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 Pension Credit
- Changes to bereavement benefits
- Personal Independence Payment is replacing Disability Living Allowance
- 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 is being rolled out nationally and will replace a number of benefits for people of working age - i.e. people younger than the minimum age to claim Pension Credit (which is 64 and six months in April 2018 and will be 65 by November 2018).
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 Pension Credit age, you may not be affected unless you are part of a couple and one of you is below this age.
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.
- 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 for bereavements which have taken place since 6 April 2017.
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 is replacing Disability Living Allowance
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.
On 5 April 2018, SMI benefit will end and from 6 April, SMI loans will be introduced. This means that from 6 April 2018, 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 Pension Credit 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 to £23,000 in London and £20,000 elsewhere.
You may be affected if you’re under Pension Credit age, or if you’re over 63 and live with a spouse or partner below that age and:
- you or your partner claims Income Support, income-based Jobseeker's Allowance or income-related Employment and Support Allowance (ESA)
- you or your partner claims 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
Initially the cap reduces Housing Benefit payments, but in future any deduction will be through Universal Credit.
What you should do next
What benefits can you claim?
Do you know what benefits you are entitled to? Find out exactly what you are owed, quickly and easily, using Age UK's benefits calculator.
For more information call Age UK on 0800 055 6112