Budget Update November 2017November 23, 2017 –
Don’t worry, benefits fans, we’ve ploughed through the announcements about benefits in yesterday’s budget so you don’t have to. Here’s a summary of the details behind the headlines:
(UPDATES have been added below with additional information announced by the Secretary on 23 November).
Removal of Universal Credit seven day waiting period
From February 2018 the government will remove the seven-day waiting period so that entitlement to Universal Credit will start on the first day of application.
The current seven-day wait has been in place since Osborne changed it from three days in the Summer of 2013.
Advance payments available within five days
From January 2018 anyone who is entitled to Universal Credit will be able to access up to a month’s worth of their estimated Universal Credit within five days via an interest-free advance. Until yesterday’s announcement, the maximum advance was for half of the estimated Universal Credit payment.
The government will also extend the amount of time the advance can be repaid from six months to twelve months if people need a little longer to pay back their loan.
As it doesn’t kick in until the new year anyone making a new claim in December will be able to receive an advance of 50% of their monthly entitlement at the beginning of their claim and a second advance to take it up to 100% in the new year, before their first payment date.
Some claimants have already been able to repay over 12 months (if they are transferring from another benefit to Universal Credit) or in exceptional circumstances ask for a delay in repayments for up to three months but these changes will even out the process for all claimants.
UPDATE - From Spring 2018 it will be possible for people to apply for an advance online.
Delay in the rollout schedule
Unsurprisingly this one didn’t make it into the Chancellor’s speech but the red book explains there will be a more gradual rollout of Universal Credit between February 2018 and April 2018 and it will be complete in all job centres by December 2018 instead of the planned end of September 2018.
UPDATE - A revised transition schedule has been published which shows a reduction in jobcentres being rolled out for three months from February 2018 to 10 jobcentres a month (was 50), so you can check if your jobcentre date has moved. However, please do note, this does not always mean all postcodes in a JCP area are due to roll out at the same time. The schedules are sometimes superseded by commencement orders so these are the best place to check for the latest dates.
Taper rate unchanged but further reductions not ruled out
There were no changes to the taper rate this time around, so it remains at the rate of 63p introduced in the Autumn Statement last year. However, the government did say yesterday that the taper rate will be kept under review and they will continue to consider the case for further changes, so watch this space!
Two weeks extra payment for housing benefit recipients
From April 2018 those already on Housing Benefit will continue to receive their award for the first two weeks of their Universal Credit claim.
This will hopefully make it easier for anyone migrating over to Universal Credit to pay their rent during the now five-week wait and help to limit rent arrears.
UPDATE - The government has added the two weeks extra rent will be an unrecoverable automatic payment that will be available to 2.3 million people. The advance is intended to be additional support and will not reduce what people are entitled to under Universal Credit.
Some Local Housing Allowance rates to be increased
To support Housing Benefit and Universal Credit claimants living in areas where private rents have been rising fastest, the government will increase some Local Housing Allowance rates. Details have not yet been released on which areas this will apply to but they say it will increase the housing benefit awards of approximately 140,000 claimants in 2018-19, by an average of £280, in areas where affordability pressures are greatest.
This goes alongside the LHA change we already knew about; that it won’t be introduced to the social rented sector, a measure that was previously scheduled to start in April 2019.
Easier to make rent payments direct to landlords
Another one with more details to come but they announced it will be easier for claimants to have the housing element of their award paid directly to their landlord. A good move for people (or landlords) worried about getting behind with their rent.
UPDATE - Next month, new guidance will be issued to ensure that claimants in the private rented sector who have their housing benefit paid directly to landlords are offered that option when they join Universal Credit.
UPDATE - Three child families remain on legacy benefits until Feb 2019
Currently, any new claim for Universal Credit from a family with three or more children was being routed back to tax credits until November 2018. With the extension to the roll-out plan that will now shift to the end of January 2019.
UPDATE – Live service claims to stop at the end of December 2017
Currently, no matter where they live, most single unemployed people without children making a new benefit claim are asked to claim Universal Credit instead of legacy benefits. This will stop happening on 31 December 2017 as the live service is being closed to new claims.
This means that, during 2018, until an area becomes full service, single unemployed people without children will be reverted back to legacy benefits. Existing live service claimants will not be affected until their area moves to full service.
We hope you found this a useful summary. Where needed, all our tools will be updated to factor in the changes and if we find more detail on any of the announcements we’ll post them on our social media channels, so please do follow us on Twitter, Facebook and LinkedIn.