Welfare Rights Welfare Rights

Benefit Training Benefit Training

20132013

WELFARE REFORM?WELFARE REFORM?

MULTI MILLIONAIRES MAKING MULTI MILLIONAIRES MAKING

DECISIONS THAT MAKE THE DECISIONS THAT MAKE THE

POOR, POORERPOOR, POORER

WORKING TAX CREDIT (WTC)WORKING TAX CREDIT (WTC)

ANDAND

CHILD TAX CREDIT (CTC)CHILD TAX CREDIT (CTC)

CHANGESCHANGES

Recent main negative changes:Recent main negative changes:

Tax Credits:Tax Credits:

Most couples must now work 24 hours weekly with Most couples must now work 24 hours weekly with one working at least 16 hours to get WTC.one working at least 16 hours to get WTC.

Child care costs reduced to 70% from 80%Child care costs reduced to 70% from 80%

Excess income reduced at 41% rather than 39% Excess income reduced at 41% rather than 39%

Over 50’s no longer allowed to claim WTC when Over 50’s no longer allowed to claim WTC when working 16 hours after being on certain benefits for 6 working 16 hours after being on certain benefits for 6 monthsmonths

Tax Credits Continued:Tax Credits Continued:

The extra amount (£40 or £25 weekly) paid in WTC for one year for The extra amount (£40 or £25 weekly) paid in WTC for one year for the over 50’s who stop benefits to start working has been stoppedthe over 50’s who stop benefits to start working has been stopped

Backdating claims for WTC or CTC are now limited to 1 month Backdating claims for WTC or CTC are now limited to 1 month previously this was 3 monthspreviously this was 3 months

The limits on earnings and income have been reduced resulting in The limits on earnings and income have been reduced resulting in many people previously entitled no longer qualifying for CTC. many people previously entitled no longer qualifying for CTC. E.g 1 child upper limit is now £26,000, 2 children £32,000. E.g 1 child upper limit is now £26,000, 2 children £32,000.

You could still qualify from 6 April 2012 if your income is above these You could still qualify from 6 April 2012 if your income is above these amounts. For example, if you pay for registered or approved amounts. For example, if you pay for registered or approved childcare, are disabled, or have more than one or two children.childcare, are disabled, or have more than one or two children.

Previously all claimants with children and income under about Previously all claimants with children and income under about £50,000 would have had £10+ weekly paid.£50,000 would have had £10+ weekly paid.

Tax Credits Continued:Tax Credits Continued:

Baby element in CTC worth £11 weekly removed.Baby element in CTC worth £11 weekly removed.

On a positive anyone over 60 can now claim WTC On a positive anyone over 60 can now claim WTC if they work 16+ hours and their earnings / income if they work 16+ hours and their earnings / income is low enough?is low enough?

* INCAPACITY BENEFIT (IB)* INCAPACITY BENEFIT (IB)

* SEVERE DISABLEMENT * SEVERE DISABLEMENT ALLOWANCE (SDA)ALLOWANCE (SDA)

* INCOME SUPPORT (IS)* INCOME SUPPORT (IS)

BECOMES BECOMES

* EMPLOYMENT SUPPORT * EMPLOYMENT SUPPORT ALLOWANCE (ESA)ALLOWANCE (ESA)

Incapacity / Income Support / Sickness Benefits:Incapacity / Income Support / Sickness Benefits:

The 2 year linking rule that allowed people to try work for up to 2 The 2 year linking rule that allowed people to try work for up to 2 years knowing that they could get back their previous sickness years knowing that they could get back their previous sickness benefit has stoppedbenefit has stopped

Incapacity for Youths (IBY) and Employment Support for Youths Incapacity for Youths (IBY) and Employment Support for Youths (ESAY)(ESAY)

These benefits allowed a disabled child under 20 (Some under 25’s) These benefits allowed a disabled child under 20 (Some under 25’s) to qualify for the non-means tested contributory IBY or ESAY without to qualify for the non-means tested contributory IBY or ESAY without the need to have worked and paid the required national insurance the need to have worked and paid the required national insurance contributions over the previous two years.contributions over the previous two years.

