Significant changes are being made to the welfare system. These will eventually lead to many means-tested benefits being abolished and replaced by the universal credit, while the government has also introduced a cap on the total amount of benefit that claimants can receive.
What’s changing and will I be affected?
Between 2013 and 2017, six existing benefits will be replaced with a single payment called the universal credit. This change will affect both working and out-of-work families receiving: income support, income-based jobseeker’s allowance, income-related employment support allowance, housing benefit, working tax credit and child tax credit.
Other major changes include a cap on the amount of benefit that you can receive in total, which will affect those receiving housing benefit initially, and then those who receive universal credit. The benefit cap will apply to combined income from the main out-of-work benefits, which are jobseeker’s allowance, income support and employment and support allowance. It will also apply to other benefits such as housing benefit, child benefit, child tax credit and carer’s allowance. Non-cash benefits such as free school meals will not be included in the assessment of benefit income.
Your housing benefit may also be cut if you are of working age, live in social housing and have more bedrooms that the government believes that you need. This is known colloquially as ‘bedroom tax’.
Council tax benefit is being abolished and replaced with new local-authority run schemes called council tax reduction schemes, while disability living allowance (DLA) is being replaced by a new personal independence payment, or PIP.
There are also changes being made to pension credit to align it with universal credit.
When will the changes take place?
The welfare changes will take place in stages.
Universal credit will be rolled out nationally for new benefit claimants from October 2013, while there have been pilot schemes already in some London boroughs. By 2017, all existing benefit claimants will have migrated to the new scheme.
The ‘bedroom tax’ was introduced in April 2013, along with the rollout of the benefits cap and the changes to council tax benefit. Those who currently receive DLA will be gradually reassessed and migrated onto PIP from 28 October 2013. From October 2015 all those still receiving DLA will be contacted with a view to moving to PIP.
The changes will be launched in April 2014 in Northern Ireland, six months later than the rest of the UK.
Help that is available
If you are affected by the changes, the following organisations can help with information and advice:
- There for You offers financial help, support and advice for UNISON members in financial difficulty. Go to There for You
- Your local authority may be able to help if you are in difficulty. Find your local authority
- Your local Citizens Advice Bureau can help with face-to-face advice. Go to Citizens Advice Bureau
- Shelter, the housing charity, runs a national helpline staffed by trained advisors. Go to Shelter
- Disability Rights offers factsheets for those with a disability, as well as a helpline. Go to Disability Rights
- Gingerbread. The charity for single parents provides support and advice. Go to Gingerbread
- Turn2us, a charitable service can help you to access benefits and grants. Go to Turn2us
UNISON works hard to make a difference on issues such as welfare reform that affect our members.
We do this by talking to MPs, the government and the media about the impact changes could have on our members, and by campaigning through local branches.
The more members UNISON has, the greater influence we can have.
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The government is capping the amount of income a ‘household’ can receive from the benefits system, but claimants should not assume that a household means anyone that lives with them.
For the purposes of the system, a household is defined as an adult, their partner (if they have one) and any children that they have who are aged under 18.
If any other adult relatives (such as brothers or sisters) or even adult children live in the same property, the government does not take their income into account as part of that family’s benefits package.
How are working tax credits and child benefits affected?
Working tax credits will be part of the new universal credit, which is being gradually phased in. Until this happens in your area, your entitlement to the credits should not change.
However, you may be affected by recent changes to working tax credit that came in April. Under these changes, in order to receive the credit couples must work at least 24 hours a week, instead of the previous 16, with at least one person working 16 hours.
Child benefit will not be part of the universal credit. However, the government has already introduced a system whereby households with one earner paid over £60,000 receive no child benefit, or must pay it back through the tax system. Families with one earner on over £50,000 and under £60,000 receive a proportion of their child benefit.
How is pension credit changing?
While most people who will be affected by the welfare changes are of working age, pension credit, which tops up the income of many pensioners, is changing too.
