Big changes are coming to benefits, introduced by the Government. If you receive benefits, this will affect you.
This page will help you work out how you will be affected. Not all the details have been announced yet - visit the DWP website for more information.
The Benefits Cap
The Benefit Cap will be rolled out nationally from 15th July 2013 to the end of September 2013.The total amount of benefit that you can receive will be capped. The Government will add up how much money you can get from a range of benefits including Housing Benefit, Child Benefit, Tax Credit and Employment and Support Allowance. If the total amount comes to more than the maximum you are allowed, your Housing Benefit will be reduced.
The maximum amount you will be able to receive will be:
- £500 per week for single parents
- £500 per week for couples with children
- £350 per week for single people without children
Remember that receipt of the following benefit by someone in the benefit household may help prevent the cap being applied
- Pension Credit
- Working Tax Credit
- If a member of your household is claiming Disability Living Allowance
- Attendance Allowance
- The support element of the Employment and Support Allowance.
- Industrial Injuries
- War Pension
- Earning over £430 topped up with Universal Credit
It will not affect those:
- Over State Pension Credit age
- Those who lose their jobs having been in work for the previous twelve months (exempt for a period of nine months).
- One further exemption is those who are in supported accommodation (most would be in effect exempt as Housing Benefit does not count as income for these clients in the Benefit Cap).
Under Occupation in Social Housing
Under occupation in Social Housing sometimes referred to as ' bedroom tax' or 'spare room subsidy' began in April 2013 meaning that your Housing Benefit could be reduced if your home is considered to be too big.
Customers who are of working age, renting social housing and living in properties which are considered too large for their needs will have their Housing Benefit restricted. It does not matter how you are using a spare room, this new rule will apply. You will only be able to claim Housing Benefit for the number of bedrooms the DWP says that you need - this is called the Bedroom Standard or you may have heard it referred to as the 'Bedroom Tax'.
If you have one or more bedrooms than you need your Housing Benefit entitlement will be reduced by 14% for one spare bedroom or 25% for two or more spare bedrooms.
This could affect you if you:
- are 16 to 61 years of age
- even if you only get a small amount of Housing Benefit - for example if you are working
- even if you are sick or disabled
You will not be affected if:
- you are of pension age. Pensioners will not have their Housing Benefit reduced if they have spare bedrooms.
- approved foster carers will be allowed an additional room, whether or not a child has been placed with them or they are between placements, so long as they have fostered a child, or become an approved foster carer in the last 12 months
- adult children who are in the Armed Forces but who continue to live with parents will be treated as continuing to live at home, even when deployed on operations
- you live in a one-bedroom flat or bedsit.
How much rent will you have to pay if you have too many bedrooms?
From April 2013 the amount of Housing Benefit that is paid will be reduced by:
- 14% of the eligible rent if there is one bedroom too many
- 25% of the eligible rent if there are two or more bedrooms too many
- a couple live in a two-bedroom flat costing £70.00 per week in rent . They are both under 61-years-old and Housing Benefit covers the full rent. Under the new rules they will have one spare bedroom. Their Housing Benefit will be reduced by 14% of their rent (14% of £70.00 = £9.80) so their Housing Benefit will be reduced by £9.80 to £60.20 per week and they will have to top up the £9.80 themselves.
- a single person lives in a three-bedroom house costing £70.00 per week in rent. They are under 61 years of age and Housing Benefit covers the full rent. Their Housing Benefit will be reduced by 25% of their rent ( 25% of £70.00 = £17.50) so their Housing Benefit will be reduced by £17.50 per week to £32.50 per week and they will have to top up the £17.50 themself.
What can I do?
Check first if you are likely to be affected - contact your landlord to find out.
If you find out that you may be, check to see if you will be able to pay the total rent that may become due. It is also worth checking that you are claiming all the benefits you are entitled to and looking at ways to reduce your outgoings, for example by swapping gas and electric suppliers.
If you are definitely going to be affected and you do not think you can afford the rent that will be due, you may want to look into whether you can ‘downsize’ to a smaller home. Again, contact your landlord.
If you are a Social Tenant in rented property and you want a house swap or flat swap you can use Homeswapper. This is also called a mutual exchange. If you live in a housing association property you could be able to swap your property.
If this is impossible, and if you need an extra room because of illness or disability, or if you foster children but are between placements, or have any other special needs, then from April 2013 you might be able to get a ‘Discretionary Housing Payment’ from the Council to cover the shortfall. But each case will be considered individually and any award is likely to be time-limited. Further information can be found on the Housing Federation What You Need to Know about Housing Benefit Changes Factsheet.
Universal Credit is not expected to be introduced in Worcester until at least October 2013.
You will be affected if you receive any of these benefits:
- Bereavement Allowance
- Carers Allowance
- Child Benefit
- Child Tax Credit
- Income-related Employment and Support Allowance
- Guardian's Allowance
- Housing Benefit
- Income Support
- Income-based Jobseeker’s Allowance
- Maternity Allowance
- Severe Disablement Allowance
- Widowed Parent's Allowance
From October 2013, new claims for benefits will be paid through Universal Credit. From April 2014, if you already receive benefits you will start to move onto Universal Credit.
