Welfare Reform 2011
There has been a lot of news surrounding the changes the government want to introduce in the Welfare and Benefit sector. Already some of the reforms have been amended, shelved delayed or are still being looked at. Below is a brief outline of the changes the government have introduced or intend to introduce from 2013, BUT the government may change their mind on future reforms!
Changes From April 2011:
Increase in Non Dependant Deductions – with effect from 11th April 2011, if someone other than your partner/spouse over the age of 18 and is not in further education, lives in your house, the amount deducted from your housing benefit has increased.
Child Tax Credit
The income limit for Child Tax Credit (CTC) is going down from £50,000 to £40,000 per household from 6 April 2011. This change means if your household income is over the new limit, your basic Child Tax Credit payment of £545 will be reduced.
The maximum that was paid in relation to a child was £2,300 per year, this has increased to £2,555, but remains means tested.
For those with children in nursery or with child minders, CTC will pay 70% of bills up to £175.00 per week for one child, £300 per week for two or more children. This means that the maximum help you can get through tax credits for your childcare will be:
• £122.50 a week for one child (70% of £175)
• £210 a week for two or more children (70% of £300)
This change may reduce your tax credits payments.
Child Tax Credit no longer pays extra for having a baby under the age of one year.
Working Tax Credit - If you're aged 60 or over - from 6 April 2011, you only need to work 16 hours or more to qualify for Working Tax Credit.
Equalisation of State Pension Age / Increase in Pension Credit Age – Continues, which means that some people have to wait longer to claim their state pension and to claim for the Winter Fuel Payment and bus pass.
Proposed changes from April 2013:
Job Seekers Allowance – plans to reduce housing benefit payments by 10%, meaning that your rent & service charge costs were not paid in full for those who had been on Job Seekers Allowance for more than 6 months have been cancelled. This is really good news, as despite extreme financial hardship, the roof over your head should be safe, provided your housing benefit is paid direct to your landlord. Remember, if your water, electricity or heating charges are included in the rent you will remain responsible for paying these costs.
Housing Benefit for working age social rented sector customers may be restricted for those who are occupying a larger property than their household size and structure need. (Pensioners are not affected by this). Magna currently have an incentive schemes to assist those residents who are interested in downsizing – for more information please phone the rehousing team on 01305 216062.
Disability Living Allowance - to be replaced by a new benefit called Personal Independence Payment (PIP).
Universal Credit – proposed new benefit to replace all means tested benefits. It is expected that, if parliamentary approval is given it will be introduced for all new claims in autumn 2013. ‘Universal Credit: welfare that works’. It suggests that Universal Credit will replace Housing Benefit, Income Support, Income-Related Jobseekers Allowance, Income-Based Employment and Support Allowance, and Tax Credits. It is expected that existing claimants of these benefits when Universal Credit is introduced will slowly be migrated over to Universal Credit by 2017.
As we understand how the changes planned for April 2013 and beyond will affect you, we will try to keep you informed. Should you have any concerns please telephone the income management team on 01305 216067 and speak to your Housing Officer in the income management team, or email
To find out more about welfare reform please visit the Department for Work and Pensions website »
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