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Welfare Reform and Work Bill

Welfare Reform and Work Bill

A list of welfare reform changes for 2015/16 and beyond and the impact on City of Lincoln and North Kesteven is available to download from the downloads section.

From April 2017:

Bereavement Support Payment

The current bereavement benefits (Bereavement Allowance, Bereavement Payment, Widowed Parent’s Allowance) will be replaced with the new Bereavement Support Payment (BSP). This will be introduced for new claims from April 2017.

From 6 April 2017 ‘Bereavement Support Payment’ (BSP). This will replace and simplify existing types of bereavement support listed above, and extend eligibility to those under the age of 45.

  • BSP can provide a one-off lump sum followed by up to 18 regular monthly payments.
  • There will be two rates of support with BSP, for those with, and without dependent children: those with children, or who are pregnant, receive £3500 lump sum and £350 monthly payment, whilst those without dependents will receive a £2500 lump sum and £100 monthly payment.
  • BSP is not means tested and all payments are tax free.
  • Marrying, cohabiting or entering a civil partnership will not affect BSP eligibility.
  • The deceased spouse or civil partner must normally have paid National Insurance; however contribution requirements are reduced and simplified with BSP.

You can find information on the The Bereavement Support Payment Regulations 2017 the Government Legislation website.

Abolishment of ESA WR

Work-Related Activity Component paid to those in the WRAG would be abolished for new claims from April 2017. The equivalent element in Universal Credit will also be abolished. This will involve a reduction of £29.05 a week (2017-18 rates) and aligns the rate of payment with those claiming Jobseeker’s Allowance (£73.10 a week). Existing claimants will not be affected, while there will be protections for those who may move into the WRAG or Universal Credit equivalent from the Support Group.

The changes were introduced to “remove the financial incentives that could otherwise discourage claimants from taking steps back to work”. http://www.legislation.gov.uk/uksi/2017/204/made

Tax Credit Family Element removed

People starting a family after April 2017 will no longer be eligible for the Family Element in tax credits (£545). The equivalent in Universal Credit, known as the First Child Element, will also not be available for new claims from April 2017.

Universal Credit requirements for parents to look for work

Parents with a youngest child aged 3, including lone parents, are expected to look for work if they want to claim Universal Credit.

Personal Tax Allowance

Personal tax allowance will rise to £11,500 and the higher rate threshold to £45,000.

National Living Wage

National Living Wage (NLW) will rise from £7.20 to £7.50.

National Minimum Wage

National Minimum Wage (NMW) will rise from April 2017 for the following:

  • increase the rate for 21 to 24 year olds from £6.95 to £7.05 per hour
  • increase the rate for 18 to 20 year olds from £5.55 to £5.60 per hour
  • increase the rate for 16 to 17 year olds from £4.00 to £4.05 per hour
  • increase the rate for apprentices from £3.40 to £3.50 per hour

Change in Hardship Payments for mentally ill and homeless

The government has proposed that hardship payments (of 40% of the benefit amount) be automatically payable to jobseekers who are mentally ill or homeless when they are sanctioned. These claimants currently have to apply for hardship payments when they've been sanctioned and may be refused. The proposal means to add them to the group of vulnerable people who can receive hardship payments whilst under sanction without applying for them first (such as claimants with children or long-term health problems).

Removal of Housing Support for 18-21 year olds

From 1 April 2017, subject to a number of exceptions, any 18- to 21-year-old who makes a new claim for universal credit in an area where the full service has been rolled out will not have any housing costs included in their assessment.

As this measure is limited to the full service universal credit areas it will therefore mean that, initially, the number of people affected will be limited. As the full service is gradually rolled out across the country, however, the policy will impact on more and more young claimants with housing costs.

In addition, the DWP has said that the policy will not affect people in receipt of housing benefit or in receipt of housing costs in their universal credit at the point of change on 1 April 2017. Neither will it affect people receiving universal credit in a live service area until the full service is rolled out in that area.

The full exemptions are:

  • Is responsible for a child or a qualifying young person;
  • Was a care leaver before reaching the age of 18;
  • Receives the care component of disability living allowance at the middle or highest rate or the daily living component of personal independence payment;
  • Has been subject to, or threatened with, domestic violence by their partner, former partner, or a family member;
  • Cannot live with their parents due to a serious risk to their physical or mental health and the Secretary of State considers it inappropriate to expect them to do so;
  • Has earned income equal to or exceeding the monthly amount they would earn whilst working 16 hours per week at the National Minimum Wage; or
  • Has earnings in each of the 6 months ending before the calendar month in which the claim for universal credit is made, that are equal to or more than the appropriate earnings threshold (in which case a six-month exemption will apply).

