Ongoing benefit changes

Over the past few years the government has made a number of changes to the current benefit and tax credits system. Together these amount to the biggest shake up of the benefits system in generations.

These changes apply to England, Scotland and Wales. It is proposed that most of the changes will also eventually apply in Northern Ireland. Whether this happens, and the date the changes are introduced there, will depend on legislation being approved by the Northern Ireland Assembly.

Personal Independence Payment

Disability Living Allowance (DLA) is being scrapped for disabled people aged 16 or above. It is being replaced by a new disability benefit called the Personal Independence Payment (PIP).

Since June 2013, all new claims by disabled adults over 16 years old are for PIP and not DLA.

The government has also started the process of transferring existing DLA claimants onto PIP. Initially this was restricted to certain specific groups of DLA claimants - one of which was young people turning 16. The government has now started to re-assess adults with a long-term DLA award.

At the time of writing this only applies in certain specific postcode areas, but by late 2017 all existing adult DLA claimants should have been reassessed under the PIP system.

See our Personal Independence Payment page for more information.

Universal Credit

All means-tested benefits and tax credits for people of working age will be replaced by a new Universal Credit.

Currently the national roll out of Universal Credit only applies to new claims by single working people. Couples and families with children making new claims are being asked to claim Universal Credit in some jobcentre areas. However, for the time being this does not apply to families who have a child on Disability Living Allowance or Personal Independence Payment or who is severely visually impaired, apart from in a small number of areas where the full Universal Credit service is being trialled. 

In these full service areas, a family with a disabled child will be asked to claim Universal Credit if they try to make a new claim for any means-tested benefit or for tax credits. 

From May 2016, the government began to gradually roll out the full Universal Credit service to all other parts of the country. Initially it will be extended to five new job centre areas each month, with this  increasing to 65 new areas a month by early 2018. By Sept 2018 the full Universal Credit service should apply to new claims everywhere in the country.

The government also intends to move existing claimants of means-tested benefits and tax credits onto Universal Credit. This is scheduled to start in July 2019, being completed by March 2022.

Contact a Family is concerned that many families with disabled children will be worse off on Universal Credit over time. This is as a result of cuts to the basic child disability element alongside other planned changes to universal credit outlined below. 

From Autumn 2016

Lowering of the household benefit cap

The benefit cap limits the maximum amount of benefits that out of work families can receive. The benefit cap was lowered on 7 November 2016 to £23,000 in Greater London and to £20,000 elsewhere. The government plans to introduce this from 7 November 2016.

Families with a dependent child on Disability Living Allowance or Personal Independence Payment will remain exempt from the benefit cap, as will families who work sufficient hours to be eligible for working tax credit (regardless of whether this is actually paid or not). The government has also said that it will introduce legislation later this year to ensure that all carers who are eligible for Carer's Allowance or who get a carer element in their Universal Credit will also be exempt.

Find out more about the benefit cap.

From April 2017

Limiting of the child element in tax credits and Universal Credit to two children

Normally the amount of tax credits you receive increases with your family size. This is because you receive an additional payment known as the child element for each child in your family.

Families will no longer receive an additional child element for a third or subsequent child born after 5th April 2017. This restriction applies to both existing claims for tax credits and to new claims.

Families with an existing claim for Universal Credit will also not receive a child element for a third or subsequent child born after that date.

Families with more than two children making a new claim for Universal Credit will instead be re-directed to make a tax credit claim.

In summary, you will only be affected by this policy if you have a third or subsequent child after 5 April 2017.

Scrapping of the
family element of child tax credit and the higher first child element in Universal Credit

The family element is a tax credit payment of £545 per year awarded where the claimant has at least one dependent child. This will be scrapped for new tax credit claims from April 2017.

From the same date, an equivalent Universal Credit payment known as the higher first child element will also be scrapped for families making new claims under the Universal Credit system.

Reduction in the amount of benefit paid to employment and support allowance (ESA)
claimants in the work-related activity group

From April 2017, disabled adults (including young disabled people) who claim ESA and who are placed in the work-related activity group (WRAG) will receive the same rate of benefit as those claiming Jobseeker's Allowance.This amounts to a cut of almost £30 per week.

The WRAG consists of people who have been assessed as being unfit to work but who are expected to undertake activities with a view to making them work-ready over time.

This cut will only apply to new claims made after that date and not to existing claimants. It will also not affect the most severely disabled ESA claimants who fall into the ESA 'support group' rather than the WRAG.

Introduction of the 'youth obligation' and restricting help with rent for 18-21 year olds

From April 2017, young people claiming Universal Credit will participate in an intensive regime of support from day one of their benefit claim. After six months they will be expected to apply for an apprenticeship, traineeship, gain work place skills or go on a work placement.

In addition, young people aged 18-21 who are renting a property will no longer automatically be entitled to the housing element (the equivalent of housing benefit). There are expected to be exceptions to these rules for vulnerable groups, including disabled young people.

New bereavement support payment

A new bereavement support payment is to be introduced to replace current bereavement benefits.

From April 2018

Support with mortgage interest (SMI) will be turned from a benefit into a loan

Home owners claiming certain means-tested benefits, including income support, can get payments towards the the interest on their mortgage.

From April 2018, SMI will be paid as a loan, with the help provided by government to be repaid upon sale of the house or when claimants return to work. This will apply to existing claimants getting SMI as well as to new claimants.

For further information on these changes contact our free helpline.