Some major changes have been made to the benefits system, and others are being introduced. These particularly affect people of working age, but some of the changes will affect older people too.
Here are some of the main changes:
Universal Credit will replace the following certain benefits for people of working age:
- Income Support
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Working Tax Credit
- Child Tax Credit
- Housing Benefit.
Universal Credit has started to be introduced for new claimants in some areas of the country. It will gradually be rolled out nationally and exisiting claimants will be transferred – it's expected most people will move to Universal Credit in 2016 and 2017. At some point in the future people in later life may be affected. For example if:
- You have a partner and one of you is under Pension Credit age - Currently couples can receive Pension Credit as long as one has reached Pension Credit age, but the rules are expected to change, so if one of you is younger you will have to claim Universal Credit instead. Those already claiming Pension Credit when the change comes in won't be affected (unless or until there is a break in your Pension Credit claim for some reason).
- You have dependent children living with you - Child Tax Credit will be abolished, and financial help for children will be provided on Universal Credit or Pension Credit.
- You're working in a low-paid job and over Pension Credit age. You'll no longer be able to claim Working Tax Credit.
By ‘Pension Credit age’, we mean the age at which you are eligible to claim it. You don’t actually have to be claiming it. This age is linked to women’s State Pension age which is gradually increasing.
- Because Housing Benefit is being abolished, Pension Credit will change. It'll include a new housing credit to help towards rent. It's expected that this will come in for new claimants from 2017 onwards. If you're already receiving Housing Benefit, you'll be transferred to the new Pension Credit system after this time.
- Because Child Tax Credit will be abolished, Pension Credit will include additional amounts if you have dependent children.
- There may be a new savings limit for Pension Credit. There is currently no savings limit, but if one is introduced it will be over £16,000.
Personal Independence Payment
Personal Independence Payment (PIP) has been introduced and Disability Living Allowance (DLA) will be phased out. PIP replaces DLA for people who are disabled and make a claim before the age of 65, who are disabled or have long-term health conditions. When someone receiving PIP reaches 65, they will be able to keep claiming it as long as they still meet the criteria for it.
PIP has 2 components:
Each component has 2 rates of payment, depending on the level of the claimant's ability to carry out daily living and mobility activities.
If you currently get DLA you may be reassessed for PIP. If you were under 65 on 8 April 2013, you'll be reassessed for PIP at some point by October 2017. The government has not announced any plans to reassess people who were over 65 on 8 April 2013 and getting DLA.
Council Tax Support
Council Tax Benefit has been abolished and replaced with local support schemes. The Government has set out the rules for pensioners which are in line with the previous Council Tax Benefit scheme but people of working age often get less support than under the old system.
Help with social housing rent payments
If you’re under Pension Credit age and rent a property in the social housing sector, from April 2013 the help with rent from Housing Benefit is restricted if you're considered to have more bedrooms than required. The media has dubbed this change the 'bedroom tax'.
Provisions were already in place for private tenants.
As explained above, under Universal Credit you'll be treated as ‘working age’ if you're a pensioner but have a younger partner - so some pensioners may be affected by this in the future.
There is now a limit on the total amount of benefits you can receive if you're of working age. It's linked to the average earnings of a working household. It's £350 a week for single adults and £500 a week for couples and lone parents.
The cap mainly affects people who are under Pension Credit age, but it may also affect you if you're over that age in certain circumstances:
- if you or your partner claims Income Support, income-based Jobseeker's Allowance or income-related Employment and Support Allowance
- If you or your partner claims Universal Credit.
The cap won't apply if you receive Disability Living Allowance, Personal Independence Payment, Attendance Allowance, Working Tax Credit, ESA support component or war widow’s pension. Initially the cap is being administered through reductions in Housing Benefit, but in future any deduction will be made through Universal Credit.