Anyone already on IBY or Severe Disablement Allowance (SDA) who Anyone already on IBY or Severe Disablement Allowance (SDA) who is then transferred to ESAY could find it only remains payable for one is then transferred to ESAY could find it only remains payable for one year.year.

Everyone on these benefits will be moved at some stage to Everyone on these benefits will be moved at some stage to Employment Support Allowance (ESA) with most being Employment Support Allowance (ESA) with most being subject to the new stricter medical.subject to the new stricter medical.

Contribution Based ESA is taxableContribution Based ESA is taxable

* Contribution based ESA for most only lasts one year, * Contribution based ESA for most only lasts one year, when Incapacity Benefit and Severe Disablement when Incapacity Benefit and Severe Disablement Allowance previously claimed would have lasted foreverAllowance previously claimed would have lasted forever

* This one small change will cost the D&G economy £14 * This one small change will cost the D&G economy £14 Million Pounds yearlyMillion Pounds yearly

Local Housing Allowance (*LHA) / Housing Beneift (*HB) Local Housing Allowance (*LHA) / Housing Beneift (*HB) Changes:Changes:

Shared room rate only for most under 35’s previously under 25’sShared room rate only for most under 35’s previously under 25’s

In Universal Credit (October 2013 onwards) HB will be paid In Universal Credit (October 2013 onwards) HB will be paid directly to Council / Social tenants, this already happens in LHAdirectly to Council / Social tenants, this already happens in LHA

Non – Dependent deduction increased by 24% over 2 yearsNon – Dependent deduction increased by 24% over 2 years

The amount payable in LHA reduced to 30% of the average rentsThe amount payable in LHA reduced to 30% of the average rents

The maximum amounts payable under LHA reduced, this will The maximum amounts payable under LHA reduced, this will effect high rent areas, London, Birmingham etceffect high rent areas, London, Birmingham etc * LHA is for private lets * HB is for others* LHA is for private lets * HB is for others

BEDROOM TAXBEDROOM TAX

BEDROOM TAX: April 2013BEDROOM TAX: April 2013

This new change is ONLY for tenants of Council and other SocialThis new change is ONLY for tenants of Council and other SocialLandlords in our area the main ones include DGHP, Loreburn Housing, Landlords in our area the main ones include DGHP, Loreburn Housing, Irvine Housing and Home In ScotlandIrvine Housing and Home In Scotland

If tenants of working age (Under Pension Credit age currently 61.5 or If tenants of working age (Under Pension Credit age currently 61.5 or born after 5/10/51 at April 2013) have extra bedrooms they could lose born after 5/10/51 at April 2013) have extra bedrooms they could lose some or all of their existing Housing Benefit, so it is down to D&G some or all of their existing Housing Benefit, so it is down to D&G Council to stop or reduce peoples on-going Housing Benefit from April. Council to stop or reduce peoples on-going Housing Benefit from April.

Once Universal Credit (UC) applies to the claimant it will be the on-going Once Universal Credit (UC) applies to the claimant it will be the on-going UC that will be reduced.UC that will be reduced.

Once UC is fully up and running there may be no Housing BenefitOnce UC is fully up and running there may be no Housing Benefitdepartments needed in any Councils departments needed in any Councils

From April 2013

Social housing tenants of working age with one or more spare bedrooms will have their housing benefit reduced by a fixed percentage of:

14% if they have one spare room

25% if they have two or more spare rooms

Bedrooms allowed?Bedrooms allowed?

