The government in Westminster is introducing a series of changes which could affect you if you currently claim housing benefit and council tax benefit.
In April 2013 housing benefit for people of working age will be reduced if they are living in a property which is too big for them. The Government has said that it will introduce new size criteria for housing benefit claims in social housing. This will apply from April 2013 to tenants of working age. The power to do this is contained in the Welfare Reform Act, which received Royal Assent on 8th March 2012.
What do the changes mean?
The size criteria the Government is to introduce for people living in houses rented from Council's or housing associations will restrict housing benefit to allow for one bedroom for each person or couple living as part of the household, with the following exceptions:
- Children under 16 of same gender expected to share
- Children under 10 expected to share regardless of gender
- Disabled tenant or partner who needs non resident overnight carer will be allowed an extra bedroom
Who will be affected?
All claimants who are deemed to have at least one spare bedroom will be affected. This includes:
- Separated parents who share the care of their children and who may have been allocated an extra bedroom to reflect this. Benefit rules mean that there must be a designated ‘main carer’ for children (who receives the extra benefit)
- Couples who use their ‘spare’ bedroom when recovering from an illness or operation
- Foster carers because foster children are not counted as part of the household for benefit purposes
- Parents whose children visit but are not part of the household
- Families with disabled children
- Disabled people including people living in adapted or specially designed properties.
How much will people lose?
The cut will be a fixed percentage of the Housing Benefit eligible rent. The Government has said that this will be set at 14% for one extra bedroom and 25% for two or more extra bedrooms.
Other changes which have or which will take place are:
- From April 2012 “non-dependant” deductions will increase. A “non- dependant” is someone of working age who lives with you, such as a grown up son or daughter. An amount is taken off your housing benefit, ranging from £12.40 a week to £80.00 a week (for Council tenant’s) depending on how much the “non-dependant” earns or receives in benefit. There is also an amount taken off your council tax benefit ranging from £3.30 a week to £9.90 a week.
- From April 2012 anyone who has been in receipt of Contribution Based Employment and Support Allowance for 12 months will have their payments stopped. This means that you may be able to reapply for Income Based Employment and Support Allowance if your household is on a low income. If you do not qualify for the income based element your overall household income will drop by the amount of Contribution Based Employment and Support Allowance, this may result in an increase in Housing Benefit and Council Tax Benefit depending on your overall circumstances.
- From April 2013 the Government intends to implement an overall Benefit Cap. This means that household benefits will be capped at £26,000 a year, equivalent to £500 a week so out-of-work families do not receive more than the average household weekly income. For single households the cap may be set at £18,200 a year, equivalent to £350 a week. It is proposed that families will be given at least nine months "grace period" to adapt to the loss of benefits.
- From April 2013 the Government is introducing Personal Independence Payments which will replace Disability Living Allowance for those aged 16-64. This replacement benefit will in most cases be determined by initial and ongoing medical assessments. For those already in receipt of Disability Living Allowance there will be a phased reassessment of their circumstances to establish eligibility to Personal Independence Payments.
- In October 2013 the Universal Credit will be introduced for new claimants – this will replace all means tested benefits, Tax Credits and Housing Benefit for those of working age. People who receive this benefit will be paid monthly and will be expected to pay their rent to us out of the amount they receive – rent payments will not be made direct to the Council other than in exceptional circumstances. People will also be required to do certain things before getting this benefit, such as looking for work if they are able. You will normally have to apply on-line. It is anticipated that all eligible claimants will be transferred to Universal Credit by 2017.
There are also other changes to the wider benefit system which may also affect you - for full information on these changes, go to the Briefing Note on Welfare Reform
If you are worried about these changes or have any questions about how they affect you, please contact our Finance Service on 0800 090 1004. You can also get advice and information from your local Citizen’s Advice Bureau or local advice agency – you can get their details on the Contacts page.