This year, several changes have been made to the welfare system. See below for a breakdown of each one.
Under-Occupation Charge, also known as ‘Bedroom Tax’ is a scheme introduced in April 2013 which meant that Housing Benefits were reduced for people who had rooms that were considered to be “spare rooms” in their house.
Initially, this included spare bedrooms for people with disabilities, health problems or care requirements. Changes were made from 1st April 2017 to allow an additional bedroom for disabled children, adults requiring overnight care and couples who need to stay in separate bedrooms for health reasons.
Employment and Support Allowance
The following changes have been made to Employment and Support Allowance (ESA) as a result of the new Personal Support Package.
People who started claiming ESA from 3rd April 2017 and who fall into the work-related activity group (WRAG) will no longer receive the work-related activity part.
The hardship rates for these claimants have also changed. If they or a member of their family is in hardship, they will receive 80% of the basic ESA rate if they are pregnant or have an illness which incurs extra living costs.
The work rules for ESA WRAG claimants have also been altered. Previously, there was a time limit of 52 weeks for permitted work. As of 3rd April 2017, this was removed. This means that claimants can work up to 16 hours a week and earn up to £120 while still receiving their ESA payments.
Disability Living Allowance
Disability Living Allowance is given to people who need financial help for care or mobility.
There are two parts to Disability Living Allowance. The first is the care component, which has three different rates. The lowest rate is £22 per week, which is given to those who need help for just some of the day, or with preparing meals. The middle rate is £55.65, which is for people who need frequent help or constant supervision. It’s also given to those who require care while on dialysis. The highest rate is £83.10, and this is given to people who are terminally ill, as well as people who need help or supervision throughout the day and night.
The second part of DLA is the mobility component, which has only two rates. The lower rate is £22 per week, and you can claim this if you need help or guidance while outdoors. If you have more severe mobility issues, such as a difficulty walking, you are eligible to claim the higher rate of £58 per week.
Personal Independence Payment
Personal Independence Payment (PIP) replaced Disability Living Allowance for people aged 16-64.
Personal Independence Payment consists of two parts; a daily living part and a mobility part. You may receive just one part or you may be eligible for both. This largely depends on the degree to which your condition impacts your life.
The daily living part is either £55.655 or £83.10 per week. The higher rate is given to those with terminal illnesses who are not expected to live more than 6 months. The mobility part is either £22 or £58 per week, and the rate you receive will depend upon your condition and needs.
If you have a non-dependant friend or family member living with you, a deduction will be made from your housing benefit. This does not include partners, lodgers, temporary guests, students or any person that is disabled. The amount your housing benefit will be reduced by depends on the gross income of the person living with you.
As of 2017, if a non-dependant is over 25 and receives Income Support or Job Seeker’s Allowance, a deduction of £14.80 will be made. If a non-dependant is in work and has a gross income of £136-£199.99, that deduction goes up to £34. The amount deducted increases with their income, and the highest rate is £95 for a gross income of £430 or more.
Personal Support Package
In March 2017, plans were announced to launch a new Personal Support Package, which is designed to provide employment support for those who are currently unable to work due to an illness or disability, but may be able to work in the future.
The PSP includes support by Disability Employment Advisers and Work Plus Coaches in Job Centres, as well as changes to Employment and Support Allowance.
Work Requirement for Parents Claiming Universal Credit
Universal Credit allows parents who work to claim up to 85% of their childcare costs. As of 3rd April 2017, claimants of Universal Credit are expected to go back to work when their youngest child turns 3.
Free childcare entitlement for working parents of children aged 3 and 4 is currently 15 hours a week. From September 2017, it will be doubled to 30 hours a week.
Instead of childcare vouchers, which are supported by employers, the government will now contribute up to £2,000 of childcare costs per child each year. Parents must earn less than £150,000 per year to be eligible.
Child Tax Credits
As of 6th April 2017, parents can only claim Universal Credit if they have 2 children or fewer.
For the tax year 2017/18, the basic amount, which is also known as the ‘Family Element’ is up to £545 per year. The ‘Child Element’, which applies to each child, is up to £2,780 per year. For disabled children an extra amount of up to £3,175 is given. If a child is severely disabled, there is a yearly amount of £1,290 on top of that.
From April 2017, the Housing Costs element for unemployed people aged under 22 was removed.
Bereavement Support Payment
On April 6th 2017, a Bereavement Support Payment was introduced to replace Bereavement Allowance and Widowed Parent’s Allowance.
In order to be eligible for Bereavement Support Payment, your partner needs to have paid National Insurance contributions for a minimum of 25 weeks. Partners of those who have died as a result of work-related accident or illness are also eligible.
You can claim for Bereavement Support Payment up to 21 months after the death of a partner, but will only receive the full amount if a claim is made within the first three months.
Bereavement Support Payment involves an initial large sum followed by smaller monthly payments for up to 18 months. For parents of children aged under 20 in full-time education, this is £3,500 with monthly payments of £350. For those without children in full-time education, it’s £2,500 followed by monthly payments of £100.
The family element of Tax Credits was removed as of April 2017. First Child Element, which is the equivalent payment for Universal Credit, was also removed.
The Benefit Cap is a limit on the total amount that most people can claim. The earnings threshold for Benefit Cap exemption changed as of 1st April 2017. It used to be a fixed amount of £430, but is now the amount that a claimant would earn by working 16 hours per week at the national minimum wage, which is currently £520.