* One bedroom for each adult couple* One bedroom for each adult couple

* Any other person over 16* Any other person over 16

* Two children of the same sex who are both under 16* Two children of the same sex who are both under 16

* Any two children under 10* Any two children under 10

* Any other child* Any other child

* A Carer who is required to stay overnight on a regular * A Carer who is required to stay overnight on a regular basis to care for a disabled person and who has their own basis to care for a disabled person and who has their own home elsewherehome elsewhere

No reduction will apply if: No reduction will apply if: During the last year you have worked and not had any During the last year you have worked and not had any help with your rent, no reduction will apply for 13 help with your rent, no reduction will apply for 13 weeks.weeks.

A family member has died leaving you with an extra A family member has died leaving you with an extra bedroom, no reduction will apply for 12 months.bedroom, no reduction will apply for 12 months.

You have a shared ownership property.You have a shared ownership property.

You are in temporary (Normally) homeless You are in temporary (Normally) homeless accommodation provided by the Council, the full HB accommodation provided by the Council, the full HB paid will count towards the benefit cap though.paid will count towards the benefit cap though.

Other exempt accommodationOther exempt accommodation

Examples:Examples:

Single parent with three children, boy 7, boy 12, boy 14 Mum Single parent with three children, boy 7, boy 12, boy 14 Mum needs a three bedroom property the 2 boys under 16 can share.needs a three bedroom property the 2 boys under 16 can share.

Couple with two children, boy aged 11 girl aged 6, they need a Couple with two children, boy aged 11 girl aged 6, they need a three bedroom property, children off opposite sex can share if three bedroom property, children off opposite sex can share if under 10 but as the boy is 11 he needs his own bedroom. under 10 but as the boy is 11 he needs his own bedroom.

Couple with two children, boy aged 15 and a baby boy aged 11 Couple with two children, boy aged 15 and a baby boy aged 11 months, two children off the same sex under 16 can share, mum months, two children off the same sex under 16 can share, mum needs a two bedroom property. Once the child turn 16 they will needs a two bedroom property. Once the child turn 16 they will need a three bedroom property as anyone over 16 needs their need a three bedroom property as anyone over 16 needs their own room.own room.

Single parent with two severely disabled twin boys aged 13, both Single parent with two severely disabled twin boys aged 13, both boys have wheelchairs and live in a specially adapted four boys have wheelchairs and live in a specially adapted four bedroom house which has been extended with two extra bedroom house which has been extended with two extra bedrooms added on the ground level for the wheelchair users?bedrooms added on the ground level for the wheelchair users?

This tax will hit foster carers who have a spare This tax will hit foster carers who have a spare bedroom/s available for when they foster.bedroom/s available for when they foster.

People who share the care of children and have People who share the care of children and have extra bedrooms for when they live thereextra bedrooms for when they live there

Disabled who are unable to sleep with partners Disabled who are unable to sleep with partners due to disability and use the spare room.due to disability and use the spare room.

Disabled who need an extra bedroom for Dialysis Disabled who need an extra bedroom for Dialysis or other treatments or therapiesor other treatments or therapies

People who have extended and added an extra People who have extended and added an extra bedroom for a disabled child ectbedroom for a disabled child ect

How Much?How Much?

Mums rent is £100 weekly Mums rent is £100 weekly

She is on Income Support as a Carer for her She is on Income Support as a Carer for her disabled son aged 8, she also has another son disabled son aged 8, she also has another son aged 14 aged 14

Full Housing Benefit is paid at £100 weekly to Full Housing Benefit is paid at £100 weekly to cover her full rent cover her full rent

She is with DGHP and has a three bedrooms She is with DGHP and has a three bedrooms propertyproperty

What if anything will she loseWhat if anything will she lose

As the two boys are under 16 they can As the two boys are under 16 they can share a bedroom so mum needs a two share a bedroom so mum needs a two bedroom property, leaving her with one bedroom property, leaving her with one extra bedroom.extra bedroom.

This extra bedroom will cost her 14% of This extra bedroom will cost her 14% of her £100 weekly Housing Benefit her £100 weekly Housing Benefit meaning she will need to find £14 meaning she will need to find £14 weekly from April.weekly from April.

