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Welfare Reform - Universal Credit

There are a number of significant changes to the Benefits system which have been introduced since April 2013, the information provided below highlights the key changes.

Local Housing Allowance – Annual Increase

Housing Benefit claimants whose benefit entitlement is assessed subject to Local Housing Allowance (LHA) rules will no longer have their entitlement reviewed on the anniversary of their claim.

From April 2013 all LHA claims will no longer have an anniversary date which may vary dependant on when housing benefit was initially claimed. Instead the LHA rate for all claims will be reviewed on the 1 April each year or the first Monday following this date, if rent is charged weekly.

Instead of being linked to local rent levels from April 2013 the LHA rates will be increased by the inflation amount of the Consumer Price Index (CPI) and it is expected that next April's LHA rates will be published by the Rent Service in December 2012.

From April 2013 if the rent charged is less than the LHA rate and the rent is increased, we will be able to apply this increase up to the LHA rate. If the rent is already above the LHA rate and is increased, we will not be able to apply the change until the LHA rate increases above the new rent charged.

Under Occupation

Under occupation, also known as 'Bedroom Tax' is being introduced in the social rented sector, on 1st April 2013.

Working age, council and housing association tenants receiving housing benefit may have their housing benefit reduced if they are deemed to be under occupying the property.

One bedroom will be set for each of the following:

Those that are considered to be under-occupying their accommodation will see a reduction in their housing benefit calculated by a reduction of:

Any tenants who will have their housing benefit reduced will have to make up any shortfall of rent to their landlord.

The example below shows how the restriction would apply from April 2013:

Mrs Study lives on her own in a 3 bedroom council property in Llay. Her rent is £72.37 per week. She has 2 under occupied bedrooms.

Weekly Income March 2013

Weekly Income April 2013

Rent has been restricted by 25% due to the under occupation of the property.

Mrs Study will need to pay the shortfall of £18.10 per week that has been deducted from her housing benefit due to under occupying her property.

Benefit Cap

From April 2013 a cap will be introduced on the total amount of benefit that working age people can receive. This will mean that workless households should no longer receive more in benefits than the average earnings of working households.

The levels of the Benefit Cap are as follows:

In the first instance the cap will be administered jointly by DWP and local authorities through deductions from Housing Benefit payments. In the longer term it will form part of the new Universal Credit system.

Implementation of the Benefit Cap will start in April in 4 authorities in London – Bromley, Croydon, Enfield & Haringey. It will then follow in a phased rollout, however the implementation should be completed by the end of September 2013.

The income taken into account when calculating the benefit cap, includes:

Customers receiving the following benefits will be exempt from any benefit cap:

Some examples showing how the cap will affect customers are shown below:

Mr & Mrs Bloggs live in a council house with 4 children. Rent is £73.13 per week. The household income is as follows.

Weekly Income – March 2013

Weekly Income - April 2013

The benefit cap has reduced Mr & Mrs Bloggs entitlement to Housing Benefit.

Mrs Joe lives in a council property with her 8 children, 2 of the children are over 18 and classed as non dependants. Her rent is £89.81 per week. Her income is as follows:

Weekly Income – March 2013

Weekly Income - April 2013

The benefit cap changes have reduced Mrs Joe's Housing Benefit, but her other income remains the same. Mrs Joe's income is over the £500 cap, initially the cap will reduce Housing Benefit to the minimum award of 50p per week.

Further information about the Benefit Cap can be obtained from the DWP website (external link).

Council Tax Benefit Replacement

Council Tax Benefit is a government benefit which is currently paid to many low income households to help them meet the cost of their council tax bills. It is the most widely claimed benefit in the UK. Council Tax Benefit helps those people on a low income to pay their council tax. Currently the UK Government gives the Council all of the money needed to fund CTB paid to Wrexham County Borough Council. This will change from April 2013.

The UK Government sets the rules regarding eligibility for Council Tax Benefit. If a claimant qualifies for help they will receive a contribution towards their Council Tax bill. This contribution is not paid directly to the resident, instead it is paid directly to their Council Tax account which reduces the amount of Council Tax payable.

Wrexham CBC has around 14,000 households who currently receive CTB, of these households getting assistance over 8,700 do not have to pay any Council Tax as they receive 100% Council Tax Benefit.

What are the changes to Council Tax Benefit?

