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Benefit changes in 2013

These benefit changes affect working age people. If you were born before 5th October 1951 then you are counted as pension age and are not affected by these changes. For more information see what counts as pension age.

Under occupation

From April 1, no matter where you live in the country, if you rent from your council or from a Housing Association, your Housing Benefit will be cut if you have a ‘spare’ bedroom. The Government works out how many rooms you need depending on how many people live with you and compares this to how many bedrooms you have in your home. If you have more rooms than the Government thinks you need, your Housing Benefit will be cut by 14% of your rent if you have one spare room or 25% if you have two or more.

According to the Government, you are allowed one room each for the following people in your household:

  • Each single adult
  • Each adult couple
  • Each child aged 16 or over
  • Two girls or two boys under the age of 16
  • Two children of either gender under the age of ten
  • A carer who stays overnight

This is an area that has captured significant media attention, with the popular press dubbing this change "the bedroom tax".

Benefits cap

Starting from April in four London authorities, for people who receive Housing Benefit, and later Universal Credit, the benefits cap will start to be phased in. By the end of the September 2013, every part of Great Britain will be affected. The cap sets a limit on how much one household can receive in certain benefits. A single person can receive up to £350 per week and a couple or a lone parent can receive up to £500. Any amount over this will be stopped from their Housing Benefit or Universal Credit.

Most people affected will either live in an area with high rents or will have large families. Some people are exempt from the cap, such as those who are in work or who receive certain disability benefits. For more information see our guide to the benefits cap.

Council Tax Benefit

From April 1 Council Tax Benefit as it existed in Great Britain ended. It has been replaced by new schemes decided by the local council in your area or by the Scottish Parliament or Welsh Assembly if you live outside England. The amount of local support available varies considerably in different parts of the country. However, as all councils are receiving less money from the Government to fund these schemes, many people will receive less help as a result. For more information on how the new system works see our guide to Council Tax Benefit changes.

Universal Credit

The biggest changes to the benefits system will start in October 2013, when Universal Credit is due to start across Great Britain (some people will already be affected if they live in pilot areas). The introduction of Universal Credit replaces a series of benefits which will gradually be abolished. These benefits include:

  • Income Support
  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Housing Benefit
  • Child Tax Credit
  • Working Tax Credit

As the transition starts, new claims for any of these benefits will become claims for Universal Credit. People already receiving one these benefits will start to move across to the new system from 2014. This will not happen all at once, but the Government hopes that no-one will be receiving any of these benefits by 2017. All people receiving Universal Credit will have to fulfil certain conditions in order to receive the benefit. These conditions are usually to do with work, work-seeking or being unable to work.

To find out more on who is affected and when, who can receive transitional protection and what conditions you may have to meet, see our Universal Credit factsheet.

Personal Independence Payments

From June 2013 Great Britain, new claims to Disability Living Allowance (DLA) will become new claims for Personal Independence Payments (PIP). From October 2013 renewal claims for people receiving DLA for a fixed period will be for PIP and from 2015 existing claimants of DLA will start to be transferred onto PIP. People aged below 16 or over 64 will not be affected by these changes and will continue to receive DLA.

Personal Independence Payments can consist of two parts – a daily living element and a mobility element and each one can be at the standard rate or the enhanced rate if extra assistance is needed. Most people will have a face to face consultation with a health professional to assess their needs as part of their claim. The person’s circumstances are compared with a set of criteria to determine if they are entitled to help. Successful claims will then be reviewed at intervals depending on how likely it is that the person’s circumstances will change.

For more information see our guide to Personal Independence Payments.

Keep up to date

Almost every day the Government or one of the key agencies involved alter the Welfare Reform policies. They call it "bedding down". We call it confusing!

However, as changes arrive we will continue to make that information available to our subscribers, and to let people understand how the changes impact their personal finances, by building them into our calculators. 

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These are the largest changes that the benefits system has seen for decades.

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  • Understand what the changes are.
  • Understand how they will impact on your personal finances, housing and other benefits.
  • Understand when the changes will come about; and
  • Understand what you can do if the changes negatively impact you.

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