Benefit Update - Changes from April 2017

Mike Tonkin, Welfare Manager

Mike Tonkin, Welfare Manager

The following benefit changes are set to take effect from April 2017. Some may be subject to change or approval.

Universal Credit Changes

  • From 6 April 2017 Universal Credit will be limited to 2 children. Claimants who are already claiming Universal Credit will have no increase for subsequent children born on or after 6 April. New claims for Universal Credit from families that already have more than two children will be redirected to Tax Credits until November 2018 so they don't financially lose out.
  • If a claimant’s eldest child is born on or after 6 April 2017 they will not be eligible for the ‘first child premium’ in Universal Credit. This is a higher rate of child element for the first child, which means the child element for the first child will be the same rate as for the second child.
  • Parents, including lone parents, will be expected to attend work focused interviews when their youngest child turns 1, and then start work preparation when their youngest child turns 2. This leads to them being expected to look for work when their youngest child turns 3.
  • The Limited Capability for Work element will be abolished to mirror changes to Employment and Support Allowance, thus reducing financial support for those deemed capable of some work related activity.
  • There will be a reduction in the taper rate from 65% to 63%. This means for every £1 you earn over your work allowance that is if you are eligible for one, your Universal Credit will be reduced by 63 pence instead of 65 pence as it currently stands.
  • 18-21 year olds claiming Universal Credit will have to participate in an intensive period of support at the start of their claim. After six months, if they are not working they will be expected to apply for an apprenticeship, traineeship, gain work place skills or go on a work placement. 

Employment and Support Allowance work-related activity group (WRAG)

  • New claimants of Employment and Support Allowance who are placed in the Work-Related Activity Group will receive the same rate of benefit as those claiming Jobseeker’s Allowance because the Work Related Activity component is being abolished. This does not affect people placed in the Support Group.

To find out more on Employment and Support Allowance work related activity group for the injured, click here

Bereavement Support Payment

  • The current system of bereavement benefits, including Bereavement Payment, Bereavement Allowance and Widowed Parent’s Allowance, will be replaced with a new single Bereavement Support Payment. This will be introduced for new claims from April 2017.
  • The benefit will focus support on the 12 month period immediately following the bereavement in a bid to cover the additional costs of bereavement. This is a big departure especially in terms of Widowed Parent's Allowance which is currently paid until your youngest child leaves education. 
  • Age will no longer be a factor in determining eligibility and National Insurance contribution conditions will be simplified in a bid to make entitlement easier to understand. In the current system, bereavement benefits are taken into account when calculating entitlement to means tested benefits and Bereavement Allowance and Widowed Parent's Allowance are both included within the Benefit Cap. Bereavement Support Payment on the other hand will not affect Universal Credit entitlement and will not be included within the Benefit Cap.

Child Tax Credit Changes

  • From April 2017 support provided through Child Tax Credit will be limited to 2 children, so that any subsequent children born on or after 6 April 2017 will not be eligible for further support. You can still receive a child element for more than 2 children if the children were born before 6 April 2017.
  • In addition to the 2 child limit, the ‘family element’ of £545 per year will be abolished. In effect, this will mean that families with at least one child born before April 2017 will continue to get the family element but claims where the eldest child is born on or after 6 April will not receive the family element.

Free Childcare

  • The current entitlement of 15 hours free childcare per week for 38 weeks a year for parents of all 3 and 4 year olds will be doubled in 2017. This is to allow an additional 15 hours free childcare per week for working parents who meet the following conditions. The parents must earn, on average, the weekly equivalent of 16 hours at the current.
  • In couples, both parents must be working and earning above the required amount. There is also a maximum earnings limit of £100,000 per year.
  • Because the condition is about average weekly earnings rather than hours, you don't actually need to be working 16 hours a week, you just need to earn 16 times the national minimum/living wage, which for over 25 year olds currently amounts to £115.20 a week. 
  • Parents who don't meet the conditions for the additional hours will still be entitled to the current 15 hours free childcare per week.

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