News archive

More welfare changes are coming into force. Here’s a round-up of the latest developments and how you could be affected if you claim benefits.

Universal Credit

Changes to work allowance:

A work allowance is the amount of money you can earn before your benefit is affected. From April, if you’re working and have no children or a disability, you’ll no longer be entitled to a work allowance. The government previously disregarded the first £111 of your monthly wages but this has now stopped and, as a result, your Universal Credit payments will go down. This change will apply to both new claims and current claims.

For example:

A single person, without children or a disability, who claims Universal Credit will now have all their earnings from work taken into account and they could lose up to £72.15 a month from their award.

If you’re working and you have a disability or you have children, you’ll still get a work allowance but it’ll reduce to £192 per month if you’re receiving the housing costs element of Universal Credit and £397 per month if you don’t.

Changes to childcare costs:

The childcare costs element of Universal Credit currently pays for 70% of your registered childcare costs up to a monthly limit of £532 for one child, or £912 for two or more children. From April, this has increased so that you’ll be able to claim back up to 85% of your childcare costs up to a monthly limit of £646 for one child, or £1,108 for two or more children.

Housing Benefit

The government has said that the benefit cap (the maximum amount of benefits you can claim) will reduce from £26,000 a year to £20,000 - equal to an income of £384 a week. The date for this change has not yet been set but it could happen this autumn, and it could have an impact on the amount of rent you’ll have to pay.

For example:

Before the benefit cap is introduced, a family of two parents and three children claiming Job Seekers Allowance have a rent charge of £100 a week (all calculations are based on 2015/16 rates and may change). Currently, the family receive £432.98 a week in benefits made up of: Job Seekers Allowance of £114.85 a week, Child Benefit of £48.10 a week, Child Tax Credit of £170.03 a week, and therefore Housing Benefit of £100 a week, which means the family has no rent to pay.

After the benefit cap is introduced benefits will be capped at £384 a week, which means the family will get the same amount of Job Seekers Allowance, Child Benefit and Child Tax Credit but they’ll have £48.98 of rent to pay each week.

Other changes to Housing Benefit:

• From 31 May, we expect the period of time that someone can be treated as still occupying their home and claiming Housing Benefit while being temporarily absent abroad will reduce from 13 weeks to just four weeks. Temporary absences within the UK aren’t yet affected.

• Backdating of Housing Benefit is reducing from six months to just one month for working age tenants.

• Withdrawal of the family premium in Housing Benefit (£17.45 when a claimant has one or more dependant children) will take effect from May. Removal of the family premium will affect both new claims and new births from 1 May.

Pensions

From 6 April, the government has introduced a new State Pension for people reaching pension age. This replaces the basic State Pension and State Second Pension (before 2002 this was called State Earnings-Related Pension Scheme or Serps). This will affect all women born on or after 6 April 1953 and all men born on or after 6 April 1951.

The new pension is designed to be much simpler and will consist of a single amount, awarded in full, if you have 35 qualifying years of National Insurance contributions. If you don't have the contributions required for the full pension, as long as you have a minimum number of qualifying years (between seven and 10 years) you’ll still receive some State Pension. If you don't have the minimum number of qualifying years, you won’t qualify for the single tier pension. Any contributions made under the current pension system can be used towards the new State Pension. If you qualify for the full amount you’ll receive around £155 a week.

Please remember, if your pension is lower than the maximum amount of £155 a week, it can still be topped up by claiming Pension Credit. The guarantee credit element of Pension Credit will continue to provide a safety net if you’re a pensioner on a low income.

Our Debt and Money Advice Team is on hand to help you through the changes. We provide a friendly, professional service and advice is always confidential. You can phone the team on 01204 328000 or email: moneyadviceteam@boltonathome.org.uk.