How Much?How Much?

Mum & Dad live in this four bedroom property and Mum & Dad live in this four bedroom property and have done so for 35 years, all the family have now have done so for 35 years, all the family have now left home. left home.

Their full rent due to Home in Scotland is £100 Their full rent due to Home in Scotland is £100 weekly weekly

They do not get full help with this due to dads They do not get full help with this due to dads benefits and his work pension, they do still get £60 benefits and his work pension, they do still get £60 weekly Housing Benefit help.weekly Housing Benefit help.

How much if anything will they lose?How much if anything will they lose?

They have three extra bedroom so the They have three extra bedroom so the maximum 25% reduction applies.maximum 25% reduction applies.

This 25% reduction is applied to their This 25% reduction is applied to their full rent due at £100 weekly and not to full rent due at £100 weekly and not to the actual Housing Benefit paid at £60 the actual Housing Benefit paid at £60 weekly. weekly.

So they will have to find £25 weekly not So they will have to find £25 weekly not the £15 you would expect?the £15 you would expect?

How much?How much?

Dad is 55 and has means tested Employment Support Dad is 55 and has means tested Employment Support AllowanceAllowance

Mum has her old age pension and Disability Living Mum has her old age pension and Disability Living Allowance Allowance

They get full housing benefit at £100 weekly They get full housing benefit at £100 weekly

For their 3 bedroom Loreburn property For their 3 bedroom Loreburn property

They lives with their 22 year old unemployed son They lives with their 22 year old unemployed son

How much will they lose if anythingHow much will they lose if anything

Nothing as mum is not of Nothing as mum is not of working age the bedroom tax working age the bedroom tax does not apply to them at this does not apply to them at this time.time.

Discretionary Hardship Payments (DHP)Discretionary Hardship Payments (DHP)

Councils have been given large increases Councils have been given large increases in DHP funding to help people effected by in DHP funding to help people effected by the bedroom tax, always ask for this help.the bedroom tax, always ask for this help.

This is not a long term solution.This is not a long term solution.

SOCIAL FUNDSOCIAL FUND

Social Fund EndingSocial Fund Ending

The budgeting loan scheme will remain in place for The budgeting loan scheme will remain in place for claimants in receipt of existing benefits until they migrate to claimants in receipt of existing benefits until they migrate to universal credituniversal credit

Community Care Grants and Crisis Loans will be abolished from 1st April 2013

In Scotland, a 'Scottish Welfare Fund' is to be created, with In Scotland, a 'Scottish Welfare Fund' is to be created, with an additional £9 million being allocated an additional £9 million being allocated

The above ‘Scottish Welfare Fund’ will be given to local councils to administer, it is NOT ring fenced for this specific purpose.

DISABILITY LIVING DISABILITY LIVING ALLOWANCE (DLA)ALLOWANCE (DLA)

CHANGES TO CHANGES TO

PERSONAL INDEPENDENCE PERSONAL INDEPENDENCE PAYMENT (PIP)PAYMENT (PIP)

DLA CHANGES & Personal Independence Payment (PIP)

What is PIP?What is PIP?

The personal independence payment (PIP) replaces working The personal independence payment (PIP) replaces working age disability living allowance (DLA) from 8 April 2013. The age disability living allowance (DLA) from 8 April 2013. The change applies across the UK.change applies across the UK.

What are the rules for PIP?What are the rules for PIP?

To get the personal independence payment you must:To get the personal independence payment you must:

be age 16-64be age 16-64

satisfy the daily living and/or mobility activities test for 3 months satisfy the daily living and/or mobility activities test for 3 months prior to claiming and be likely to continue to satisfy this test for a prior to claiming and be likely to continue to satisfy this test for a period of at least 9 months after claiming. period of at least 9 months after claiming.

