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Benefits are changing

Introduction

The Government’s Welfare Reform Programme is the biggest change to the welfare system in at least 60 years. As well as reducing how much is spent on benefits, the Government say that the main aim of the reforms is to reduce reliance on welfare benefits and make work pay.

The changes mainly affect people of working age. Most of the changes do not apply to people who have reached the qualifying age for State Pension Credit.

Most of the ‘welfare reform’ changes have already been introduced such as the reduction in Local Housing Allowance rates; the limit on Housing Benefit for single people under 35 to shared accommodation rates; the Benefits Cap; and the Social Rented Sector Size Criteria (otherwise known as the under-occupation deduction).

As part of the Welfare Reform changes, the former national Council Tax Benefit Scheme was localised from 1 April 2013. For more information about these changes see our Local Council Tax Support page. 

There are also changes happening to other benefits such as Disability Living Allowance. You can find more information about all the changes on the Department for Work and Pensions website at www.dwp.gov.uk/policy/welfare-reform.

The information on this page gives some general information about the main changes to Housing Benefit and how they might affect you. For details of advice and support available to people affected by the changes please see the factsheet attached to this page.

The Benefit Cap

From April 2013, a ‘cap’ was introduced on the benefits received by working age households who do not work. The benefit cap was introduced so that people who are not working do not receive more income than the average earnings of people or households in work.

How the cap works

The Government add up how much money you get from a range of benefits including: Housing Benefit, Jobseeker’s Allowance, Employment and Support Allowance, Child Benefit, Child Tax Credit and Carer’s Allowance. If the total comes to more than the maximum amount allowed, your Housing Benefit payments will be reduced. However, if you live in certain supported housing, the amount of Housing Benefit you receive does not count towards the maximum amount allowed.

The maximum amount of benefit you can receive under the Benefit Cap rules is:

  • £500 per week for single parents 

  • £500 per week for couples with or without children

  • £350 per week for single people without children.

The cap will not apply to you if:

  • You or your partner get Pension Credit or Working Tax Credit 

  • A member of your household is claiming Disability Living Allowance, Attendance Allowance, War Widow’s/Widower’s Pension, Industrial Injuries Benefit or the support element of Employment and Support Allowance.

There is also be a grace period whereby the cap will not be applied for 39 weeks to those who have been continuously in work for the previous 12 months. 

Example of the Benefit Cap

Mr and Mrs Green live with their 5 children, aged 3, 7, 9, 11 and 14 in a council property. They receive full Housing Benefit of £60 per week credited direct to their rent account. (Their benefit is based on receiving Employment and Support Allowance or Job Seekers Allowance and Child Benefit, Child Tax Credit).

Mr Green has not been able to secure a job. He has received support from the Department of Work and Pensions (DWP) but has been unsuccessful.

The DWP tell us that there is a potential benefit cap amount of £110 per week that they are receiving over the £500 per week from various sources of benefit. 

The DWP ask us to apply the cap to their Housing Benefit and ask us to recover as much as possible from their Housing Benefit, leaving them with a minimum of 50p per week. Because of this they may be entitled to apply for a Discretionary Housing Payment.
 
So the cap we apply in this case would be £59.50 (their weekly Housing Benefit of £60 less 50p that we must continue to pay)

Under the current rules, they would not lose the other £50.50 per week (potential cap amount £110 less actual cap applied £59.50) from their other benefits.

This could change when they move onto Universal Credit (see Universal Credit information further down).

In this example they would still receive £550.50 per week in benefits from the Department of Work and Pensions and 50p per week in Housing Benefit so that the council could consider a Discretionary Housing payment.

Discretionary Housing Payments are a fixed cash limited pot and are meant as a short term measure only. The intention is to target those who are most vulnerable and those fostering children.

Mr Green then applies for a Discretionary Housing Payment because they say they are unable to pay their rent.

The local authority has a choice of:

  • Encouraging Mr Green to go to work.

  • Encouraging Mr Green to pay his rent from the rest of the benefits he receives.

  • Awarding a Discretionary Housing Payment of up to £59.50 per week.

Please also see our Benefits Cap Frequently Asked Questions attached to this page.

Social Rented Sector Size Criteria (Under-occupation deduction)

Housing Benefit for most people living in private rented accommodation has been limited to the number of bedrooms they need for many years. These rules now apply to working age people living in social housing, that is homes let by registered social landlords such as councils and housing associations.

Since April 2013, if you rent your home from the council (through St Leger Homes of Doncaster) or a housing association and you have one or more ‘spare’ bedrooms, you are likely to get less Housing Benefit. This does not apply if you or your partner have reached the qualifying age for State Pension Credit.

What is a ‘spare’ bedroom?

If you have more bedrooms than the Government says you need, you will lose part of your Housing Benefit.

For example, if just you and your partner live in a two bedroom house, you will be treated as only needing one bedroom and having one 'spare' bedroom.

The rules allow a bedroom for each of the following people in your household:

  • Each adult couple

  • Any other person aged 16 or over

  • Children who can't share because of a disability or medical condition

  • Two children of the same sex under the age of 16

  • Two children under the age of 10 regardless of their sex

  • Any other child

  • A carer (who does not normally live with you) if you or your partner need overnight care.

