Understanding welfare reform changes
Find out how changes to council tax benefit, housing benefit, universal credit and more might affect you from April 2013.
www.lichfielddc.gov.uk/welfarechanges
From April 2013 the government is making big changes to housing benefits. Council tax benefit is also being replaced by a new scheme. Find out more ... In 2013 the government is making big changes to housing benefit, introducing a new benefits cap, and launching universal credit that will see people on a range of benefits getting a single payment once a month. The government has also asked us to introduce a new local council tax support scheme to replace council tax benefit. Under these new changes, people’s housing benefit may go down, and lots of working age people will have to pay something towards their council tax, even if they have never paid anything before. The government is also making changes to pension credit, local housing allowance and introducing a new personal independence payment for disabled people.
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This booklet explains the following changes: Local council tax support scheme Pages 3 - 7 Housing benefit changes Pages 8 - 10 Benefits cap Page 11 Universal credit Pages 12 - 13 Local housing allowance, pension credit and personal independence payments Pages 14 - 15
www.lichfielddc.gov.uk/welfarechanges
You might have to pay something towards your council tax from April 2013
Did you know? The new council tax support scheme changes won't affect pensioners or anyone who receives a war pension.
From 1 April 2013, lots of working age people who have never had to pay council tax before, might have to pay something. Why? The government has abolished the national council tax benefit scheme. In its place it asked us to design a local council tax support scheme that comes into force on 1 April 2013. We wrote to everyone who claimed council tax benefit last year, and took their feedback into account when designing our new scheme. Under the new scheme most working age people will have to pay something towards their council tax, even if they never have before.
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The government has told us our new council tax support scheme must protect pensioners and vulnerable people. It must also encourage people into work. Our new scheme Our new scheme differs from the current scheme in the following ways.
1. Most working age people will have to pay something towards their council tax bill
We will still calculate their entitlement to council tax support based on 100% of their council tax bill. If you are disabled, but don't claim a severe disability premium, this change may affect you. * What is a severe disability premium?
From April 2013 most working age who previously claimed council tax benefit, will have to pay the first 20%, or more, of their council tax bill. The amount of council tax support they then get, will be calculated based on their income.
2. Pensioners, severely disabled, war pensioners and some young families won’t be affected by the new scheme The changes won't affect pensioners, disabled people who qualify for a severe disability premium*, people with children under 5, and people who receive a war widow’s or widower’s/ war disablement pension. 4
People have a severe disability premium if they get disability living allowance, receive a middle or higher rate care component, live alone and no one receives a carer's allowance for looking after them. Couples can also have a severe disability premium if they both receive a middle or higher rate care component, live alone as a couple and no one receives a carer's allowance for looking after either of them.
www.lichfielddc.gov.uk/welfarechanges
3. Working age people living in more expensive homes will have to pay more towards their council tax bill
Did you know?
Working age people living in a more expensive home (council tax bands E, F, G or H) will have to pay the difference between their council tax band and the amount someone living in an average home (a band D property) pays, before their council tax support is calculated. This is on top of paying the first 20% of their council tax bill (see point 1 on page 4).
You will find out what you will have to pay towards your council tax in your annual bill. This was sent to your home in March.
What is a council tax band? Every home in the district is placed in a council tax band that is based on its value. The council tax band determines how much the council tax bill for each home will be. The cheapest council tax band is A and the most expensive council tax band is H. An average house is in a band D. To find out what band your house is in , look at your council tax bill, or visit www.lichfielddc.gov.uk/bandchecker and enter your postcode, or call 01543 308900.
4. We are stopping the second adult rebate for working age people Under the previous scheme, if you lived in a home with an adult on a low income, even if you were not personally entitled to council tax benefit, you would have been entitled to up to 25% off your council tax bill. We are stopping this second adult rebate, so from 1 April 2013, anyone who currently claims it may have to pay 100% of their council tax bill. Please note The second adult rebate will still apply to pensioners. The second adult rebate is not the same as the single persons discount, which has not been stopped - see page 7.
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5. We will view child benefit as income when we calculate a claim At the moment we don’t take child benefit into account when we work out someone's income. From 1 April 2013, we will count child benefit as income, which will mean some people will receive less council tax support as a result.
7. We will help to make working claimants better off When assessing council tax support, we don’t take all of a working person’s earnings into account. Under the national scheme, this was £5 for single claimants a week, £10 for couples a week, and £25 for lone parents a week. To make things fairer, from 1 April 2013, we are introducing a flat rate of £25 a week for all types of household.
