Welfare reform

The Government has made significant changes to many areas of the welfare system. This page will let you know if you will be affected.

Benefit appeal changes

The appeals process is changing for disputes against decisions made by the Department for Work and Pensions (DWP) and child maintenance cases.

From 28 October 2013 appeals can no longer be made directly to Her Majesty’s Courts and Tribunals Service (HMCTS) for decisions made on or after this date, instead the DWP will have to reconsider the decision first. This is known as mandatory reconsideration. This change does not apply to Housing Benefit, Child Benefit and Tax Credits.

During the mandatory reconsideration process, claimants will be able to submit further evidence which may enable the dispute to be resolved without having to appeal. However, if the decision is not changed the reasons will be set out in a mandatory reconsideration notice along with the relevant appeal rights.

Under the new rules, Employment and Support Allowance (ESA) claimants will lose their right to be paid the assessment rate when they first challenge a decision that they are fit for work. Instead, they will have to sign on as available for work and claim Jobseeker’s Allowance (JSA) if it is payable, or wait until the mandatory reconsideration has been carried out to reclaim ESA.

If the decision is still disputed there is a time limit of one month for the decision to be appealed. Use form SSCS1 and send directly to HM Courts and Tribunals Service.

More details of the new appeals process [external link]

Download an appeals form [external link, pdf document]

Benefits cap

The benefit cap is a limit that has been set on the maximum amount of benefit that some working age people can receive.

Visit the benefits cap page on the GOV.UK website to see if you will be affected [external link]

The Welfare Reform and Work Act (2016) [external link] introduces some changes to the benefit cap. These changes, which will take effect in autumn 2016, include changes to the benefit cap levels to £20,000 a year for couples with or without children and lone parents, and £13,400 for single people without children. They also include additional exemptions for recipients of Guardian’s Allowance, Carer’s Allowance and Universal Credit claimants who receive payments towards carer’s costs.

For more information about the benefit cap changes please visit www.Gov.UK/benefit-cap [external link]

Council tax support

Council tax benefit has been replaced by council tax support

Social fund

The government is stopping parts of the discretionary Social Fund and local authorities will be asked to provide their own schemes to help people. The change took effect in April 2013.

There will be no cash payments or loans.

Short-term Advances will replace Interim Payments and Social Fund Crisis Loan alignment payments for all benefits.

When someone makes, or is about to make a new claim to benefit, the can sometimes encounter a period of financial need before receiving their first payment of benefit. Short term Advances of benefit will help claimants through that period by providing an advance of their future benefit award, which will then be recovered from subsequent payments of benefit.

Budgeting Advances will replace Social Fund Budgeting Loans for eligible Universal Credit claimants. Budgeting Loans will continue to be available to those claiming legacy benefits until all such claims have either been closed or migrated to Universal Credit.

More information about the social fund

Personal Independence Payment (PIP)

Personal Independent Payment will replace Disability Living Allowance (DLA) for eligible claimants aged 18 to 64 from April 2013.

It will remain non-means tested and non-taxable and is payable to those both in and out of work.

Like DLA, PIP will be made up of two components:

  • Daily Living Component, and
  • Mobility Component.

Each component will have two levels:

  • Standard, and
  • Enhanced.

PIP will be awarded for one or both of these components.

How is the change being decided?

Claimants will be assessed for their eligibility for the new benefit.

The assessment will involve health professionals who will consider the evidence provided by the claimant, along with any further medical evidence.

Most people will be asked to attend face-to-face consultation as part of the claims process.

The health professional will provide advice to the DWP benefit Case Manager, who will then use this information to decide on the claimants’ entitlement for PIP.

Who will the change not apply to?

Children under the age of 16 will continue to receive DLA. DWP will contact the parent or carer of the claimant before their 16th birthday to let them know that they should consider claiming PIP.

People aged 65 or over on 8 April 2013 will continue to get DLA as long as they remain eligible.

People receiving Attendance Allowance will not be affected the introduction of PIP.

When will the change be implemented?

As of June 2013 new DLA claimants will be assessed for PIP.

From October 2013 DWP will start to reassess existing DLA claimants.  Re-assessment will start with fixed period DLA awards that are due for renewal, where a young person is approaching their 16th birthday or where a change in condition has been reported.

From October 2015 DWP will begin selecting existing DLA claimants and letting them know the process for claiming PIP.  Those who have turned 65 after the 8 April 2013 will be prioritised.

More information about PIP [external link]

State pension age

Retirement age is not the same as State Pension age which can be between 61 and 68, depending when someone was born and if they’re male or female. Anyone can carry on working past State Pension age.

Calculate your state pension age using the GOV.UK pension calculator [external link]

The changes to state pension age will affect people’s ability to claim working age benefits.

Under occupation ('bedroom tax')

Under occupation is where the Government believes you are living in a property that is bigger than you need. Because there is a shortage of family homes across the country, the Government is going to reduce the amount of housing benefit for people who are living in social rented sector tenancies (which include Council tenants and tenants of social housing and registered social landlords) and are under occupying.

You are classed as under occupying your home if you have more bedrooms than you need.

You need one bedroom for each of the following:

  • a couple
  • a person who is not a child (aged 16 and over)
  • two children of the same sex
  • two children who are under 10
  • any other child (other than a foster child or child whose main home is elsewhere)
  • a carer (or group of carers) providing overnight care

Use our bedroom calculator to find out if you will be affected [external link]

If you are classed as under occupying the amount of Housing Benefit you receive will be reduced.

There are two rates for the reduction:

  • if you have one extra bedroom your Housing Benefit will reduce by 14%
  • if you have two or more extra bedrooms your Housing Benefit will reduce by 25%

If you are under occupying, you have several options. You can:

  • pay the difference yourself and stay where you are.
  • move to a property with the number of bedrooms for your family size. Ask your landlord for more information or register on the COMPASS Choice Based Lettings scheme
  • take a lodger in to use your extra bedroom. You should be aware that doing so could affect the amount of Housing Benefit you are entitled to.

Everybody claiming housing benefit between 16 and pension age and who is living in a social rented sector tenancy will be affected.

Those of pensionable age will be excluded from the under occupation changes.

Under occupation and insurance

Removal of the spare room subsidy – options and support available

Find out about the options and support available for claimants affected by the removal of the spare room subsidy.

Home-swapping as a result of the removal of the spare room subsidy is straightforward. Here, one successful applicant describes how the process went for him.

Universal credit

Universal credit (UC) will replace the majority of means-tested benefits and tax credits currently paid to people of working age. It is being rolled out in stages, with everyone expected to be on UC by March 2022.

UC will be paid monthly in arrears and will be paid directly to you. It will be made up of a basic personal amount (similar to the current Jobseeker’s allowance) and top ups will be available for disability, caring responsibilities, housing costs and children. You will be expected to access and manage your benefit online (this may not apply to you if you are classed as vulnerable)

It is intended that the amount of UC will reduce in line with the amount of money you earn.

Existing benefits that will be replaced by UC are:

  • Income Support
  • Income Related Jobseeker’s Allowance
  • Income Related Employment Support Allowance
  • Housing Benefit
  • Working Tax Credit
  • Child Tax Credit

You will have to wait up to a month for an award to be changed to reflect a change in circumstances.  Any change is treated as occurring from the beginning of the month, regardless of when it actually occurred.

More information about Universal Credit on the GOV.UK website [external link]

Click here for free online support to help Universal Credit claimants with their personal finances [external link]

Useful contacts and advice