These pages give you information on forthcoming changes to welfare benefits.

Please note that information about some of these changes may be limited at present and also subject to further change. Although some will happen quickly, others may be introduced gradually over several years.

During 2017

Tax Free Childcare

Tax Free Childcare is to be introduced as a replacement for employer supported childcare.

The government will contribute up to 20% of the first £10,000 of registered childcare costs per child, per year. This equates to a maximum of £2,000 per child, per year (or up to £4,000 if your child is disabled)

The scheme will be available to people who have an annual income under £100,000 and are not receiving help with childcare via tax credits. It is expected to reach more people than the current scheme. 

Employment Support Allowance (ESA) Work-Related Activity component abolished

From 3 April 2017, new ESA claimants who are placed in the Work-Related Activity Group will receive the same rate of payment as those claiming Jobseeker's Allowance (JSA) and the equivalent in Universal Credit (UC).  

Benefit Cap exemption for Universal Credit claimants changing

From 1 April 2017 the earnings threshold that applies to the Benefit Cap exemption for UC claimants will be changed from a fixed amount of £430 per month to the amount claimants would earn if they (or one of them, if a couple) was working 16 hours per week at national minimum wage

The change means that for example, after April 2017 a working UC claimant aged over 25 in receipt of the housing element (who is not otherwise exempt from the Benefit Cap) would have to earn £520 instead of £430 per month to be exempt from the cap. 

The same change will be applied to the earnings threshold for the 9 months grace period but will not affect people who have already started a grace period.

ESA permitted work limit removed

From 3 April 2017, ESA claimants who undertake permitted work and earn between £20 and £120 per week will no longer have to give up their work or stop claiming ESA after 52 weeks.

ESA sanctions reduced

From 3 April 2017, ESA claimants who are sanctioned will continue to receive 80% of their payments, instead of the current 60%. This change does not apply to ESA claimants who continue to receive the work-related activity component after 3 April 2017; they will remain subject to the 60% rate. 

Bereavement Support Payment

The current bereavement benefits,  Bereavement Allowance, Bereavement Payment, and Widowed Parents Allowance will be replaced with the new Bereavement Support Payment (BSP). This will be introduced for new claims from April 2017. The Lump Sum Payment and monthly payment rates may be more generous than the previous system of benefits but you will only get a maximum 18 months payments.

Tax Credits and Universal Credit two child limit

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. 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 in the meantime.   

Tax Credit Family Element removed

People starting a family after April 2017 will no longer be eligible for the Family Element in tax credits. 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.

Universal Credit taper to be reduced from 65 per cent to 63 per cent

From April 2017 the taper rate that applies in Universal Credit will be reduced from 65 per cent to 63 per cent. This means that claimants will be able to keep 37p for every £1 earned in work above work allowances rather than 35p for every £1 earned.

Autumn /End of 2017

Free childcare extended

Free childcare entitlement will be doubled from 15 hours to 30 hours a week for working parents of 3 and 4 year olds from September 2017.

Change in Hardship Payments for mentally ill and homeless

The government proposed that hardship payments (of 60% of the benefit amount) be be automatically payable to jobseekers who are mentally ill or homeless when they are sanctioned. These claimants currently have to wait two weeks before they can 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 apply for hardship payments.

May 2018 onwards

Universal Credit Full Service expected to be introduced in Sunderland

This will be for people of working age that would otherwise be making new claims for Income Support, Income Based Job Seekers Allowance, Income Related Employment and Support, Tax Credits or Housing Benefit. At the same time the following changes are likely to be introduced for young people.

Universal Credit Youth Obligation

18-21 year olds who have been claiming Universal Credit for six months will have to either apply for training/ apprenticeships or attend a work placements, unless they are exempt (considered to be vulnerable). 

Universal Credit Housing Costs Element removed for young people

Single unemployed claimants aged under 22 will not have a Housing Costs Element included in their Universal Credit from April 2017 unless an exception applies.

If you would like futher information you might find the links below useful:

Benefit entitlement

Appealing a benefit decision

Making your money go further

Benefit changes timetable 2017-2018

Welfare benefit changes

Find your local benefits advice provider through the Community Hub.

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