Rule changes for Housing Benefit and Council Tax Benefit from April 2012
The UK Coalition Government has introduced their Welfare Reforms, intending to deliver savings of £18bn per year by 2014/15. The Welfare Reform Act completed its passage through the UK Parliament in March 2012. The legislation aims to simplify the system and incentivise work, seeing individuals and households as being financially better off by moving off benefits and into work.
The changes being brought about by the UK Government’s Welfare Reforms are complex and broad and much of the detail around implementation is not yet known. However, we do know the changes includes provision for the introduction of Universal Credit to replace existing benefits, such as Jobseekers Allowance, Income Support, Housing Benefit and tax credits. It also includes the introduction of Personal Independence Payment, replacing Disability Working Allowance, as well as a sweep of other amendments. The proposed changes are being introduced over time, with many being introduced in 2013 or later.
Although many details are still missing and plans may change, here is what we know so far:
- Housing Benefit will be restricted for some people whose home is larger than their household needs. This will apply to council and housing association tenants of 'working age'. At present, 'working age' people become 'pension age' people when they reach the state retirement age forwomen. This is increasing from 60 to 65 between April 2010 and April 2020. Read more about these 'under-occupation' rules.
- There will be a 'benefit cap' - a maximum benefit income level. Some benefits will be exempt from the cap. Housing Benefit isthe benefit that will be reduced when someone's benefit income reaches the cap level. The cap is most likely to affect families with more than four children. Read more about the 'benefit cap'.
- Council Tax Benefit will be replaced with a Scottish Council Tax Reduction scheme from April 2013 Read more about this.
- Housing Benefit will become part of the Universal Credit scheme that will replace out-of-work income-related benefits and tax credits to help people move into work. Consequently, Housing Benefit will be abolished and replaced by a Housing element within Universal Credit, which will be paid monthly, in arrears direct to tenants who will have responsibility to pay their rent themselves from the Universal Credit. This is a particularly significant change as currently Housing Benefit is generally paid direct to landlords.