Under Universal Credit you will receive all your benefits including your Housing Benefit, in one monthly payment. You will need a bank, building society or Post Office account for your benefit to be paid into.
Your Housing Benefit will no longer be paid directly to your landlord. This will mean you will have to make sure you use your money to pay your rent - because if you don’t you will risk losing your home.
The rest of your money should then be used to pay your bills and household expenses. Remember, you will receive this money monthly so you will need to think about budgeting as well as how you are going to pay your bills.
So why not get yourself ready and get budgeting advice now?
- Top Ten Budgeting Tips - learn how to budget to help you save money
- Money Advice Service. - free unbiased independant information
- My Advice Gateway is a free resource to help you quickly find the information you need to claim benefits, access help and support or look for a job or training opportunities. Other services include sections on banking, insurance and how to manage debt.
Choosing a bank account for your Universal Credit payment
To receive Universal Credit, you’ll need to have a bank or building society account, or an account with an alternative provider like a credit union. The Money Advice Service explains the options available and the pros and cons of each one. That way, you can choose an account that’s suitable for you or check whether the one you have is okay.
Personal Independent Payment (PIP)
Personal Independence Payment (PIP) will replace Disability Living Allowance (DLA) for people who are 16-64.
PIP is designed to help towards the extra costs of living with a disability or ill health. It is based on the impact of a persons condition has on them, not what the condition is.
PIP awards will be reviewed on a regular basis to make sure they are still meeting the needs of the person with the disability or illness.
All new claimants of a disability benefit will apply for PIP from June 2013, and from October 2013 the DWP will start to re-assess people who currently claim DLA.
DLA will continue for qualifying people who are under 16 who are aged 65 or over on 8 April 2013.
The DWP have created a checker to show you if or when PIP will affect you and when you will be able to claim. You can use their checker HERE
DWP has a dedicated page for further information
What's happening to other benefits?
- The following benefits are also changing:
- Council Tax Benefit will be abolished in April 2013 and replaced by a system of localised support
- Pension Credit will be amended from October 2014 to include help with eligible rent and dependent children
- Social Fund is also being reformed to introduce new local assistangnce. Worcester City Council has been examining how best to support local residents from April 2013 has developed a scheme which best meets the needs of its most vulnerable customers. Eligibility criteria is used to ensure that the funds are targeted to the most vulnerable residents with the greatest needs.Access to the fund is via a referral from a support agency. We are unable to accept direct applications from households. No cash payments will be awarded, eligible customers will receive goods and services via vouchers and direct delivery of white goods and furniture to their home.Applications are made by telephone to the Worcestershire Hub (Hub) from the support agency.The new Discretionary Welfare Assistance Scheme in Worcester went live on April 2nd 2013. For more information about the scheme click here
What is working age and pension age?
In April 2013, when many of the benefit changes will take affect:
- working age is between 16 and 61 years old
- pension age will be around 61 years and 6 months.
Please use the following information and links for further advice:
West Midlands Housing Group are one of the largest and most successful housing groups in the Midlands. With the help of Media SHYPP they have recently made a film about the impact of Welfare Reform. They want to make all of their social housing customers aware of this film, along with customers of other housing associations and any organisation or persons which the Welfare Reform changes may affect.
Watch the video now:
After watching the video only contact West Midlands Housing for further advice if they are your landlord. If you have a different landlord contact them directly or alternatively contact the Housing Advice Team using the details below.
- Click here to watch videos by Rooftop Housing on Welfare Reform
Further information and advice
- Worcester Citizens Advice Bureau & WHABAC (Worcester Housing and Benefits Advice Centre) provide a free, independent, confidential and impartial service. They offer a range of services, supporting people, providing information / advice and directing people to the best source of help for their issue.
- Shelter the housing and homelessness charity, give free independent advice and information on housing to help you understand your rights and options.
- The Housing Advice Team contact details
I am a landlord of private rented accommodation and need some advice
From a landlord’s point of view, this is obviously the biggest concern. As you know, Housing Benefit for private tenants has already changed significantly in the last couple of years, but bigger changes are still to come. Housing Benefit in its current form will be abolished and replaced with a housing element contained in the new benefit, Universal Credit. This will be paid wherever possible to the claimant, not the landlord, monthly and in arrears. There will be some protection in place to ensure that vulnerable tenants or those with substantial rent arrears can have their rent money paid direct to the landlord, but as yet we do not know the details of how this will work or which tenants it will apply to.
Keeping on top of Rent Arrears
As a landlord you don’t need telling that whatever may be happening with your tenant’s benefit they need to keep on top of any problems and up to date with their rent. If tenants need help or advice they should make sure they get advice promptly and never leave a benefit issue unresolved.
Until Universal Credit comes in; if a landlord is concerned that their tenant may be receiving Housing Benefit, but not using it to pay the rent, they should report their concerns direct to the Council’s Housing Benefit Service
Data protection considerations might mean that the Council cannot share any information with the landlord or even confirm that the tenant is actually claiming Housing Benefit. The Council’s Housing Benefit Service may be able to assist you in where payments will be paid – you should contact them directly for further information.
- Homestamp - Welfare Reform Leaflet
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