The following page provides details of changes to benefit that may affect you and your family.
Benefit rate freeze - from April 2016
From April 2016, most working-age benefits were frozen for four years.
This includes: Jobseekers Allowance, Employment and Support Allowance, Income Support, Child Benefit, Tax Credits (excluding disability elements) and applicable amounts for Housing Benefit.
Benefits not included in the freeze
Disability Benefits (Personal Independence Payment, Disability Living Allowance and Attendance Allowance); Maternity Benefits; Statutory Sick Pay and Employment; and Support Allowance (Support Group only) are excluded and will continue to be uprated in the normal way in line with the Consumer Price Index.
The Benefit Cap
The benefit cap restricts the amount of benefit that an out of work family can receive. For more details see the benefit cap pages.
Employment and Support Allowance Work Related Activity Component abolished
From April 2017 new claimants in the Employment and Support Allowance (ESA) work-related activity group (those who receive the lower rate of ESA) will only be paid the equivalent of Jobseekers Allowance (JSA). This is currently worth £29.05 a week. They will receive additional support to help them find work. Current claimants will not be affected by this change.
From April 2016 jobseekers will be required to attend the Jobcentre weekly for the first 3 months of their claim and the more intensive support of the ‘Help to Work’ Programme (currently for the long-term unemployed) will be brought forward
Changes to Tax Credits
Reduction in the income disregard
From April 2016 the income disregard for tax credits reduced to £2,500. This means if your income increases by up to £2,500 your tax credit award will not be affected.
Tax Credits are paid based on your current circumstances and household income from the previous year. After the tax year ends HMRC compare the actual income for the year which has just ended with your income from the previous year.
Tax Credit support limited to two children
Support to families provided through Child Tax Credit will be limited to two children, any children born after April 2017 will not be eligible for support. New claims for Universal Credit after this date will also be limited to two children. Child Benefit for children born after April 2017 will continue to be paid.
If you already receive tax credits or Universal Credit you won’t be affected by the new rules. Exceptions will be made for multiple births.
In addition to the two-child limit, the family element in tax credits will be removed for new claims and new births from April 2017. Families with children born before April 2017 will continue to receive the family element but new claims made after this date will not.
Tax Credit overpayments
HMRC will recover overpayments of Working Tax Credit from payments of Child Tax Credit and overpayments of Child Tax Credit from payments of Working Tax Credit.
They will also extend the use of private sector debt collectors to improve the collection of tax credit debt.
Free childcare increased
From September 2017 families with three and four-year-olds working more than 16 hours a week on incomes of less than £100,000 a year will be eligible to receive 30 hours of free childcare per week.