Changes to Benefit

The Welfare Reform Bill has started to be introduced in stages starting from January 2012. The bill is expected to be in full force between April 2016 and April 2020.

What will this bill change?

  • It introduces Universal Credit which will be a single streamlined benefit.
  • It sets to replace Disability Living Allowance with Personal Independence Payment.
  • It introduces the Benefit Cap which will cap the amount of benefit that can be claimed.
  • It introduces size criteria framework for people who rent from Housing Associations or renting a council property. This is to stop people from living in properties that are too big for their needs.
  • It has created a new localised scheme for managing Council Tax Benefit.
  • It has changed the Social Fund scheme which was managed by the Department for Work and Pensions.

Welfare Reform - Progress so far

Since the Welfare Reform was launched many changes have been applied and the changes are now in force around the country. The changes that are now in force are:

Size Criteria for Social Sector Housing

Size criteria has now been applied to Council and Housing Association properties. This means that people living in houses larger than they need will have to move to somewhere smaller or make up the difference in rent because their Housing Benefit will be reduced.

Further information can be found in the Size Criteria Factsheet in Related downloads.

Social Fund Reform

From 1st April 2013 we took over managing the Social Fund scheme from the Department for Work and Pensions. We have created a new scheme called the Essential Living Fund.

The scheme is grant based and is open for anyone on a low income to claim.

The scheme will be able to cover applications for:

  • furniture - such as beds, wardrobes, sofas and tables
  • furnishings - such as carpets, curtains and bedding
  • white goods - such as cookers, fridges and washing machines
  • household equipment - such as cooking utensils and small electrical appliances
  • fuel connection (or re-connection) charges
  • clothing and footwear
  • general living expenses - these are day to day living expenses such as groceries, nappies, toiletries, cleaning/hygiene products, money for pay as you go fuel meters.

For more information on the new scheme, the claiming criteria and how to apply please see our Essential Living Fund page.

Council Tax Reduction

From the 1st April 2013 Council Tax Benefit was replaced with Council Tax Reduction. This change was for Working Age people only.

The change may mean that:

  • some people who previously did not have to pay any Council Tax will have a small amount to pay
  • some people who get some help may have to pay more
  • some people who did qualify to get help will no longer qualify.

For further information about how Council Tax Reduction affects you, please see our Can I claim Benefit page.

Benefit Cap

The Benefit Cap came into force from July 2013. It affects working age people only. It restricts the amount of benefit people are able to receive a week.
It is set at:

  • £500 per week for couples and lone parents
  • £350 per week for single adults

Please see the Benefit Cap Factsheet in Related downloads for a full list of the benefits included in the cap and the circumstances that excludes you from being affected.

Personal Independence Payments

From April 2013 Disability Allowance was replaced by Personal Independence Payment (PIP). This change will only affect people aged 16-64. PIP is to help towards the extra costs which are due to a disability, health condition or impairment. It is based on how a person's condition affects their ability to lead an independent life.

New claims for PIP are being accepted around the country and people who are still receiving Disability Living Allowance but are coming to the end of their fixed period are being contacted by the Department for Work and Pensions to make a claim for PIP instead. 

The Department for Work and Pensions has further information on PIP and how it will affect you and can be found here. This website also includes an online checker which can be used to see if PIP will affect you, when your Disability Living Allowance will be affected and information on when you should make a claim for PIP. 

The Introduction of Universal Credit from October 2013

From 2013/2014 Universal Credit will replace:

  • Income Support
  • Income Based Jobseekers Allowance
  • Income Related Employment Support Allowance
  • Housing Benefit
  • Child Tax Credit
  • Working Tax Credit. 

Universal credit is calculated as a basic allowance for a single person or couple plus additional amounts for:

  • Each child or qualifying young person you are responsible for (with extra additions if they are disabled)
  • child care costs
  • If you have a 'limited capability for work'
  • If you have regular and substantial caring responsibilities for a severely disabled person
  • Housing costs (mortgage interest payments if you are unemployed and rent payments). 

You will get the full allowance possible if your household has no other income and has less than £6000 savings. There will be no award if your savings are over £16,000. There will be one payment per household, paid monthly.

Timeline for the Replacement of Housing Benefit

The replacement will take place in 3 phases over four years between 2013 and 2017.

October 2013 to April 2014 
  • 500,000 people making new claims for the benefits Universal Credit replaces will get Universal Credit instead. This only applies to those who are out of work.
  • 500,000 people who currently claim (and their partners and dependants) will move on to Universal Credit when they have a significant change of circumstances, such as starting a new job or when a child is born. 

From April 2014

  • New claims for people who are working will move to universal credit from April 2014. 
  • From the end of 2015 - the end of 2020
  • Around 3 million households will be transferred to Universal Credit by council boundary as the old benefit system winds down. 

Further information about Universal Credit can be found by visiting The Department for Work and Pensions website

Page last updated: 15/05/2014