You can find more information on the Universal Credit Regulations 2017 on the Government legislation website.

If Housing Costs are removed, this also means there is no entitlement to DHP.

Bedroom Tax Changes

The DWP says that it will introduce amendments to the bedroom tax regulations, to come into effect from 1 April 2017 in order to comply with the judgement of the Supreme Court in [2016] UKSC 58, published on 9 November 2016, which declared the legislation was unlawful in respect of two claimants.

In brief, these claimants and their circumstances were:  

  • Mr Rutherford – who required an extra bedroom for an overnight carer of his severely disabled grandchild who receives overnight care – the      regulations currently only allow for an extra bedroom if the overnight      care is required for an adult (i.e. the claimant or their partner), and
  • Mr and Mrs Carmichael – who required an extra bedroom as they were unable to share a bedroom due to Mrs Carmichael’s severe disability – the regulations currently only allow for an extra bedroom if it is a child who is unable to share a bedroom due to disability.

Both of these cases mean that the DWP will now amend the size criteria rules in the bedroom tax regulations that apply to housing benefit claims in the social rented sector. In addition, similar amendments will be made to the LHA size criteria rules that apply to housing benefit claims in the private rented sector.

The DWP has proposed that the amended regulations will provide for the following circumstances:

  • The size criteria rules will be amended to allow an extra bedroom where a child is in need of overnight care from a non-resident carer (or team of carers). The qualifying conditions will mirror the existing rules that apply to disabled adults requiring overnight care.
  • In addition, these rules will be extended to also apply to disabled adult non-dependants in the household, who may be in need of overnight care from a non-resident carer.
  • The size criteria rules will be extended to allow for two bedrooms in respect of an adult couple where one or both members of a couple are severely disabled and, as a direct result of their disability, are unable to share a bedroom. This will mirror the existing size criteria rules that currently only apply to children.

The qualifying conditions will be to allow an extra bedroom where one member of the couple is in receipt of the middle- or higher-rate care component of DLA, the daily-living component of PIP, higher-rate AA or the Armed Forces Independence Payment.

HB Circular A3/2017

Tax Credits and Universal Credit two child limit

In the summer budget 2015, the government proposed that support for children through Tax Credits and Universal Credit will be limited to two children from April 2017.

For Child Tax Credit, elements will not be included for a third (or more) child born on or after 6 April 2017 unless an exception applies. Elements will continue to be included for all children born before 6 April 2017.

For Universal Credit, elements will not be included for the third (or more) child who joins the family on or after 6 April 2017 unless an exception applies. Elements will continue to be included for all children who were part of the family before 6 April 2017.

Exceptions to the two-child limit in universal credit and child tax credit

You can see the Consultation response to Exceptions to the limiting of the individual Child Element of Child Tax Credit and the Child Element of Universal Credit to a maximum of two children.

The government has published its reply to responses to its October 2016 consultation on planned exceptions to the two-child limit in universal credit and child tax credit. Those planned exemptions were in respect of a third or subsequent child who is:

  • Living long-term with family or friends because they are unable to live with their parents and could otherwise be at risk of entering the care system, or
  • Born as a result of rape.
  • The government has now confirmed its approach in respect of the exceptions, including that it will:
    • Expand the multiple birth exception so the child element is awarded for all third or subsequent children in a family born as part of a multiple birth, other than the first born. Where the first child of the multiple birth is either the first or second child in the household, a child element will also be awarded for that child.
    • Retain the proposed requirement for family or friends caring for a child under informal arrangements to provide evidence from a social worker to support this.
    • Use a third-party model of determining whether a child is likely to have been conceived as a result of rape, which, in the government's view, is the best approach to take, and there will be no time limit placed on when the report needs to be made to the third-party professional.
    • Provide for a non-consensual conception exception for third or subsequent children conceived within a domestic abuse situation involving coercion and control, and
    • Provide that where there has been a conviction or compensation award for rape or domestic coercion and control, this will act as an alternative to the third-party model as a means of evidencing that a third or subsequent child is likely to have been conceived through non-consensual sex
    • Part of a multiple birth where there were previously fewer than two children in the household

Families with more than two children cannot make a new claim for Universal Credit until November 2018, even if they are in a full digital service area. They will have to claim Child Tax Credit/Housing Benefits in the meantime.

