Welfare reform and changes to benefits
The UK benefits system is currently going through its largest overhaul in 50 years. There will be a long crossover period (lasting several years) as the government phases in new benefits to replace the old ones. This means that, for a few years, the rules for claiming benefits and what you’re entitled to will differ depending on where you live, what you need and when you start to claim.
At the time of writing, welfare reform plans in Northern Ireland, which are similar to the plans in Great Britain, have been delayed and it’s unknown when they will be passed by the Northern Ireland Assembly.
The changes include the introduction of:
- Personal Independence Payment (PIP) to replace Disability Living Allowance (DLA) for people between the ages of 16 and 64. All existing adult DLA claimants who weren’t aged 65 years on or before 8 April 2013 will be invited to claim PIP in the next few years.
- Universal Credit to replace six current benefits (Income Support, Housing Benefit, income-related Employment and Support Allowance (ESA), income-based Jobseeker's Allowance (JSA), Child Tax Credit and Working Tax Credit).
- The benefit cap, which limits the total amount of benefit you can claim. This cap doesn’t apply if you meet the Department of Work and Pension’s (DWP) definition of someone who has a terminal illness – see our information about special rules for more on this.
- The bedroom tax, which is the popular name for a restriction on the amount of help that some people can get with their rent.
- Local Welfare Assistance, which covers help for some types of emergencies or if you need help setting up home or staying in your home.
- Council Tax Support (or Council Tax Reduction), which helps people on low incomes to pay their council tax bill.
The benefit cap
This is the total amount that you (and your husband, wife or civil partner and/or children) are allowed to get from the main out-of-work benefits and children’s benefits. If the benefits add up to more than your cap level, your Housing Benefit will be reduced. If you’re on Universal Credit a similar cap applies.
This is a complex area because not all benefits are taken into account and the benefit cap also doesn’t apply to everyone. See Who is exempt from the benefit cap, below.
The benefit cap is:
- £500 a week for couples (with or without children) and single parents
- £350 a week for single people
You may be able to get Discretionary Housing Payments if your Housing Benefit is restricted due to the benefit cap.
The benefit cap doesn’t apply if you:
- have a terminal illness (as defined by the DWP)
- have reached Pension Credit age, unless you or your husband, wife or civil partner are continuing to claim income support, income-related ESA or income-based JSA
- were previously working for 50 weeks out of the last 52 weeks, were not claiming income support, Employment and Support Allowance or Jobseeker’s Allowance while you were working and you lost your job through no fault of your own. This is known as the grace period and it lasts for 39 weeks
You’re also exempt from the cap if you or anyone in your household (a husband, wife or civil partner or dependent child) is getting any of the benefits listed below. This exemption also applies if you’re in hospital and would otherwise be getting these benefits:
- Attendance Allowance.
- Disability Living Allowance.
- Housing Benefit if you’re living in supported accommodation (sometimes called ‘specified’ accommodation).
- Industrial injuries benefit
- Personal Independence Payment.
- War Disablement Pension or War Widow's, Widower’s or Surviving Civil Partner’s Pension.
- Armed Forces Compensation Scheme Guaranteed Income Payment.
- Armed Forces Independence Payment.
You’re also exempt from the cap if you or your husband, wife or civil partner is getting:
- the support component of Employment and Support Allowance
- monthly earnings (or combined earnings, if you are a member of a couple) of at least £430
- working tax credit even if you have been awarded a ‘nil entitlement’ – you must be working the relevant number of hours according to your circumstances
Housing Benefit in exempt supported accommodation doesn’t count towards the benefit cap. This type of accommodation includes:
- a resettlement place (accommodation originally funded by a government resettlement grant which helps people to lead a more settled way of life)
- accommodation where you’re provided with care, support or supervision
- accommodation you were admitted to in order to meet your care, support or supervision needs
- temporary accommodation for people who’ve left home because of domestic violence
- a local authority hostel
More on the benefit cap
This is the popular name for restrictions on Housing Benefit for people who rent from a council or housing association. People under Pension Credit age who are considered to have spare bedrooms and claim Housing Benefit or Universal Credit will have a deduction made from the help they get with their rent. The deductions apply to almost everyone of working age, even if they’re disabled. If you’re affected you may be able to get a Discretionary Housing Payment.
Local Welfare Assistance
The government is making some assistance available at local level (through councils) instead of nationally (through the DWP). This covers help for some types of emergencies or if you need help setting up a home or staying in your home. The assistance available is different in England, Wales, Scotland and Northern Ireland. They all have a limited budget.
- England - the assistance schemes have different names in different areas. Contact your local council for more information about the help available in your area. If you live in a shire county, this help comes from the county council, not the district or borough council.
- Wales - the scheme is called the Discretionary Assistance Fund .
- Scotland - the scheme is called the Scottish Welfare Fund .
Northern Ireland has a similar scheme called the Social Fund scheme of Community Care Grants, Crisis Loans and Budget Loans. It’s likely these will be replaced by a Discretionary Support scheme but the date for this isn’t known. See nidirect for details.
Council Tax Support (or Council Tax Reduction)
This helps people on low incomes to pay their council tax bill. This, again, is one of the welfare reforms designed to make assistance available at a more local level. The reform means that the amount of help you get varies in different areas because the rules are made by local councils. The Council Tax Support (or Council Tax Reduction) page has more about differences in each nation around the UK.
Throughout the pages in this section, we have tried to explain which benefits will be affected by these changes. However, as the timings for these changes differ across the UK, we cannot be specific about what changes will affect you as an individual and when.
If you’re getting one of the benefits that’s being phased out, you don’t need to do anything until the Department for Work and Pensions, or Social Security Agency in Northern Ireland, contacts you and lets you know what you need to do.
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