Welfare Cuts - time line
Benefits cuts - a brief guide 2012 - 2016
Introduction
Significant changes are being made to the benefits and tax credits system over the next few years because of the Welfare Reform Act 2012 which became law on 8 March 2012.
Provisions in the Act allow for:
- The introduction of Universal Credit and Personal Independence Payment
- Changes to Employment and Support Allowance (ESA), including a one-year time limit on payment of contributory ESA for people in the work-related group
- Other changes to social security and tax credits, includingprovision for a benefit cap; the localisation of Council Tax Benefit; new rules about the recovery of overpayments and the procedures for making an appeal.
Some of the provisions of the Act have taken effect immediately after the Welfare Reform Act 2012 became law, but others are scheduled for 2013 or later.
This page gives you a calendar of the main changes.
If you are worried about the effects that the changes to the benefits system will have on your personal situation, we recommend that you discuss this with an expert benefits adviser. You can use the Find an Adviser tool on our website to find a local one.
Benefit changes 2013
January 2013
Child Benefit
Change: From 7 January 2013, a new income tax charge will be applied where a person has an individual income of over £50,000 and they or their partner gets Child Benefit. This will be applied as extra income tax payable by the person whose income is above £50,000.
The amount of the charge will depend on how much that person's individual income exceeds £50,000:
- Where a person has an income between £50,000 and £60,000, the charge applied to their income tax will be 1% of the Child Benefit paid for every £100 of income between £50,000 and £60,000. The income tax charge will always be less than the amount of Child Benefit payable.
- Where a person has an income of over £60,000 the charge will be equal to the full amount of Child Benefit payable.
- Couples with a combined income of over £50,000 will not be affected, unless either one of them has an individual income of over £50,000. For example, where two members of a couple both earn£35,000 they will not be affected by this change.
Child Benefit can continue to be paid to you or your partner even if one of you is liable for the charge. The amount of Child Benefit you can claim and receive is unaffected.
You can decide not to receive Child Benefit if you or your partner do not wish to pay the new charge. You will remain technically entitled to Child Benefit, even if you choose not to have it paid. This is in order to protect your entitlement to national insurance credits, which will count towards your State Retirement Pension entitlement. You can change your mind at any time, but the person who has an income above £50,000 may become liable for a charge when Child Benefit becomes payable again,
This new charge will affect single income and two income families differently:
- A single income family with earnings over £50,000 will lose some or all of their Child Benefit
- A couple where both earn up to £50,000 (potential joint income of £100,000) will not be affected
For more information, see the HM Revenue and Customs information on the Child Benefit income tax charge (link opens in a new window)
The Guardian has also published a useful guide to Child Benefit changes and what they mean (link opens in a new window).
April 2013
Appeals process changes
The Department for Work and Pensions (DWP) is revising its appeals process for the benefits it administers, and child maintenance cases. The aim is to make sure more appeals against DWP decisions are resolved without being referred to
Her Majesty’s Courts and Tribunals Service (HMCTS).
The revised approach will
focus on:
- Preventing disputes
- Reducing the escalation of disputes
- Resolving disputes
- Learning from disputes.
The following changes will help to deliver these objectives:
Mandatory reconsideration
When a person receives a decision from DWP that they dispute, they will have to request that the Department conducts a ‘mandatory reconsideration’ before being allowed to lodge an appeal. This reform aims to resolve more disputes at an earlier stage and help ensure that people receive their correct entitlement earlier.
Direct lodgement
People who want to appeal after mandatory reconsideration will need to send their appeal directly to HMCTS. This change will align the appeals process for the Social Security and child maintenance jurisdiction with the other major tribunal jurisdictions within HMCTS. It will allow DWP to focus on its key role as a party to appeals.
Time limits
The introduction of the changes is an opportunity to introduce time-limiting on appeals responses. DWP is currently in discussions with the Tribunal Procedure Committee as to what these limits
might be.
Mandatory reconsideration and direct lodgement will be introduced in April 2013 for Universal Credit and Personal Independence Payment and October 2013 for all other DWP administered benefits and child maintenance cases.
Benefit cap
As part of the Welfare Reform Act, from April 15 2013, the Government is introducing a cap on the amount of benefits a working-age household can receive, capped at the level of the average earnings of a working family.
