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

Child Tax Credit changes

From 6 April 2017 support provided through Child Tax Credit will be limited for some new births - if you already have 2 or more children 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. Read more about this change, including the exclusions that apply, in our two child exemptions guide.

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 6 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.

Employment and Support Allowance work-related activity group

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.

Universal Credit changes

From 6 April 2017 Universal Credit will be limited for some new births - if you are already claiming Universal Credit and have 2 children there will be 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, including people in UC full service areas.

If your eldest child is born on or after 6 April 2017 you will not be eligible for the ‘first child premium’ in Universal Credit - 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.

There will be a reduction in the taper rate to 63% from 10 April. This means for every £1 you earn over your work allowance (if you are eligible for one) your Universal Credit will be reduced by 63 pence instead of 65 pence as it currently stands. The entitledto benefits calculator shows you your entitlement using the current and the new taper rate so you can see how this change will affect you when it is introduced.

From 1 April 2017 the exemption from the benefit cap for being in work will change so you will be exempt if your weekly earnings are equal to or greater than the equivalent of 16 times your National Minimum/Living Wage rate, rather than a flat rate of £430 per month/£100 per week. When calculating the level of the earnings exemption threshold the amount is rounded down to the nearest whole pound so the required earnings from 1 April 2017 to exempt you from the benefit cap are as follows:

• 25 years and older £120 per week
• 21 to 24 years old £112 per week
• 18 to 20 years old £89 per week

Parents, including lone parents, will be expected to have work focused interviews when their youngest child turns 1, then start work preparation when their youngest child turns 2, all leading up 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 the Employment and Support Allowance work-related activity component, reducing support for those deemed capable of some work related activity.

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. 

There will also no longer be automatic entitlement to the housing element of Universal Credit for 18-21 year olds who are unemployed and living in UC full service area. Though there will be various exceptions for parents, vulnerable groups and people who could previously afford their rent without assistance. See the full list of exceptions on gov.uk.

Universal Credit Northern Ireland

Agreement has been reached for the roll out plan for Universal Credit in Northern Ireland. Universal Credit will be introduced for new claims, on a phased geographical basis from 25 September 2017 until September 2018.

Housing Benefit 

From 6 April 2017 the child addition which forms part of the Housing Benefit calculation will be limited for some new births - if you already have 2 or more children you will not be entitled to a child addition for any subsequent children born on or after 6 April 2017 when calculating your Housing Benefit. Existing claimants can still receive a child addition for more than 2 children if the children were born before 6 April 2017. New claimants can still receive a child addition for more than 2 children if the children were born before 6 April 2017 and you have a Child Tax Credit (CTC) notice to show your local authority.

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.

This simplified system 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 benefit entitlement and will not be included within the Benefit Cap.

Other changes

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 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 national minimum/living wage rate. 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 will amount to £120 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.

Free TV licence - over 75 year olds

There will be a change in the way the free TV licence for those 75 or over is funded, with the cost being passed by the government to the BBC. This amounted to £608 million in 2013/2014 and the BBC will need to include it in their own budget from 2017/2018.

Market rents for social housing 'pay to stay'

On 21 November 2016 the Government announced that the mandatory pay to stay scheme would not be introduced. Councils and housing associations will retain discretion over whether or not to implement higher rents for tenants with higher incomes.

The scheme would have meant that social housing tenants who live in London and have an income of £40,000 or more, would see their rent increased to a market or near market rate. Those outside London, would have been affected if their income is £30,000 or more. The introduction of this policy was originally going to be voluntary for Housing Associations but compulsory for Councils.