Residence and presence tests

In order to claim personal independence normally you must:

have been present in Great Britain for 104 weeks out of the 156 weeks before claiming (2 out of the last 3 years) and be habitually resident

You will not be able to claim PIP once you are 65 years old but You will not be able to claim PIP once you are 65 years old but you will be able to stay on PIP if you claimed or received it you will be able to stay on PIP if you claimed or received it before you reached the age of 65. (If you are over 65 you can before you reached the age of 65. (If you are over 65 you can claim attendance allowance)claim attendance allowance)

You can receive PIP whether you are in or out of work.You can receive PIP whether you are in or out of work.

12. In order to qualify for PIP you will have score a certainnumber of points in relation to 12 activities. These are:1 Preparing food. 2 Taking nutrition.3 Managing therapy or monitoring a health condition 4 Washing and bathing.5 Managing toilet needs or incontinence.6 Dressing and undressing.7 Communicating verbally. 8 Reading and understanding signs, symbols and words.9 Engaging with other people face to face.10 Making budgeting decisions. 11 Planning and following journeys. (used in the test for the mobility component)12 Moving around. (used in the test for the mobility component)

Each activity above has a set of descriptors.

Points are awarded for each activity that you cannot do based on whether you fit a descriptor within those activities.

You can score points for more than one activity but If more than one descriptor applies in any activity you will be awarded whichever descriptor gives you the most points.

If you can show that a descriptor applies to you for 6 months within a 12 month period you will be awarded the appropriate points.

How will the activities tests be applied?

In most cases you will be asked to attend a face-to-face consultation with an independent healthcare professional (HCP).

At the consultation the HCP looks at your ability to carry out the PIP activities.

The HCP will look at your claim form and any medical evidence from your GP or consultant, if you have one.

You will be able to take someone with you to the consultation such as a family member or carer.

Following the consultation the HCP will advise a benefit decision maker at the Department for Work and Pensions who will be the one who actually decides if you are entitled to PIP and which component applies.

The decision maker will also decide the length of your award and the date when it will be reviewed, based on the likelihood of your health condition or

impairment changing.

Depending on your circumstances you may get a short award of up to 2 years or a longer award lasting up to 5 or 10 years.

If you are given a longer award you may still be contacted, during this time, to see if your needs have changed.

Two organisations are responsible for carrying out consultations.

Atos IT Services will carry out assessments in London, Southern England, the North East, the North West England and Scotland

Capita Business Services Ltd will carry out assessments in Central England, Wales and Northern Ireland  

Atos will be working in partnership with the NHS, private hospitals and national networks of locally-based health professionals, such as physiotherapists, using their premises and staff to undertake face-to-face consultations.

2. How much is PIP?

The weekly amounts of PIP are:

Daily living component

standard rate – If you have a limited ability to carry out daily living activities - £53.00

enhanced rate – If you have a severely limited ability to carry out daily living activities - £79.15

Mobility component  

standard rate – If you have a limited mobility - £21.00

enhanced rate - If you have a severely limited mobility - £55.25

The entitlement thresholds (pass mark) for the rates and components of the PIP are:

Daily Living component (activities 1 to 10)

Standard rate: 8 points

Enhanced rate: 12 points

Mobility component (activities 11 to12)

Standard rate: 8 points

Enhanced rate: 12 points

If you have a terminal illness (that is if you are suffering from a progressive disease where death can be expected within 6 months) you will automatically receive the daily living component enhanced rate.

If you are terminally ill you only have to be present in the UK

You will also be able to apply for the mobility component and receive it immediately if you qualify.

If you are in a care home you will be entitled to the mobility component so long as you satisfy the qualifying conditions.

If you are paid PIP you are free to spend the money in the way that suits you best.

PIP 'delivery timetable' is -

From 8 April 2013:

New claims for PIP will be taken in a 'controlled start area' in the North West and part of the North East of England. Postcodes affected are: BL, CA, CH (except CH5, CH6, CH7 and CH8), CW, DH, DL (except DL6, DL7, DL8, DL9, DL10 and DL11), FY, L, LA (except LA27, LA28, LA62 and LA63), M, NE, PR, SR, TS (except TS9), WA and WN.