  • An approved foster carer

    • who is between placements, but only for up to 52 weeks from the end of the last placement, or

    • A newly approved foster carer for up to 52 weeks from the date of approval if no child is placed with them during that time.

  • Adult children who are a student or serving in the Armed Forces (even when deployed on operations) as long as they intend to return home will be treated as occupying a bedroom.

In all other cased, it does not matter how the 'spare' room is used, the rules will apply even if:

  • You and your partner need to sleep apart because of a medical condition

  • Your children’s main home is elsewhere but you have a spare room for when they stay with you.

St Leger Homes of Doncaster have a calculator on their website that you can use to work out how many bedrooms you will be treated as needing. Visit www.SLHDMoneywise.co.uk and click on the ‘Room Calculator’ page on the left.

How much Housing Benefit will you lose if you have a ‘spare’ bedroom?

If you have one ‘spare’ bedroom, you will have to pay at least 14% of the rent you pay each week. If you have two or more ‘spare’ bedrooms, you will have to pay at least 25% of the rent you pay. You will have to pay your landlord the difference between your Housing Benefit and your rent. Here are some examples to show you how the reductions work:

Mr and Mrs Smith live in a two-bedroom flat where the rent charge is £70 per week. Under the rules, they will be treated as having one spare bedroom. This means they will have to pay at least 14% of their rent (14% of £70 = £9.80). Their Housing Benefit will be worked out on their rent charge less £9.80 which means the most Housing Benefit they can receive is £60.20 per week.

Mr and Mrs Brown live with their two daughters, aged 9 and 13, in a four bedroom house where the rent charge is £110 per week. Under the rules, their children are expected to share a bedroom and so they are treated as having two spare bedrooms. This means they will have to pay at least 25% of their rent (25% of £110 = £27.50). Their Housing Benefit will be worked out on their rent charge less £27.50 which measn the most they can receive is £82.50 per week.

Please also see our Social Sector Size Criteria factsheet attached to this page. 

Universal Credit

The Government plans to bring together a number of current means tested working age benefits and tax credits into one single benefit to be known as Universal Credit. These benefits include:

  • Child Tax Credit

  • Housing Benefit

  • Income based Employment and Support Allowance

  • Income based Jobseeker’s Allowance

  • Income Support

  • Working Tax Credit

It is intended that most people will make a claim for Universal Credit and report changes in their circumstances online.

Universal Credit will have a phased transition which will mean that some claimants continue to receive some of their existing benefits until at least 2017. The Government has proposed the following timetable for claims moving to Universal Credit:

  • April 2013: Universal Credit was introduced for certain single people in a small number of areas of England (known as 'Universal Credit areas'), Doncaster is not one of these areas.

  • Summer 2014: Universal Credit will be introduced for couples and later in Autumn 2014 for families, but only those living in the Universal Credit areas.

  • Between Autumn 2014 and 2015: Universal Credit will be rolled out to more areas of the country, probably in the North West of England.

  • During 2016: Current plans will see new claims to existing benefits closed during 2016. This will mean that from 2016 all new benefit claims across the country will claim Universal Credit instead of benefits such as Jobseeker's Allowance or Housing Benefit.

  • During 2016/17: Most of the existing benefit claims will be moved over to Universal Credit.

Decisions on the later stages of the Universal Credit rollout will also be informed by the completion of the new IT system and these decisions will determine the final details for how people move to the new benefit.

People who already claim current benefits such as Child Tax Credit and Housing Benefit in October 2013 will not start to transfer to Universal Credit until September 2014. People claiming Jobseeker's Allowance will be the first to transfer and then the other benefits and tax credits. Everyone will have transferred to Universal Credit by the end of 2017.

Under the current plans people living in certain supported accomodation such as Foyers and Homeless Hostels will not transfer to Universal Credit. These people will initially continue to claim Housing Benefit, but the Government is still considering how these people will be supported with their housing costs in the longer term.

More information about Universal Credit is available www.dwp.gov.uk/policy/welfare-reform/universal-credit. Please also see the Universal Credit Frequently Asked Questions document attached to this page.

Universal Credit on the Red Button

Information about Universal Credit and finding work is now available by hitting the red button on the TV remote control.

Sky and Virgin customers who have interactive TV can simply scroll through the menu to the relevant page to view a raft of information, including checking their eligibility for Universal Credit and learning how they can make a claim.

And for those who use their smartphone to connect to the web, even though they might not have an internet connection in their home, can access the information via the new app, My Council.

The information can also be accessed via Facebook.

As well as information on Universal Credit, people can aslo access Universal Job Match and The Money Advice Service through Looking Local. 

Housing Support for Pensioners

As the Government plan to abolish Housing Benefit in the future, Housing Benefit for pension-age customers will eventually be paid as a ‘Housing Credit’ as part of their Pension Credit. This ‘Housing Credit’ will be worked out under similar rules to the current Housing Benefit rules so that pensioners should continue to receive the same level of support.

The Government plans to move all pensioners currently receiving Housing Benefit onto the new Housing Credit. However these plans are currenlty paused while the Government introduce Single tier pensions.

Advice and Support for people affected by the changes

Please see the factsheet attached to this page for details of advice and support available to people affected by the changes

Page last updated 23/04/2014 14:38:05
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