Times are a-changin’

Gary Vaux summarises the annual round of changes in the benefits system that kicks in this month

In April, welfare rights advisers have to update factsheets, training materials, handbooks and so on in preparation for the annual round of social security changes. Here’s a summary of the main changes.

Tax credits: For people receiving working tax credit, the maximum child care element will rise from 70 per cent to 80 per cent of allowed expenditure. This means the maximum help available will increase to 140 a month for one child and 240 a month for two or more children. Previously, a tax credit claimant could have increases in income of up to 2,500 ignored in the tax year in which they were claiming. Now this “disregard” is 25,000. Last tax year, a person could earn up to 22,500 without being overpaid tax credit. Now they can earn up to 45,000 and their tax credit will still be right. It will not drop until the next financial year, when their new income is used to calculate the tax credit they are due.

Capital limits: The maximum savings that people under 60 can have while receiving income support and income-based jobseeker’s allowance has risen from 8,000 to 16,000. The point that “tariff income” kicks-in has also risen – from 3,000 to 6,000 – for the forementioned benefits and housing and council tax benefit too.

Hospital downrating: Benefits awarded to in-patients are no longer reduced after 52 weeks. The changes apply to contributory benefits, such as retirement pensions and incapacity benefit, as well as means-tested benefits, including income support and housing and council tax benefit. But disability living allowance and attendance allowance will still normally stop after four weeks in hospital, so some “premiums” paid within means-tested benefits will be lost when the disability benefit is lost.

Extension of benefits to young people: The upper limit for claiming child benefit, child tax credit (CTC) and the education maintenance allowance (EMA) has risen from the child’s 19th birthday (if they are still in non-advanced education) to their 20th. Child benefit and CTC will also be paid if the young person is aged 16 to 19 and in unwaged, work-based learning. People who start Entry to Employment courses from this month will attract child benefit and CTC, as well as the EMA instead of the 40 a week training allowance.

Housing benefit: The gross amount of any lump sum paid as a result of a person deferring their state pension (which first becomes payable this month) are now disregarded as capital indefinitely. All arrears of working tax credit and CTC will be ignored for 52 weeks.

Social Fund: The savings claimants can have before their Social Fund payment is reduced has increased from 500 to 1,000 (2,000 for over-sixties). The higher repayment rate for budgeting loans has been reduced from 25 per cent to 20 per cent and the standard repayment rate from 15 per cent to 12 per cent. Claimants have longer to repay budgeting and crisis loans. Finally, the combined total of budgeting loans and crisis loans that can be outstanding at any one time is now 1,500 compared with 1,000 before. The minimum sum awarded has risen from 30 to 100.

This column is dedicated to the memory of Martin Fitch, formerly of Sheffield Council and a former welfare rights adviser to the LGA, who died on Monday 20 March.

Gary Vaux is head of money advice, Hertfordshire Council. He is unable to answer queries by post or telephone. If you have a question to be answered please write to him c/o Community Care

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