Welfare Reform changes up to April 2017 can be found below:


  • Pensioners Protected by Triple Lock - state pension payments would rise in line with whichever is the highest of earnings, inflation, or 2.5%
  • Pensioner claims unaffected - HB claims backdated for up to 3 months


  • From July 2015 DWP started to invite the remaining people who currently have a long-term or indefinite award of DLA to claim PIP
  • Existing DLA claimants do not need to do anything until the DWP contacts them in writing to invite them to make a claim for PIP
  • It is not an option to remain on DLA and there is no automatic entitlement to PIP where a claimant is in receipt of DLA
  • Pensioners and under 16 year old will remain on DLA

National Minimum wage 

  • Increased to £6.50 per hour for over 25 year old from 01/10/2015

Right to buy (RTB) Registered Social Landlord (RSL)

  • From 26/11/2015 - RLS tenants can now apply to buy their properties – currently being trialled

Local Housing Allowance (LHA) Freeze 

  • From April 2016 LHA rates are frozen until 2020/2021

National Living Wage

  • From April 2016 NMW increases to £7.20 per hour for over 25 years old

Working Tax Credit in-year increase in income

  • From April 2016 the amount by which a tax credit claimant’s income can increase in-year compared to their previous year’s income before their award is adjusted (the income rise disregard) will be reduced from £5,000 to £2,500

State Pensions increase

  • From April 2016 the state pension for existing pensioners will rise by 2.9%, or £3.35, to £119.30 a week from April, to match the rise in average earnings
  • The new FULL state pension will be £155.65pw for 2016/17 (for 35 qualifying years). Each qualifying year equates to £4.44 a week on your pension (£155.65 / 35)

State Pension age increase

  • From April 2016 the state pension for existing pensioners will rise by 2.9%, or £3.35, to £119.30 a week from April, to match the rise in average earnings
  • The new FULL state pension will be £155.65pw for 2016/17 (for 35 qualifying years). Each qualifying year equates to £4.44 a week on your pension (£155.65 / 35)


  • NKDC 2016/17 allocation £107,514
  • COLC 2016/17 allocation £173,675

Applicable amount freezes for working age for 4 years

  • Frozen until 2020/21

Reduce backdating to 1 month

  • In line with Universal Credit backdating
  • Pensioners backdate will remain 3 months auto award
  • CTR will remain at 6 months

Reduced rents in social housing by 1% a year for 4 years

  • 1% reduction each year until 2020/21, meaning 12% reduction in average rents by 2020/2021
  • This will affect Housing Associations and Local Authority Housing stock
  • The ‘rent’ for the rent reduction excludes any service charge
  • 1% reduction to social housing rent will be exempt for 2016/17 for supported accommodation

Personal Allowance Increase – income tax

  • Will increase to £11k

Child Benefit Freeze

  • A freeze in child benefit amounts for the duration of the current Parliament, after which time it shall be uprated by Consumer Price Index (CPI)

Reducing temporary absence payments period

  • Housing benefit and pension credit payments for people who are outside Great Britain will be limited to four weeks, reduced from the current 13 weeks limit

Family Premium and Allowances to be withdrawn all HB and CTR for Pensioners

  • Remove the family premium (£17.40 per week, where claimant has responsibility for a child/young person) from new claims for HB with effect from 1 May 2016. It will also affect existing claimants who, from that same date, would otherwise have received the family premium because of a change in circumstances
  • Note that these new rules apply to both the working and pension age regulations and that transitional provisions protect those in receipt of Housing Benefit on 30 April 2016 (until a relevant change in circumstances occur)
  • Family Premium will not be reinstated if the claimant reclaims HB and responsible for such a person in the future

Benefit Cap

  • The benefit cap was originally introduced in April 2013 and ensured that no working age household on benefits would receive more income than a family earning the average wage (£26,000) (£500 per week). The cap for single claimants was set at £18,200 per annum (£350 per week)
  • Working age households with a resident receiving Disability Living Allowance (DLA) or Personal Independence Payments (PIP) are exempt from the cap, along with any household who is working enough hours to be eligible to claim Working Tax Credit (WTC). You can check whether you are entitled to WTC using the entitled to calculator
  • The summer budget in July 2015 confirmed that the annual cap has been reviewed will be reduced to £20,000 (£384.62 per week). The cap for single claimants is to be reduced to £13,400 (£257.69 per week) from Autumn 2016. Households that will potentially be affected will have been contacted by The Department for Works and Pensions (DWP) by 10th June 2016. The previous exemptions will apply with the new rates, meaning disabled customers, or households with a disabled child will not be affected
  • The DWP have run a more in depth scan and wrote to customers potentially affected week commencing 12/09/2016 and have confirmed that the benefit cap will be introduced from 07/11/2016 over a 12 week period across the country, with the regions with the fewest number of households affected by the benefit cap being administered first
  • You can find a full breakdown of benefits included in the cap as well as those that that are not at www.gov.uk/benefit-cap/benefits-included-in-the-cap

For financial or general advice you can contact North Kesteven District Council on (01529) 414155 or City of Lincoln Council on (01522) 873355 or visit our website  www.n-kesteven.gov.uk/ucan

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