In the UK Government's spending review in 2010 it announced a new approach to the provision of financial help to Council Tax payers. Council Tax Benefit in its current form is to be abolished from 31 March 2013.

From April 2013 responsibility to provide a scheme has been devolved to the Welsh Government. The Welsh Government proposes to introduce a national scheme for all Welsh councils to operate with a small number of limited discretions; the new scheme will be known as the Council Tax Reduction Scheme.

Funding restrictions have also been announced to take effect when the Council Tax Reduction Scheme is introduced.

The UK Government will not however fund Council Tax reductions in the same way, instead it has decided that it will provide only up to 90% of the funding which it currently provides for Council Tax Benefit. The council cannot provide resources nor will it be able to under the Regulations to make up for this cut in funding so all those currently receiving Council Tax Benefit will receive less help to meet the cost of their Council Tax under the Council Tax reduction scheme.

Personal Independence Payment

From 8 April 2013 the Government is introducing a new benefit called Personal Independence Payment (PIP) to replace disability living allowance (DLA) for eligible working people aged 16 to 64.

This means that Disability Living Allowance will end for everyone of working age even if they have an indefinite period award. The definition of working age is everyone aged 16 to 64 on the day Personal Independence Payment is introduced.

There are currently no plans to replace DLA for children under 16 and people aged 65 or over who already receive DLA.

Personal Independence Payment is based on an assessment of individual need. The new assessment focuses on an individual's ability to carry out a range of key activities necessary to everyday life. Information will be gathered from the individual as well as healthcare and other professionals who work with and support them. Most people will also be asked to a face to face consultation with a trained independent assessor as part of the claim process.

Personal Independence Payment will be introduced in April 2013 for new claims in Merseyside, North West England, Cumbria, Cheshire and North East England. During this period new claimants in all other parts of the country will continue to claim Disability Living Allowance.

June 2013 – New claims for Personal Independence Payment will be taken from all parts of the country.

Existing Disability Living Allowance claimants aged 16 to 64 will be affected by the introduction of Personal Independence Payment, even if they have an indefinite or lifetime award of DLA.

Personal Independence Payment is being introduced in stages over a number of years

Further information about Personal Independence Payment, can be viewed on the DWP website (external link).

Discretionary Assistance Fund for Wales

The Discretionary Assistance Fund offers payments, or in kind support, to people needing urgent assistance and where there is an identified need to safeguard health and well being.

Payments will be made available to people who have no other means of meeting the immediate cost of living.  They are not intended to meet the cost of ongoing expenses.

Within the scheme there are two types of non-repayable grant support:

How to apply

The fund opened for applications on 1 April 2013.
To find out if you are eligible for support please read the eligibility criteria below:
Discretionary Assistance Fund - Eligibility Criteria
You can apply to the fund by:

Discretionary Assistance Fund
PO Box 2377
LL11 0LG

Universal Credit

The Government’s Department of Work and Pensions (DWP) has now started the process of rolling out Universal Credit in stages across the United Kingdom.

The introduction of Universal Credit marks the biggest change to the welfare system since the 1940’s, and will see a range of previously separate benefits replaced with one single monthly payment.

In Wrexham County Borough, Universal Credit currently only affects single jobseekers who have made a claim for benefits after 16th March 2015.

No other benefit claimants (including single jobseekers who made their claim prior to 16th March) will be switched to Universal Credit at this current stage.

To qualify for Universal Credit, new, single jobseeker claimants must also meet all of the following criteria:

Providing they meet these criteria, new claimants who would have been entitled to any of the six following benefits, will now be able to claim Universal Credit instead:

The switch to Universal Credit means that these benefits, which would previously have been paid out separately, will now be replaced by one lump sum, to be paid out on a monthly basis.

Housing Benefit will be part of this lump sum, and tenants will need to be aware that this will now be paid directly to them, rather than to their landlord. It will be the responsibility of the tenant to ensure their rent is paid to the landlord each month.

You can find help and advice on the different ways to pay rent in our tenants section:

Jobseekers eligible for the scheme will be directed to apply for Universal Credit when they visit the jobcentre. It is expected that the majority of claims for Universal Credit will be made online. Claimants without access to the internet will be directed to local facilities where web access is available, e.g. libraries and community centres.

Wrexham’s Housing Department are aware that the changes will present a series of challenges, and will therefore be working closely with their tenants to ensure they are well supported throughout the process.

Information & Advice