Benefits that are paid to working age claimants, as part of universal credit, will be paid to those of pensionable age under pension credit. Instead of receiving housing benefit, you will receive a housing credit as part of your pension credit.
You can ask for this to go straight to your landlord if you prefer. Pension credit will also include additional amounts for dependent children as child tax credit is being abolished.
There is likely to be a savings limit of £16,000 for pension credit. At present there is no limit.
If your partner is under pension credit age and you are over it, you will no longer be able to make a new claim for pension credit. Your partner will have to claim universal credit instead. However, if you are already claiming pension credit you can continue to do so.
How will I be affected by the changes to housing benefit?
There are two changes happening that could affect the amount of housing benefit that you receive. The first is the benefit cap, which means that no household can receive more than £500 a week of benefits for families with children or £350 a week for an individual. Housing benefit is counted as part of this cap, so if you currently receive more than this you could see your benefits fall.
Council and housing association tenants could also be affected by a new under occupancy rule that the media has dubbed ‘bedroom tax’.
The amount of rent used to calculate how much housing benefit you’re entitled will be cut by a fixed percentage if you have spare rooms. Housing benefit will be cut by 14% if you have one extra bedroom in your property or by 25% if you have two or more extra bedrooms.
What can I do if I am unhappy with the way that my benefits have been assessed?
Along with the long list of welfare reforms, the government is changing the way that claimants can appeal benefits decisions. For universal credit and personal independence payment, instead of having a month to appeal in writing and having your appeal directly passed on to a tribunal, the new rules mean you have to ask the DWP to reconsider its decision first.
To do this, contact the DWP by telephone or in writing, and make it clear why you’re asking for mandatory reconsideration (the official name for reconsidering the decision). The telephone number and address will be on your decision letter.
You must do this within one month and you cannot appeal directly to the Tribunal Service until you have received the decision (which should be within 28 days), You can then appeal directly to the Tribunal Service within a month of the decision by filling in the form found here and sending it to the court.
What is happening to council tax benefit?
If you are used to receiving some help paying your council tax bill, you might find that you receive less help under the new system. Council tax benefit has been replaced by council tax reduction schemes, which are run by local councils and give the council discretion to decide who gets help.
Local authorities in England will get funding to help people pay their council tax and Scotland and Wales will come up with their own local schemes. Pensioners receiving help with their council tax are not affected by this change.
What is happening to disability benefit?
Disability living allowance (DLA) is being gradually replaced by personal independence payments (PIPs). These consist of a daily living component for those whose disability affects everyday living, and a mobility component for those who struggle to move around because of their disability. New claimants will have to apply for a PIP but current DLA claimants are still receiving DLA.
The government is starting to reassess existing DLA claimants for PIPs, but only those whose circumstances have changed.
Eventually everyone who receives DLA will have to be reassessed for PIP, but this is not expected to happen until 2015. Northern Ireland will join this system later. Those who currently receive DLA need do nothing now, but should wait for a letter from the DWP.
What is universal credit?
Universal credit is a new payment that replaces six current means-tested benefits. It will be paid monthly in arrears to one person in a household. The six benefits that it replaces are:
- income support;
- income based jobseeker’s allowance;
- income-related employment support allowance;
- housing benefit;
- working tax credit;
- child tax credit.
Will I be affected by the changes?
The changes to the benefit system are wide ranging. Most people of ‘working age’ who are on benefits or occasionally claim benefits will be affected.
Working age is defined as below the qualifying age for pension credit, which is the same as the age at which women are eligible for the state pension.
If you were 61 before 6 October 2012 you should not be affected by the changes unless you have a younger, working-age partner, in which case you may be affected when universal credit is phased in.
All households where someone receives one of the following benefits will be exempt from the benefits cap:
- disability living allowance;
- personal independence payment;
- industrial injuries benefit;
- war disablement pension and the equivalent payments from the Armed Forces Compensation Payments Scheme;
- attendance allowance;
- the support component of employment and support allowance.