Welfare reform started in the UK back in 2013. Numerous benefits have been abolished and replaced. Below is all you need to know on the new benefits system.
Universal Credit has replaced most existing benefits
Universal Credit (UC) has replaced most mean-tested benefits such as Income-based Jobseekers Allowance, Income-related Employment & Support Allowance (ESA), Housing Benefit, Income Support, Child Tax Credit and Working Tax Credit. UC will be paid to working people in place of the above means-tested benefits.
The Universal Credit pilot scheme started in Tameside, North of England in April 2013. The benefit was introduced to other parts of the UK for new claims in October 2013. All people who are already getting benefits must have been transferred to UC today.
Personal Independence Payment (PIP) has replaced Disability Living Allowance (DLA)
PIP has replaced DLA for individuals aged between 16 and 64 years. The benefit is for individuals with disability or long-term health conditions. Individuals who were getting DLA must make new claims to be transferred to PIP. PIP pilot schemes began in April 2013 in England before moving to other areas in the UK in June 2013. In October 2015, the DWP (Department for Work & Pensions) started contacting everyone who was still getting DLA to invite them to claim PIP. The benefit is fully active now.
Local schemes have replaced Council Tax Benefit
Before April 2013, UK citizens got Council Tax Benefits calculated using a standard national formula which was the same everywhere. Local authorities now run Council Tax Reduction Schemes fully. Although the elderly have been protected against cuts to the benefit, individuals who are under the recommended age for receiving Pension Credit are unlikely to receive the full rebate. Such individuals are required to pay some money towards their Council Tax bill.
Benefit cap changes
A limit has been placed on the total a person is supposed to receive from certain benefits if you are of working age. This cap affects individuals who have been getting housing benefit in the past. From April 2013, such individuals have been getting less money going towards offsetting their rent bill.
Benefit appeal rights changes
Benefit appeal rights have also changed. Going forward you are required to ask for a decision to be reviewed before appealing to a tribunal. This change affects Personal Independence Payment and Universal Credit.
New conditions for job searching
Since the introduction of Universal Credit, individuals who are unemployed or employed with a low income must sign new claimant commitments. The new claimant commitment highlights work-related requirements that must be met before a person gets their benefit.
If you happen to be working, you must get a job with better pay. Alternatively, you can work for more hours to boost your income. The new conditions apply to spouses too. The claimant commitment is also applicable to you if you receive a Jobseeker’s Allowance, income support, and employment & support allowance prior to transferring your claim to UC.
Social fund changes
Sections of the social fund have been abolished. Social fund changes began in April 2013. Individuals getting certain benefits may be eligible for a loan or payment from the social fund. This benefit can be used to fund one-off or unexpected expenses. Sections of the social fund have been abolished including Crisis Loans and Community Care Grants. Local authorities also have money now to use on replacement schemes or other things like local food banks and schemes offering subsidised goods.
Child benefit has seized for high earners
UK households with one parent earning £50,000 or more a year will receive less money as Child Benefit. This change has been in effect since 7th January 2013.
Has income from benefits lowered?
The welfare reform in the UK hasn’t lowered all income from benefits. Many people have received special protection. For instance, individuals are now protected against drops in income with Universal Credit. This protection is known as transitional protection. It is however reserved for individuals who weren’t getting Housing Benefit and Disability Living Allowance. For this reason, individuals getting such benefits have seen their income reduce as they transition to the new system.