This will be trialled in four London boroughs - Bromley, Croydon, Enfield and Haringey - from April with national roll out over the summer of 2013.
See our Benefit Cap information sheet for further details
Benefits and tax credit rates
Most benefit rates will only be uprated by one per cent each April until 2015, as announced by George Osborne, the Chancellor, in his Autumn Statement 2012.
Council Tax Benefit
Change: Council Tax Benefit is to be replaced by localised support for Council Tax. Local authorities will set up new schemes to support people in their own areas within a 10% reduced budget. This will only affect people of working-age who currently receive Council Tax Benefit.
See the Turn2us localising support for Council Tax information sheet.
Disability Living Allowance (DLA) and Personal Independence Payment
Change: The Government is to start replacing DLA with a new benefit called Personal Independence Payment (PIP) for people of working age.
This will involve the introduction of ‘objective assessments’ to decide eligibility. The stated intention is to target support on those most in need through this new benefit. The government is hoping for a 20% reduction in expenditure by 2017 by bringing in this process.
From 8 April 2013 the first stage of PIP will start with people claiming for the first time who live in the north-east and north-west of England. This is the area covered by Bootle Disability Benefits Centre (link opens in a new window).
If you do not live in one of these areas you will still be able to claim DLA until June 2013.
See the Turn2us Personal Independence Payment information sheet
Housing Benefit (HB)
Changes:
Bedroom size criteria
- In England, Wales and Scotland: Size criteria will apply in the social rented sector (e.g. council and housing association properties) replicating the size criteria that applies to Housing Benefit claimants in the private rented sector under the Local Housing Allowance rules. This means that people living in houses larger than they need (under-occupiers) will have to move to somewhere smaller or make up the difference in rent because their Housing Benefit will be reduced with a:
- 14% cut in Housing Benefit if you under-occupy by one bedroom
- 25% cut in Housing Benefit if you under-occupy by two or more bedrooms
- In Northern Ireland, bedroom size criteria is also expected to apply from April 2013. However this remains subject to approval by the Northern Ireland Assembly and the Northern Ireland Executive. Until then, current arrangements will remain in place. See NI Direct website for more information for more information on potential changes to Housing Benefit from 2013
Local Housing Allowance rates
- LHA rates will be increased in line with the Consumer Price Index instead of the market rents in each area. The connection with actual rents will be lost.
For more information on Housing Benefit, see our information sheets HB (England, Scotland, Wales) HB (Northern Ireland).
Social Fund
England and Wales
- Crisis Loans when waiting for benefit claims to be processed, and Budgeting Loans are to be replaced by a 'payment on account' system
- Other Crisis Loans and Community Care Grants are to be abolished with the budget being passed to Local Authorities who may or may not introduce their own system of assistance - there is no requirement for them to do so.
See the Department for Work and Pensions website (link opens in a new window) for more information
Scotland
New Scottish Welfare Fund (SWF) to administer Community Care Grants (CCGs) and Crisis Grants (CGs) in Scotland. An additional £9 million will be allocated to this next year.
See Turn2us news item on the Scottish Welfare Fund announcement (22 October 2012)
Northern Ireland
Welfare Reform Bill is not yet law in Northern Ireland. If it becomes law, there will be changes to the Social Fund in Northern Ireland.
See NI Direct information on Changes to the Social Fund in Northern Ireland (link opens in a new window)
Tax Credits
Change: Any rise in income of £5,000 or more during the award year will be taken into account when finalising your Tax Credit award. Previously only income rises of £10,000 or more were taken into account.
Universal Credit
The current complex system of working-age benefits and Tax Credits is to be replaced by a new benefit called Universal Credit. National introduction will start in October 2013. In April 2013, the Department for Work and Pensions, working with HM Revenue and Customs and selected local councils, will launch its Pathfinder project to introduce Universal Credit to claimants within certain areas of the North-West of England.
This "pathfinder" stage aims to ensure that Universal Credit is ready to go live across the rest of Great Britain later in 2013 and Northern Ireland in 2014.
See our Universal Credit information sheet.
June 2013
Personal Independence Payment
Change: All new working age claimants will have to claim Personal Independence Paymentinstead of Disability Living Allowance.
