Why is this important?
Welfare benefits changes
Date: 1 February 2013
You may have heard about the welfare reform changes that start in 2013. Many existing means-tested benefits will eventually be abolished and replaced by a new benefits system.
Some of the main changes include:
The introduction of a new single benefit for working-age people, called Universal Credit. It will gradually replace most means-tested benefits such as income-based Jobseeker's Allowance, income-related Employment and Support Allowance, tax credits and Housing Benefit.
The introduction of a cap on the total amount of benefit you can get. To begin with, the cap may affect you only if you're getting Housing Benefit and could mean you will get less money towards your rent. But if you start getting Universal Credit, it could also affect you then.
A cut to your Housing Benefit if you live in social housing, such as council or housing association accommodation. This will only apply if you're of working age and you have more bedrooms than you're allowed after the new rules come in.
The abolition of Council Tax Benefit which is due to be replaced by new schemes run by your local authority called Council Tax Reduction. Schemes are likely to be different, depending on where you live. It's unlikely that people under the age for getting Pension Credit will still be able to get a full rebate on their council tax bill.
The introduction of a new benefit called Personal Independence Payment - or PIP. PIP will gradually replace Disability Living Allowance (DLA), which is currently paid to people under 65 who have daily care needs or difficulty getting about. Not everyone who gets DLA will be able to get PIP in future.
When will the changes happen?
Universal Credit - pilot schemes are due to start in some areas of England on 29 April. The new benefit will be rolled out nationally for new claimants in October, with existing benefit claimants gradually being transferred to Universal Credit over the next few years.
Benefit Cap – this will be introduced in four London boroughs in April. It will be rolled out to other areas by September 2013.
Abolition of Council Tax Benefit - Council Tax Benefit will be replaced by local schemes in April.
Housing Benefit cuts for some social housing tenants – this is due to be introduced in April 2013
Personal Independent Payment – pilot schemes are due to start in some areas of England in April. From June onwards, all new claims will be for PIP instead of DLA. From October, some existing DLA claimants will have to make new claims for PIP, with the rest being asked to claim PIP from October 2015 onwards.
Will you get less money?
To begin with, people getting certain benefits will have some protection if their income drops once they move onto Universal Credit. This is called transitional protection. It applies to people getting benefits such as income-based Jobseeker's Allowance and income-related Employment and Support Allowance. However, in the future, you may end up getting less money under Universal Credit.
There is no transitional protection for people currently getting Disability Living Allowance or Housing Benefit. This means that your income may go down as soon as you move onto the new system.
There will be some people who will be better off under the new system. This might apply, for example, to an unemployed single person who starts a low-paid job for a few hours a week.
If you're worried that the benefit changes will reduce the money you have coming in, it's a good idea to start thinking ahead. For example, you could get a benefits check on your current entitlement and see whether there is any transitional protection available. You could also get some advice about budgeting.
For more information about the benefits changes, who will be affected and how to plan ahead, go to our new section on Welfare benefits reform.