From June 2013:

New claims for PIP will be taken in all remaining areas of Great Britain.

From October 2013: Reassessment for PIP begins for Disability Living Allowance (DLA) claimants reporting a change in their condition, and the DWP will also start contacting those reaching the end of fixed period DLA awards and young people turning 16.

From October 2015: All remaining claimants in receipt of a DLA award will be invited to make a claim for PIP. DWP will randomly select those recipients of DLA in receipt of an indefinite award or a fixed term award, and notify them about what they need to do to claim PIP.

DWP will prioritise DLA recipients who have turned 65 after 8 April 2013, when PIP was first introduced. DLA will remain in payment for all claimants until a decision on PIP has been communicated to the claimant.

UNIVERSAL CREDITUNIVERSAL CREDIT

Universal Credit (UC)Universal Credit (UC)

Universal credit is a new benefit that will be introduced from October 2013, replacing current means-tested benefits and tax credits for working-age people.

Although it will start in April in certain controlled areas in the north of England for Although it will start in April in certain controlled areas in the north of England for single JSA claimants.single JSA claimants.

It will be paid to people in or out of work.

It’s been confirmed that, for the full October launch, UC will be the first service to use It’s been confirmed that, for the full October launch, UC will be the first service to use the Identity Assurance Programme to identify claimants.the Identity Assurance Programme to identify claimants.

Claimants will choose which of these ‘Identity Providers’ to use and they will work with existing online accounts to verify the identity of the person before passing them onto DWP.

Identity Providers:

The Post Office, Cassidian, Digidentity, Experian, Ingeus, Mydex, Verizon and PaypalThe Post Office, Cassidian, Digidentity, Experian, Ingeus, Mydex, Verizon and Paypal

October 2013 to April 2014

New claims for universal credit, to be introduced over thisperiod, possibly on a gradual basis by area.

No new income-based jobseeker’s allowance, income related employment and support allowance, incomesupport or housing benefit claims are accepted onceuniversal credit has been introduced in an area.

People moving from out-of-work benefits into worktransfer onto universal credit.

April 2014

No new claims for tax credits (except for people over pension credit qualifying age)

April 2014 to October 2017

Existing claimants transfer to universal credit.

The following benefits will be abolished and replaced by universal credit:· income support;· income-based jobseeker’s allowance;· income-related employment and support allowance;· housing benefit;· child tax credit and working tax credit;· budgeting loans and crisis loan alignment payments – to be replaced by payments on account (an advance of universal credit) in cases of need.

Benefits other than those listed above will remain

· contribution-based jobseeker’s allowance. The earnings rules will be aligned with universal credit;· contributory employment and support allowance. The earnings rules will be aligned with universal credit;· child benefit;· carer’s allowance;· bereavement allowance, bereavement payment and widowed parent’s allowance;· maternity allowance;· industrial injuries disablement benefit;· statutory maternity/adoption/paternity pay;· statutory sick pay;· maternity grants, funeral payments and cold weather payments – to be extended to people on universal credit

Where one member of a couple reaches the qualifying age for pension credit and the other is of working age, they must continue to claim universal credit until both have reached pension credit qualifying age.

The capital rules will be the same as for income support, with lower and upper capital limits and tariff income assumed for capital between the limits.

This will exclude people with savings over £16,000.

How much will universal credit be?

See charts

The universal credit amounts will be at a ‘similar level of support than the current system except:

The proposed amount for most disabled children is halved,

and

The amount for most disabled adults will be reduced due to the abolition of disability premiums.

All claimants must accept a ‘claimant commitment’ as a condition of receiving universal credit. They will then be placed into one of the four following groups:

A. Claimants subject to no work-related requirements:

people with limited capability for work-related activity because of health or disability – ie, those in the support group for employment and support allowance;

lone parents or the lead carer in a couple with a child under one;

carers with regular and substantial caring responsibilities for a severely disabled person.

