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Welfare benefits reform – what's changing

You may have heard about the welfare reform changes that started in 2013. Many existing benefits are due to be abolished and replaced by a new benefits system.

This page tells you about the most important changes that are happening and where to find more information if you think you'll be affected.

Universal Credit will replace many existing benefits

Universal Credit (UC) is a single means-tested benefit which will be paid to people of working age. It will replace most means-tested benefits including:

  • income-based Jobseeker’s Allowance (JSA)
  • income-related Employment and Support Allowance (ESA)
  • Income Support
  • Housing Benefit
  • Working Tax Credit
  • Child Tax Credit.

When will the changes happen?

  • April 2013 Universal Credit, a pilot scheme starts in Tameside, in the North of England
  • October 2013 Universal Credit will start to be introduced gradually for new claims throughout the rest of the UK.

If you're already getting benefits, you should be transferred to Universal Credit by 2017.

Personal Independence Payment replaces Disability Living Allowance

Personal Independence Payment (PIP) is a benefit for people who have a long-term health condition or disability that means they have trouble getting around or need help with daily living activities. It will eventually replace Disability Living Allowance (DLA) for people aged 16 to 64.

If you’re already getting DLA, your claim won’t automatically be transferred to PIP - you’ll have to make a new claim.

When will the changes happen?

  • April 2013 PIP pilot schemes started in some areas of England
  • June 2013 new claims for PIP started in the rest of the UK
  • October 2013 some people getting DLA have to make a new claim for PIP, for example if your condition changes or your DLA is due to come to an end
  • October 2015 the Department for Work and Pensions (DWP) will start contacting anyone still getting DLA and invite them to make a new claim for PIP. If you don’t claim or if your claim is unsuccessful, your DLA will stop.
  • More about Personal Independence Payment

Council Tax Benefit is replaced by local schemes

Before April 2013, the amount you got in Council Tax Benefit was worked out according to a national formula that was the same wherever you lived. From April 2013, local authorities are responsible for running their own Council Tax Reduction Schemes. Older people will be protected from any cuts to the rebate. However, if you’re under the age for getting Pension Credit, you're unlikely to get a full rebate and will have to pay some money towards your Council Tax bill.

When did the changes happen?

  • April 2013.

A Benefit Cap has been introduced

The Benefit Cap means there is a limit on the total amount of money from certain benefits you can get if you’re of working age. To begin with, the cap will only affect you if you're getting Housing Benefit and you may get less money towards your rent. If you're not getting Housing Benefit, your benefits won't be capped.

When did the changes happen?

  • From April 2013.

Benefit appeal rights change

There are changes to the rules about appealing against a benefit decision. You must ask for the decision to be reconsidered before you can appeal to a tribunal.

When will the changes happen?

  • April 2013 for Universal Credit and Personal Independence Payment
  • October 2013 for most other benefits.

New conditions about looking for work

When Universal Credit is introduced, if you’re out of work or in work but on a low income, you’ll have to sign a new claimant commitment. This will set out a number of work-related requirements you’ll have to meet before you can get your benefit.

If you’re already working, you’ll have to agree to look for a job with more pay or more hours to increase your income.

If you have a partner, the new requirements will apply to them too and you'll both have to sign a claimant commitment.

The claimant commitment will also apply to you if you're getting Jobseeker's Allowance, Income Support or Employment and Support Allowance before your claim is transferred to UC.

When will the changes happen?

  • From April 2013.

Parts of the Social Fund are abolished

If you get certain benefits, you may be able to get a payment or loan from the Social Fund to help towards the costs of certain unexpected or one-off expenses.

However, as part of welfare benefit reforms, parts of the Social Fund have been abolished, including Community Care grants and Crisis Loans.

Money has been given to local authorities which they may choose to spend on replacement schemes, but they don't have to. They could choose to spend the money on other things instead, such as local foodbanks and schemes which provide subsidised furniture and white goods.

When will the changes happen?

  • April 2013 some parts of the Social Fund were abolished

Child Benefit stops for high earners

Families where one parent earns £50,000 a year or more will get less money in Child Benefit. Families where one parent earns £60,000 will have to decide whether to stop getting the benefit.

When will the changes happen?

  • 7 January 2013.

Will your income from benefits be lower after the changes?

To begin with, people getting certain benefits will be protected if their income drops once they move on to Universal Credit. This is called transitional protection. There is no transitional protection for people currently getting Disability Living Allowance or Housing Benefit. This means that, for people getting these benefits, your income may go down as soon as you move on to the new system.

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