Welfare reform

An explanation of changes recently made or being made in the near future, to council tax support or housing benefit.

Further reading and useful links

Housing benefit changes

Housing benefit for rent is being gradually replaced by:

  • State Pension Credit (SPC) for pension age claimants though there are no firm plans currently in place to introduce this.
  • Universal Credit (UC) for working age claimants. Universal Credit can help meet basic living needs (such as food and heating) and rent for claimants both in work and out of work, child care costs for people in work, and mortgage interest for out of work home owners, but not council tax.

Everyone who would previously have made a new claim to housing benefits, tax credits or a DWP income related benefit, will have to claim Universal Credit instead, no matter what the circumstances. Pensioners who need help with housing costs still need to claim housing benefit. 

For more detailed information see www.gov.uk/apply-universal-credit

From 2018 the DWP will start to move the remaining working age housing benefit awards over to Universal Credit. This will continue until at least 2020.

Universal Credit

Your benefits are paid directly into your bank account as standard, even if you rent from the council. Universal Credit housing costs are only paid to the landlord in specific circumstances such as two months rent arrears or if the claimant struggles to manage their finances.

This has meant a huge change in the way that tenants in receipt of housing benefit have to manage their finances, including around 60 per cent of all council tenants in H&F.

This is because it places responsibility to pay the rent firmly on the shoulders of tenants and means that the tenant will need to make sure that they budget appropriately and have enough money at the end of the month to pay the rent.

Universal Credit replaces:

  • income-based job seeker's allowance
  • income-related employment and support allowance
  • income support
  • child tax credits
  • working tax credits
  • housing benefit

The differences between Universal Credit and the current system

The main differences between Universal Credit and the current welfare system are:

  • Universal Credit will be available to people who are in work and on a low income, as well as to those who are out of work
  • most people will claim online and manage their case through an online account
  • Universal Credit will be responsive – as people on low incomes move in and out of work, they’ll get ongoing support, giving people more incentive to work for any period of time that is available
  • most claimants on low incomes will still be paid universal credit when they first start a new job or increase their part-time hours
  • claimants will receive just one monthly payment, paid into a bank account in the same way as a monthly salary
  • support with housing costs will go direct to the claimant as part of their monthly payment

Please note that universal credit cannot help with your council tax. If you need council tax support you will still have to apply direct to us.

Under occupancy – spare rooms

If you have more bedrooms than you are allowed under rules in place since April 2013, your housing benefit will be cut.

To discuss how you might be affected by this change, contact the Housing Benefit team on 020 8753 6681.

Who is affected?

You may be affected if you:

  • rent your home from the council, a registered housing association or other registered social landlords
  • are of working age (if you are of state pension age you are not affected by this change)
  • have more bedrooms than your household needs, under the new size criteria

New size criteria - how many bedrooms are you allowed?

The rules say you can have:

  • one bedroom for each couple or person aged 16 or over living in the home
  • a child aged under 16 is expected to share with one other child of the same sex
  • a child aged under 10 is expected to share with one other child aged under 10, regardless of their sex and the size of the bedroom.

An additional bedroom can be allowed for each of:

  • a foster child
  • an overnight carer for the claimant or their partner
  • a disabled child who needs their own bedroom
  • the supreme court has recently ruled that disabled couples who cannot share because of disability and disabled children with overnight carers - but legislation has not yet been amended to reflect this.

If you have any ‘spare’ bedrooms that are not being used, or that are being used by people expected to share, your housing benefit will be cut.

If you are unsure whether you will be affected please call us on 020 8753 6681.

How much will your housing benefit be cut by?

  • If you have one ‘spare’ bedroom your housing benefit will be cut by 14% of your full rent.
  • If you have two or more ‘spare’ bedrooms, your housing benefit will be cut by 25% of your full rent.

What can you do?

If you will be affected by this change, you have a number of options:

Move into a smaller home

If you move into a smaller home you can avoid losing some of your housing benefits. Your rent and bills might also be lower. You will also have a smaller space to manage with the potential to live in a new area, closer to family, friends or schools.

If you are interested in downsizing contact the Housing Occupancy Team on 020 8753 4390.

Stay in your current home

If you stay in your current home you will need to pay extra rent to cover the cut in housing benefit. It’s important to consider how you will do this, to avoid getting into arrears with your rent. To pay the shortfall in housing benefit you can:

  • increase your income

If you are not working but would like some help to find employment or prepare for work, contact your local job centre or call the national job-seeker’s line on 0345 604 3719.

  • ask family members to contribute, or pay more yourself
  • take in a boarder or lodger

Benefit cap

What is the benefit cap?

It is a limit on the total amount of certain benefits and applies to people aged 16 up until the female state pension age.

