Changes to the benefit system
You may have heard that some welfare benefits have been changing in the last few years. Find out on this page how these changes might affect you.
- The introduction of Universal Credit
- Changes to couples benefits
- Future changes to Pension Credit
- Changes to bereavement benefits
- Personal Independence Payment (PIP) is replacing Disability Living Allowance (DLA)
- Changes to Support for Mortgage Interest
- Housing benefit reductions and the ‘bedroom tax’
- How the benefit cap could affect you
- What you should do next
The introduction of Universal Credit
Universal Credit has been rolled out nationally and replaces new claims for a number of benefits for people of working age - i.e. people younger than State Pension age (you can check what your State Pension age is on the Government website).
You’ll eventually be transferred to Universal Credit if you already claim any of the following:
- Income Support
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance (ESA)
- Working Tax Credit
- Child Tax Credit
- Housing Benefit
If you’ve reached State Pension age, you may not be affected unless you are part of a couple and one of you is below this age. Since 15 May 2019 both members of a couple must have reached State Pension age to claim Pension Credit. If this is not the case, they will have to make a new claim for Universal Credit.
Changes to couples benefits
The way benefits are given to couples where there's an age gap between them has changed. As mentioned above, mixed age couples (where one partner is over the State Pension age (SPA) and the other partner has not yet reached SPA) are no longer able to choose whether they claim Universal Credit or Pension Credit and pension age Housing Benefit. Instead, they can only claim Universal Credit until they both reach SPA.
If you were already claiming these benefits on 15 May 2019, you should not be affected. However, if your circumstances change or you take a break from claiming, it might mean you have to claim Universal Credit instead.
Some of the changes that might affect your claim include:
- a change of address to a different local authority area
- going abroad for more than 4 weeks
- a change in the amount of capital you have
- stopping claiming a benefit that helps you qualify for Pension Credit or Housing Benefit
- separating from your partner and then getting back together.
Future changes to Pension Credit
Here are some of the things that may change with Pension Credit, although it’s not clear when these changes will take place.
- As Housing Benefit is being abolished, Pension Credit will include a new housing credit to help towards rent. This may not happen until 2023 at the earliest, however.
- As Child Tax Credit is being abolished, Pension Credit will include additional amounts for dependent children.
- There may be a new savings limit for Pension Credit. There is currently no savings limit.
Changes to bereavement benefits
Bereavement Support Payment has replaced the old system of bereavement benefits.
You may be entitled to Bereavement Support Payment if:
- Your husband, wife or civil partner died on or after 6 April 2017
- The deceased person paid National Insurance contributions or died because of an accident at work or a disease caused by work
- When they died the surviving partner was under State Pension age.
Personal Independence Payment (PIP) is replacing Disability Living Allowance (DLA)
Personal Independence Payment (PIP) has replaced Disability Living Allowance (DLA) for new claimants.
Here’s how you could be affected if you currently get DLA:
- If you were under 65 on 8 April 2013, you'll be reassessed for PIP at some point in the future
- If you were over 65 on 8 April 2013, you'll continue to receive it for as long as you're eligible.
Changes to Support for Mortgage Interest
Support for Mortgage Interest (SMI) pays towards the interest on a mortgage or other eligible home improvement loans.
Since 6 April 2019, SMI loans were introduced. This means that if you claim SMI, you'll need to make sure that you pay interest on your mortgage or home improvement loans, either yourself or using the loan. The loan is voluntary and you have the choice to accept it or not.
Housing benefit reductions and the ‘bedroom tax’
Housing Benefit is reduced if you're considered to have more bedrooms than you need in your home. This has been called the 'bedroom tax'.
This could affect you if the following apply to you:
- you’re under State Pension age and,
- you rent a property from your local authority or a housing association and,
- you have more bedrooms than you need.
- you’re a pensioner and have a younger partner, and claim Universal Credit.
How the benefit cap could affect you
There is a cap on the amount of benefits you can claim if you’re not working. The cap is £20,000 (or £23,000 in London). You may be affected if:
- you’re under State Pension age; or
- if you’re over this age, but live with a spouse or partner who is below State Pension age and you or your partner claims Income Support; income-based Jobseeker's Allowance; income-related Employment and Support Allowance (ESA), or Universal Credit.
The cap won't apply if you receive any of the following:
- Disability Living Allowance
- Personal Independence Payment
- Attendance Allowance
- Working Tax Credit
- ESA support component
- War widow’s pension
What you should do next
What extra money are you entitled to?
For more information call Age Cymru Advice on 0300 303 44 98