax) which awarded top-up payments to housing benefit. The Scottish Government pledged additional funding from April 2014 to ensure no tenant would be in financial hardship due to the bedroom tax. This funding will continue for 2016-2017. Tenants over pension age are not affected by the bedroom tax. The Court of Appeal recently found the bedroom tax to be unlawful to carers but the government are appealing to the Supreme Court to get the decision overturned.

EEA Migrants

Migrants currently coming to UK to look for work or not intending to work have to live in the UK for 3 months before claiming child benefit. A residency test is applied to claim other benefits if the migrant is not working or employment ceases.

Housing Benefit –from April 2016

Backdating rules to be changed from 6 months to one month for working-age tenants without exception. From April 2016 tenants will have to ensure new claims for housing benefit are made as soon as possible and changes of circumstance reported immediately to ensure that their housing benefit is paid correctly and to prevent rent arrears accruing. Tenants will be liable for payment of any rent arrears arising from failure to report changes in their circumstances.

Housing Benefit for under 35’s.

Single people without children will only be eligible for the shared accommodation rate which may be lower than the actual rent charged. This will affect tenancies signed after 1 April 2016 and subsequent housing benefit entitlement from 1 April 2018.

Housing Benefit general restriction

Plans to restrict eligible housing benefit to Local Housing Allowance rates ( currently applied to private tenancies) will take effect from 1 April 2018 but will affect all tenancies signed after 1 April 2016. The government are currently undecided as to whether or not there will be exemptions eg sheltered/supported accommodation. The change will have serious implications for housing providers.

Benefits and Tax Credit rates from April 2016

For working age tenants will be frozen for 4 years. (Pensioner benefits and disability benefits will not be affected).

Benefit Cap from April 2016

The cap for working age households will be reduced to £20,000 outside of London. Tenant’s housing benefit is currently reduced if overall DWP benefits exceed the limit. However, tenants who receive carer’s allowance claimants (single or one of couple) will be exempt.

Tax Credit income disregard from April 2016

This is currently £5,000 but will be reduced to £2500. This affects households whose income increases during the tax year.

Tax Credit allowance and taper –date currently delayed

It is planned to cut the allowance of £6,420 to £3,850. The taper rate is to be cut from 41% to 48%. This means that tax credit claimants with an annual income of over £3,850 annually will be worse off (this was to take effect from April 2016 but the date has been delayed).

State Pension Age

The Pensions Bill was amended so that women’s pension age reaches 65 in November 2018.

Single Tier State Pension from April 2016

Those reaching state pension age from that date will get the new single tier pension. A single amount will be awarded for 35 qualifying years of paid NI contributions. Under 35 years will get a reduced amount (min years of work from 7-10). This will be set a rate higher than the pension credit amount which is currently £151.20 weekly for a single person.

Housing Benefit Family Premium from April 2016

This is currently included as a premium for families with children when calculating tenant’s personal allowance at £17.45 weekly. The premium will be withdrawn from 1 May 2016 so tenants will get less housing benefit.

Leaving the UK from April 2016

Current rules allow for housing benefit and pension credit to be paid for up to 13 weeks of absence. This is being changed to 4 weeks with a few exceptions. (Tenants who are out of the UK at 6 April 2016 will have transitional protection). Tenants must ensure they tell the local authority and the Pension Service if they are to be out of the UK for more than 4 weeks to prevent overpayments of housing benefit and pension credit.

National Minimum Wage from April 2016

The minimum wage will be known as the Living Wage and will be increased to £7.20 per hour if 25 or over.

Personal Tax Allowance from April 2016

This is the amount you can earn before paying tax. The allowance is to be increased from £10,600 to £11,000 from April 2016.

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Download our Changes to your Housing Benefits leaflet for more information.