Tuesday, 26 February 2013

Benefits Changes 2013 - A Brief Summary

Neil Gerrard, former MP for Walthamstow, has produced the following notes about the Benefit Changes that begin to take effect starting in April:-

Housing Benefit: As from April 2013 Housing Benefit will be cut for people in social housing who have more bedrooms than their family needs according to the rules. Pensioner households are not affected. Several hundred families in Waltham Forest will be affected. For those with 1 extra room the cut will be  14%, and for 2 extra rooms 25%.

Benefits Cap: Starting in 4 London Boroughs (not Waltham Forest) in April, and elsewhere later in the year, by the end of September. Total benefits received by a household will be capped at £500 per week for a couple or lone parent and £350 per week for a single person.

(Some benefits exempt you, eg people in receipt of Disability Living Allowance or receiving Working Tax Credit aren't affected by the cap).

The cap will be imposed by the Council when they work out someone's entitlement to Housing Benefit.

Council Tax: The Government has passed the responsibility to Councils as from April. Currently there is a national scheme, which the Council implements, and is then reimbursed by the Government. From April Councils have to implement their own schemes, BUT they will have 10% less money, and they will have to have a scheme which does not make pensioners worse off, and does not make people better off on benefits than in work.

Disability Living Allowance: As from April 2013 will be replaced by Personal Independence Payment (PIP). All new claimants will go on to PIP and then existing DLA claimants will be moved across over a period of time, probably up to 3 years. There is no guarantee that someone currently getting DLA will qualify for PIP, and the Government expects a 20% reduction in awards.

Employment Support Allowance: Rules have been tightened recently which may mean some people will lose ESA.

Universal Credit: Will begin in October 2013. Universal Credit replaces current means tested benefits, so income based Jobseekers Allowance (JSA), income based Employment Support Allowance (ESA), Income Support, Tax Credits, and Housing Benefit, will all disappear and be replaced by this single benefit. The Housing Benefit cuts and the Benefits Cap will both carry over into Universal Credit.

In October it will be new claimants who go onto Universal Credit, followed by people on existing benefits who have major changes in circumstances, and then over a period of up to 3 years all other existing claimants will move across to Universal Credit.

There will be both winners and losers from this. There are major concerns about whether the systems will work, as all claims will have to be made on line, and payments will generally be monthly in arrears.

Some changes are being made now to JSA and ESA to align the rules with those for Universal Credit, which will mean a tougher sanctions regime.

Social Fund: Currently the Social Fund is operated by DWP. It provides crisis loans to people, and budgeting loans and community care grants. As from April much of this will pass to local Councils to run their own schemes.

Legal Aid: As from April there will be major changes in legal aid, which will remove all benefits cases, and the majority of debt and housing cases from eligibility for legal aid. This will have a major impact on people trying to get help with appeals to tribunals on benefits, and people needing help to get debt relief orders to write off debt.

On top of all this there will be the 1% limit on annual benefit increases which recently went through Parliament, and the cuts which are already in place from last year affecting private renting.

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