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Welfare Reform will bring about radical changes to the UK's Benefits & Tax credits regime. Whilst there is a growing awareness about the effects of Welfare Reform amongst our clients, it is also becoming increasingly clear that there is also some confusion and anxiety in respect of implementation – particularly regarding timing.

This guide is intended to give a general overview of Welfare Reform and its effects. It is, however, important to remember that law in this area is particularly dynamic and that significant changes have already been made. With this in mind it would be prudent to obtain detailed advice in respect of specific issues which may be of concern to you.

Please note that any reference to working-age or pension-age should be taken in light of the state retirement age for women – at March 2017 this will be 64 years and 6 months. This age will gradually increase so that the pension age for both men and women will be equalised.

This page contains details of the following Welfare Reforms: -







Since April 2013 Housing Benefit claims for tenants within social housing have been restricted if they live in a property that is considered as being too large for them - tenants of private housing were already subject to these restrictions previously.

HB will be reduced by a fixed % of the client’s eligible rent which, in turn, can also restricted to the following Local Housing Allowance rates: -
















North Notts






Under the size criteria one bedroom is allowed for the following occupiers: -

  • Any adult couple
  • Any other person aged 16 or over
  • Any 2 same-sex children aged up to 16
  • Any 2 mixed-sex children aged under 10
  • Any other child
  • A non-resident overnight carer who is needed to provide regular care
  • Disabled occupants unable to share a bedroom, and who are also in receipt of the middle or high rate care component of DLA or the daily-living part of PIP 

The claimant’s maximum eligible rent will be reduced by 14% if one bedroom is under occupied and by 25% if two or more bedrooms are under occupied.

Discretionary Housing Payments (DHP) may be available if additional financial help is needed in respect of housing costs. This may be awarded to cover any restriction of HB made due to under-occupancy but there is no automatic entitlement. Awards may also be made to cover moving costs, as well as deposits and any rent payable in advance if these are needed in order to secure a new tenancy agreement.

It should be remembered that there is no automatic entitlement to DHP’s and that every claim will be considered on its own merits. However, it is expected that the following claimants may get some priority: -

  • Disabled people living in accommodation which has been adapted for them
  • Claimants who are pregnant
  • Claimants whose children are at a... ‘critical point’ in their education


Council Tax Benefit has been replaced by Council Tax Support (CTS) - this is implemented and administered by Local Authorities.
Budgets in respect of CTS are 10% lower than those available for Council Tax Benefit but these are subject to the proviso that the current level of support must be maintained for claimants who have attained pension credit age. This, in turn, means that the burden for the shortfall in the CTS budget will be borne in full by working-age claimants.
From April 2013 the maximum support that is available to working-age claimants was restricted to 91% of the Council Tax liability for their household. In real terms this will mean that claimants living in a Band-A property will suffer a reduction of about £2 in their weekly award.

There are no plans to amend the Single Person’s Discount of 25% which can be claimed by taxpayers if they are the only adult within the household. Also, the current capital limit of £16k is to be maintained.

Full CTS details are available on the council’s own website.


It is intended that all claimants of working-age will have the total amount of any welfare benefits and tax credits they receive capped at the following maximum weekly amounts: -

  • £385 for couples
  • £385 for lone-parents
  • £258 for single persons

Benefits which are counted towards the cap include: -

  • Income Support
  • Jobseekers Allowance
  • Employment and Support Allowance (ESA)
  • Child Benefit
  • Child Tax Credit
  • Housing Benefit

Council Tax Support, DHP’s, and statutory benefits such as sick-pay and maternity pay will not be included within the cap. The cap will not be applied to any claimant whose household includes anyone in receipt of Disability Living Allowance, Personal Independence Payments, Attendance Allowance or the support component of Employment and Support Allowance. Additionally, no cap will be applied to working claimants who earn a minimum of £430 per month – this equates to 16 hours work per week if paid at National Minimum Wage rates. Those claiming Carers Allowance are also exempt.

A grace period of 9 months will also apply to any new claimant who has worked for the 12 months preceding any relevant claim, and who loses their job involuntarily.
Restrictions will initially be made via deductions to Housing Benefit payments so that total weekly benefit entitlements are brought within the appropriate limits. No other benefit can be capped at this time – this means that claimant’s who are not in receipt of Housing Benefit, or sufficient Housing Benefit, may not have the cap applied to them in full. However this will change for claimants who migrate to, or make a new claim for, Universal Credit.