October 2013
Appeals process changes
The Department for Work and Pensions (DWP) is revising its appeals process for the benefits it administers, and child maintenance cases. The aim is to make sure more appeals against DWP decisions are resolved without being referred to
Her Majesty’s Courts and Tribunals Service (HMCTS).
The revised approach will
focus on:
- Preventing disputes
- Reducing the escalation of disputes
- Resolving disputes
- Learning from disputes.
The following changes will help to deliver these objectives:
Mandatory reconsideration
When a person receives a decision from DWP that they dispute, they will have to request that the Department conducts a ‘mandatory reconsideration’ before being allowed to lodge an appeal. This reform aims to resolve more disputes at an earlier stage and help ensure that people receive their correct entitlement earlier.
Direct lodgement
People who want to appeal after mandatory reconsideration will need to send their appeal directly to HMCTS. This change will align the appeals process for the Social Security and child maintenance jurisdiction with the other major tribunal jurisdictions within HMCTS. It will allow DWP to focus on its key role as a party to appeals.
Time limits
The introduction of the changes is an opportunity to introduce time-limiting on appeals responses. DWP is currently in discussions with the Tribunal Procedure Committee as to what these limits
might be.
Mandatory reconsideration and direct lodgement will be introduced in April 2013 for Universal Credit and Personal Independence Payment and October 2013 for all other DWP administered benefits and child maintenance cases.
Universal Credit
The current complex system of working-age benefits and Tax Credits is to be replaced by a new benefit called Universal Credit. The process of moving existing claimants on to Universal Credit will be gradual and should be completed by October 2017.
See our the Turn2us Universal Credit information sheet
Personal Independence Payment
From October 2013 some people receiving DLA will have to claim PIP instead. This will apply to you if:
- your existing award of DLA expires: or
- you become 16 years old: or
- your care needs or mobility needs change and you apply for a reassessment of the level of your DLA.
See our Personal Independence Payment information sheet.
Benefits changes 2014
March 2014
Incapacity benefits
The transfer of existing claimants on incapacity benefits (i.e. Incapacity Benefit, Severe Disablement Allowance and Income Support on disability grounds) to Employment and Support Allowance should be completed by the end of March 2014.
See the Turn2us Incapacity Benefit changes information sheet
April 2014
Universal Credit to be introduced in Northern Ireland.
The Northern Ireland Social Security Minister, Nelson McCausland, and the Minister for Welfare Reform, Lord Freud, have agreed changes about the way Universal Credit is paid in Northern Ireland to protect the most vulnerable and reflect Northern Ireland's unique circumstances.
The changes agreed are:
- Housing cost element of Universal Credit paid direct to landlords rather than customer
- Payment of Universal Credit may be split between two people in the household
- Payment of Universal Credit may be payable twice each month.
See the Turn2us news item on Northern Ireland and Universal Credit (23 October 2012)
See the Turn2us Universal Credit information sheet
Benefit changes 2015
2015 - date to be confirmed
Independent Living Fund
The Independent Living Fund - which provides money to help people with disabilities live an independent life in the community - is to close in 2015. .
Funding will be incorporated into local social care arrangements - through local councils in England and the devolved governments in Scotland in Wales. People who already have ILF care packages will have transfer to new local arrangements.
See the Independent Living Fund website for more information
October 2015
Personal Independence Payment
Change: Claimants of working age receiving Disability Living Allowance (DLA) will be invited to claim Personal Independence Payment instead.
See the Turn2us Personal Independence Payment information sheet
Benefit changes 2016
April 2016
State Pension Age
Proposed Change: Plans to bring women’s pension age in line with men’s will be sped up from April 2016 so that women’s pension age reaches 65 in November 2018.
Pension age for men and women will then increase to 66 from December 2018 to April 2020.
Update: The Pensions Bill has been amended after concerns that some women would have to wait for up to an extra two years to collect their pensions. The proposed rise in the state pension age to 66 by 2020 is to be delayed by six months, from April 2020 to October 2020 capping the increase at a maximum of 18 months.
See the Turn2us State Pension age changes information sheet.
Taken from: http://www.turn2us.org.uk/information__resources/benefits/news_and_changes/benefit_changes.aspx