B. Claimants subject to the work-focused interview requirement only:

lone parents or the lead carer in a couple with a child over one but below the age of fivelone foster carers or the lead carer in a fostering couple, with a foster child under the age of 16 This group will be expected to attend periodic interviews to discuss their plans for returning to the labour market.

C. Claimants subject to the work preparation requirement:

people with limited capability for work because of health or disability – ie, those in the work-related activity group for ESA; This group will be expected to take reasonable steps to prepare for work, such as attending a skills assessment, improving personal presentation, participating in training or an employment programme, and undertaking work experience or a work placement.

D. Claimants subject to all work-related requirements:

everyone else - the default for claimants including lone parents and couples with children over the age of five.

This group will be subject to a work search requirement (including making applications and registering with employment agencies) and a work availability requirement (subject to limitations to be prescribed), as they would under jobseeker’s allowance.

Other qualifying conditions for each group may be prescribed. Each adult in a household will be placed into her/his own conditionality group depending on her/his individual situation.There will be a new concept of ‘in-work conditionality ’ where working claimants are required to look for more work unless they are earning at least the minimum wage x 35 hours a week (or less if reduced availability for work has been agreed)

Payments will change from the current fortnightly payments to monthly payments in arrears, paid directly by the DWP into a claimant’s bank account, this will also include amounts for rent.

There will be provision to pay amounts differently if it appears necessary to protect the interests of the claimant, partner to child.

Claims will normally be made online with alternative access kept to a minimum. Subsequent contact will also be online, including claimants having access to an online account with details of their award and a facility for reporting changes of circumstances.

BENEFIT CAPBENEFIT CAP

Benefit CapBenefit Cap

From April 2013 a cap will be introduced on the From April 2013 a cap will be introduced on the total amount of benefit that working age people total amount of benefit that working age people can receive, pilot starts in London. can receive, pilot starts in London.

This will mean that workless households should no This will mean that workless households should no longer receive more in benefits than the average longer receive more in benefits than the average earnings of working households. earnings of working households.

The cap will be administered jointly by DWP and The cap will be administered jointly by DWP and local authorities through deductions from Housing local authorities through deductions from Housing Benefit payments. In the longer term it will form Benefit payments. In the longer term it will form part of the new part of the new Universal Credit system. system.

What is the benefit cap?What is the benefit cap?

The benefit cap will mean that working age people can't The benefit cap will mean that working age people can't receive more than a set amount in benefits, even if they receive more than a set amount in benefits, even if they would otherwise be entitled. would otherwise be entitled.

The cap will be set at the average net earned income of The cap will be set at the average net earned income of working households. working households.

This is estimated currently to be £350 per week for a single This is estimated currently to be £350 per week for a single adult with no children and £500 per week for a couple or adult with no children and £500 per week for a couple or lone parent.lone parent.

How will the cap be applied?How will the cap be applied?

When the cap is brought in it will be applied via the Housing When the cap is brought in it will be applied via the Housing Benefit system, so will be administered by Local Benefit system, so will be administered by Local Authorities. Authorities.

This means the effect of applying the cap will depend This means the effect of applying the cap will depend entirely on a household's Housing Benefit entitlement.entirely on a household's Housing Benefit entitlement.

A household receiving enough Housing Benefit to A household receiving enough Housing Benefit to apply the cap in full:apply the cap in full:

If a household is £50 per week above the benefit cap level, If a household is £50 per week above the benefit cap level, after income from all appropriate benefits are added after income from all appropriate benefits are added together, their Housing Benefit award will be reduced by together, their Housing Benefit award will be reduced by £50 per week to bring them within the benefit cap.£50 per week to bring them within the benefit cap.