Most households affected by the benefit cap will include 3 or more children. The majority of affected households – some 54% - will be within the Greater London area.


Universal Credit (UC) is intended to be a single, means-tested benefit which may be paid to those in work as well as out-of-work claimants. As of December 2015 UC will gradually start to replace the following benefits for claimants of working age: -

  • Jobseekers Allowance – income based
  • Employment and Support Allowance – income based
  • Housing Benefit
  • Working Tax Credit
  • Child Tax Credit
  • Income Support

Contribution-based Jobseeker’s Allowance/Employment and Support Allowance may still be claimed subject to current maximum award periods of 6 months & 12 months respectively.

UC will be paid monthly in arrears. Claimants who receive an entitlement which is lower than their current benefit awards will be offered some limited ‘transitional protection’ to cover any shortfall. The Benefit Cap will also be applied to all UC awards, subject to certain exemptions.

UC can be made up of the following elements: -

  • A basic allowance... this replaces IS – JSA – ESA etc
  • An allowance re: children... this replaces Child Tax Credit
  • Housing costs... this may include rent or mortgage liabilities
  • Allowances for particular needs... disability, or care responsibilities for example
  • Child care costs... this replaces the child-care element of Working Tax Credit

UC will be paid by the DWP who, if required, will use ‘real time’ earnings information provided to them by HMRC. This will, in theory, mitigate the need for claimants to report relevant changes in respect of their own incomes but there is some doubt as to the effectiveness of the IT systems that are required to facilitate this process. The change to UC is designed to simplify the current benefits/tax credits system… UC is expected to save the Government money over the longer term.

Whilst it is clear that our clients are becoming increasingly aware of UC, many of them believe that its introduction was actually planned for 2015, This is only partially true - new claims started local for jobseekers without children from December 2015... it is expected that all claimants will have migrated to UC by 2020 when the range of current benefits it replaces will be abolished entirely.


In June 2013 Disability Living Allowances (DLA) was replaced by a Personal Independence Payment (PIP) for all new claimants aged between 16 and 64.
There are 2 components to PIP – the Daily Living Allowance and the Mobility Allowance. Payment is awarded at one of two rates. The standard rate is paid to claimants whose abilities are limited by their health condition/disability; the enhanced rate to claimants with greater care needs, and also to those who are suffering from a terminal illness.

New claimants - apart from those suffering from a terminal illness - must have had their health condition or disability for at least 3 months when they claim PIP. They must also show that their condition/disability will endure for a further 9 months... this is well beyond the DLA ‘forward test’ of 6 months. Some PIP claimants will also need to attend a personal face-to-face assessment undertaken by ATOS on behalf of the DWP. Assessments are intended to establish a claimant’s personal circumstances and include tests relating to:-

  • Preparation of food and drink
  • Managing health conditions
  • Personal needs – bathing, grooming, dressing etc.
  • Social engagement
  • Financial planning
  • Moving around
  • Making a journey

Payments rates will be set as follows:-











Claimants with terminal illnesses will be awarded the enhanced rate of any component for which they qualify. They, and other claimants with severe disabilities, may not need to attend a face-to-face assessment – this is within the DWP’s discretion.

When submitting claims for PIP we would strongly recommend that you submit medical evidence to support your claim. This can include letters from GP's and Consultants that detail medical conditions and their impacts upon you, copies of Patient Summaries which can normally be obtained via GP, and also repeat prescriptions. This evidence is invaluable! We have found that the DWP do not make contact with any of the medical practitioners whose details are submitted as part of the claims process. 

IMPORTANT: Existing DLA claimants are not automatically entitled to PIP. Instead they will, in time, be invited to claim PIP but they will only be awarded it if they can satisfy the 9-month ‘forward test.’ DLA will continue to be paid until the claim for PIP is decided upon. It is expected that PIP will replace all existing DLA awards by the autumn of 2018 at the latest. It is essential that you make a PIP claim when asked to do so, otherwise any existing benefit payments may stop altogether. PIP is not means-tested and may be paid to claimants who are in work, or out of work.


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