  • The benefit cap only affects you if you're getting housing benefit or universal credit. If the cap affects you, your housing benefit or universal credit is reduced.

How much is the benefit cap?

Since 7th November 2016 the cap is:

  • £442.31 a week for couples (with or without children living with them)
  • £442.31 a week for single parents whose children live with them
  • £296.35 a week for single adults who don’t have children, or whose children don’t live with them
  •  it reduces out of London to £384.62 for families/couples and lone parents and for single adults £257.69

Until 7th November 2016 the level of the cap was:

  • £500 a week for couples (with or without children living with them)
  • £500 a week for single parents whose children live with them
  • £350 a week for single adults who don’t have children, or whose children don’t live with them

.Who is affected?

To find out if you are likely to be affected please follow the steps below.

Step 1 - From the list below note down any benefits that you receive:

  • bereavement allowance
  • child benefit
  • child tax credit
  • employment & support allowance (except when in the support group)
  • guardian's allowance
  • housing benefit
  • incapacity benefit
  • income support
  • industrial injuries disablement benefit
  • job seeker's allowance (contribution based and income based)
  • maternity allowance
  • reduced earnings allowance
  • severe disablement allowance
  • widowed parent's allowance
  • widow's benefit.

Any other type of benefit or income that are not included above will not be taken into account when calculating the cap.

Step 2 - Make a note of how much you receive from each benefit, we suggest you do this on a weekly basis.

Example - a couple not in work with four children

child benefit - £61.80
child tax credit - £216.86
JSA (couple) - £114.85
housing benefit - £200.00
Total benefit income = £593.51 a week

Step 3 - If the total weekly amount exceeds £442.31 (in London) for a couple (as in the case above) or £96.35 (in London) for a single person then you are likely to be affected by the benefit cap.

However, please also read the section 'Are any households exempt from the benefit cap?' see below.

How will the cap be applied?

The cap will be applied through your housing benefit payments. If we take the example above, the total weekly benefit exceeds the £442.31 limit so the housing benefit of £200 will be reduced to £151.20 reduced to £48.80 (£200 less £151.20) a week. The total benefit income being restricted to £442.31 a week.

What happens if you get less housing benefit than the excess amount?

If the excess benefit income amounts to £80 a week but only £50 a week is paid in housing benefit the housing benefit will be reduced to a sum of not less than £0.50 a week, even though the total benefit paid exceeds the cap limit. Under Universal Credit, housing costs and living costs are not separate, so the cap will be applied to the total Universal Credit amount.  

What if you do not get housing benefit?

There will be no change to the amount of benefit received and you will not be affected by the benefit cap.

Are any households exempt from the benefit cap?

You won’t be affected by the benefit cap if you, your partner or your dependant children qualifies for or gets any of the following benefits:

  • working tax credit
  • disability living allowance
  • personal independence payment
  • employment and support allowance (if in the support group)
  • attendance allowance
  • constant attendance allowance
  • war widow's pension
  • industrial injuries benefits (and equivalent payments as part of a war disablement pension or the Armed Forces Compensation Scheme)
  • from 7th November 2016, carer's allowance 

or if a person is unemployed through no fault of their own, after having been employed continuously for 12 months then the household will receive nine months protection from the cap.

You might still be affected by the cap if you have any grown-up children or non-dependants who live with you and qualify for one of the benefits above. This is because they don't count as part of your household for cap purposes.

What are my options if my benefit is capped?

The government is stressing the option of moving into work in order to avoid the cap but this will not be possible for some of those affected. Other options include:

  • investigating whether you are entitled to a benefit which exempts you from the cap
  • making up the shortfall in housing benefit using other income or savings
  • reducing expenditure on non-essentials
  • applying for a discretionary housing payment
  • moving to cheaper accommodation or to a cheaper area.

More information

We've teamed up with Job Centre Plus to set up a joint 'benefit cap hub' to deal with enquiries about the benefit cap. This is a partnership initiative set up in conjunction with the DWP and is an extension of the current 'One place' initiative at Hammersmith Job Centre.

We have created a joint team made up of debt and welfare specialists, job brokers, housing benefit advisers, and Job Centre Plus staff. Residents are able to access advice on their housing and employment options whilst ensuring that their benefit claim is up to date and paid correctly in one visit.

The initial personal assessment will ensure residents’ needs are identified at an early stage.

For enquiries about the benefit cap please contact:

  • H&F Link, 145-155 King Street, Hammersmith, W6 9XY
  • call 020 8210 8200 to make an appointment or
  • call the DWP help line on 0845 605 7064.

To carry out a calculation based on your current circumstances and find out if you will be affected you can use the benefit cap calculator on gov.uk

For more information please visit www.gov.uk

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