A household not receiving enough Housing Benefit to A household not receiving enough Housing Benefit to apply the cap in full:apply the cap in full:

If a household is £50 per week above the benefit cap level, If a household is £50 per week above the benefit cap level, but receive less than £50 per week in Housing Benefit, their but receive less than £50 per week in Housing Benefit, their Housing Benefit award will be reduced until just 50p Housing Benefit award will be reduced until just 50p remains.remains.

This means the household could still receive income from This means the household could still receive income from benefits which is higher than the benefit cap level.benefits which is higher than the benefit cap level.

A household receiving no Housing Benefit:A household receiving no Housing Benefit:

Some households may receive no Housing Benefit but still Some households may receive no Housing Benefit but still exceed the benefit cap level. These households will exceed the benefit cap level. These households will not have their benefit income reduced as the cap cannot be not have their benefit income reduced as the cap cannot be applied.applied.

Once Once Universal CreditUniversal Credit is brought in (October 2013 pilot is brought in (October 2013 pilot starts) the benefit cap will be applied by restricting the starts) the benefit cap will be applied by restricting the Universal Credit payment. Universal Credit payment.

This will enable all households affected to be capped in full.This will enable all households affected to be capped in full.

Broadly, the cap will affect large families with several Broadly, the cap will affect large families with several children who are potentially in receipt of higher than children who are potentially in receipt of higher than average amounts of Child Tax Credit and are more likely to average amounts of Child Tax Credit and are more likely to live in larger homes meaning more Housing Benefit.live in larger homes meaning more Housing Benefit.

It is estimated that 27% of households affected will have 5 It is estimated that 27% of households affected will have 5 or more children. 69% will have 3 or more children.or more children. 69% will have 3 or more children.

However, smaller households may still be affected if they However, smaller households may still be affected if they live in high rent areas and are therefore receiving larger live in high rent areas and are therefore receiving larger

amounts in Housing Benefit.amounts in Housing Benefit.

•Which benefits are included in the cap?Which benefits are included in the cap?

Add together your income from the following benefits:Add together your income from the following benefits:

Bereavement AllowanceBereavement Allowance Carer'sCarer's Allowance AllowanceChild BenefitChild Benefit, , Child Tax CreditChild Tax Credit, , Employment Support AllowanceEmployment Support Allowance (except support group) (except support group) Guardian's AllowanceGuardian's Allowance Housing Benefit (HB) Housing Benefit (HB) Income SupportIncome Support Industrial Injuries Disablement BenefitIndustrial Injuries Disablement Benefit (except when getting  (except when getting Constant Attendance AllowanceConstant Attendance Allowance) ) Jobseeker's AllowanceJobseeker's Allowance Maternity AllowanceMaternity Allowance Reduced Earnings AllowanceReduced Earnings Allowance Severe Disablement Allowance Universal Credit Severe Disablement Allowance Universal Credit Widowed Parent's AllowanceWidowed Parent's Allowance

Households that aren't affected by the cap?Households that aren't affected by the cap?          The cap won’t apply to households where a partner or any The cap won’t apply to households where a partner or any dependant child qualify for Working Tax Credit or receive dependant child qualify for Working Tax Credit or receive any of the following:any of the following:

Disability Living Allowance Disability Living Allowance Personal Independence Payment Personal Independence Payment Attendance Allowance Attendance Allowance Constant Attendance Allowance Constant Attendance Allowance Employment Support Allowance with support component Employment Support Allowance with support component Armed Forces Compensation Scheme payments Armed Forces Compensation Scheme payments War Pension Scheme payments (including War War Pension Scheme payments (including War Widow’s/Widower’s Pension and War disablement Widow’s/Widower’s Pension and War disablement Pension).Pension).

Or Or

If you become unemployed after being employed for 12 If you become unemployed after being employed for 12 months continuously prior to claiming benefits, and you lost months continuously prior to claiming benefits, and you lost their job through no fault of your own. their job through no fault of your own.

In this case the household receives 9 months protection In this case the household receives 9 months protection from cap. from cap.

To date there is no current definition for what constitutes To date there is no current definition for what constitutes employment.employment.