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. Most of the changes also apply in Northern Ireland although there may be differences in the date when this happens.

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 families with a disabled child are not expected to claim Universal Credit in most areas. However, this is gradually changing as the government rolls out the Universal Credit full service to more and more job centres. In these full service areas, a family with a disabled child will be asked to claim Universal Credit if they have fewer than three dependent children and they try to make a new claim for any means-tested benefit or for tax credits. 

By September 2018 the full Universal Credit service should apply to new claims by families with fewer than three dependent children 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 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 5 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 families whose dependent children were all born on or after 6 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

Since 3 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 for the over 25s and to a cut of £44 for the under 25s.

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 that are treated as 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.

This cut will also apply to disabled adults who claim Universal Credit on the basis that they are incapable of work rather than ESA.


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

Since 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) in a Universal Credit claim. There are  exceptions to these rules for vulnerable groups, including disabled young people who either get the daily living component of Personal Independence Payment or who have been assessed as being unfit to work.


New bereavement support allowance

A new bereavement support allowance is being introduced to replace current bereavement benefits such as Widowed Parent's Allowance.

The bereavement support allowance includes a lump sum payment of £3,500 plus 18 monthly payments of £350 for those with at least one dependent child. Unlike the current Widowed Parent's Allowance, which can potentially continue until your youngest child turns 20, the new beraevement allowance stops after only 18 months.

It is estimated that 75 per cent of bereaved parents will end up receiving less support under this new benefit.


Tax Free Childcare

Starting from 28 April, the government is introducing new online tax free childcare accounts for working families. For each 80p that you pay into an account, the government will contribute 20p. The most that you can contribute for a disabled child is £16,000 per year, meaning that the maximum government contribution will be £4,000 a year.

If you access tax free childcare, you cannot receive any tax credits or Universal Credit payments. Most families will be better off on tax credits/Universal Credit, so get advice before applying for tax free childcare.

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.