6. Most people with over 8. All adults living in a £6,000 capital will not be able household will be expected to get council tax support contribute to the household From 1 April 2013 we are lowering the amount of capital working age* people can have from £16,000 down to £6,000. So, if you have more than £6,000, you will not be entitled to council tax support, and may have to pay 100% of your council tax bill. *This change will not apply to people on income support, employment and support allowance (income related), jobseekers allowance (income based) or pension credit (guarantee). This change will also not affect pensioners. Please note Capital means all the money you have in bank accounts, building society accounts, shares etc, but not your home. 6
When we calculate council tax support we will take into account the adults that live with you. If you have nondependent adults living with you, for example adult children or parents, it’s likely we will expect them to make a contribution to the household, and we’ll reduce the support you get as a result. From 1 April 2013, if the non-dependent adult living with you doesn’t work we’ll reduce the amount of support you get by £5 a week, or if he/she is working, we’ll reduce it by £10 a week. Please note: You won’t be affected by this change if you currently don’t have a deduction from your benefits as a result of a non-dependent adult living with you.
www.lichfielddc.gov.uk/welfarechanges
To read some case studies showing how the changes might affect local people, visit www.lichfielddc.gov.uk/ supportexamples There are a number of things that will not change under the new council tax discount scheme. These are: Pensioners will not be affected The way we calculate pensioners' council tax benefit will not change. Pensioners will continue to be assessed under a national scheme that the government has said will be much the same as the current scheme.
Child maintenance will not be considered income Currently child maintenance payments are not included as income when calculating a claim. This won't change.
Single person discount and exemptions for people with severe mental impairment These will not be affected by the changes.
What to do now? If you currently receive council tax benefit, please make sure the information we hold about you is correct. This will help us to make sure you don't have to pay more council tax than you need to from 1 April 2013. In particular, please let us know if: you have children and have not told us about them. • you receive a severe disability premium in any benefit you get. •
If you are unsure what information we hold about you, please email benefits@lichfielddc.gov.uk or call the team on 01543 308900.
Questions? What you have to pay towards your council tax this year is detailed in your annual council tax bill, which was sent to your home in early March 2013. If you have any questions, please email benefits@lichfielddc.gov.uk or call the team on 01543 308900. Contact Citizens Advice Bureau for help and support Call 08444 111 444. Lines are open Monday - Friday, 9.30am - 4.30pm.
www.lichfielddc.gov.uk/welfarechanges
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Did you know? These changes to housing benefit will not apply to you if you live in a private rented home. Pensioners will also not be affected by the changes.
Do you have too many bedrooms? Will your housing benefit go down? The government is cutting the amount of housing benefit working age people, who live in a council or housing association property, will get if they have more bedrooms than their family needs. This is referred to as the ‘bedroom tax’ and the change will come into effect on 1 April 2013.
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We will not make the decision on how many bedrooms there are in your home. This will be the responsibility of your landlord, who will be asked to accurately describe your property, in line with the rent charged. We will not be able to change this decision.
1. How many bedrooms am I entitled to?
2. Some worked examples
If you are of working age, live in a council or housing association home, and claim housing benefits, under the new rules that come into effect on 1 April 2013 you will be entitled to housing benefit to cover one bedroom for:
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every adult couple (married or unmarried).
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any other adult aged 16 or over.
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any two children of the same sex aged under 16.
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any two children aged under 10.
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a carer (or team of carers) who provide overnight care
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any other child*
A couple or single person: with no children will need one bedroom. • with one child will need two bedrooms. • with a boy and girl aged under 10 will need two bedrooms. • with a boy and girl aged 11 and 15 will need three bedrooms. • with two children of the same sex aged 11 and 15 will need two bedrooms. • with two children of the same sex aged 13 and 16 will need three bedrooms.
3. What if I have too many bedrooms? From 1 April 2013: if you have one bedroom too many, your housing benefit will be cut by the equivalent of 14% of your rent. • if you have two, or more bedrooms too many, your housing benefit will be cut by the equivalent of 25% of your rent. •
*If you foster a child, or look after a child whose main home is elsewhere, the child will not be included when assessing the number of bedrooms you require.
Please note if you only get partial housing benefit, and you have one bedroom too many (for example), you could lose all your housing benefit if the amount of benefit you get is currently less than 14% of the rent you pay.
www.lichfielddc.gov.uk/welfarechanges
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The exact amount your benefit will reduce by will depend on the amount of rent you pay your housing association. 4. What if I have a bedroom for a carer?
What to do now?
If you have an extra bedroom for an overnight carer, your benefit may not be cut as a result of your carer's bedroom.
Make sure we hold the right information about the number of people living in your home This may affect the number of bedrooms you are entitled to. Our team can also explain the changes in detail. Contact our team on 01543 308900 or email benefits@lichfielddc.gov.uk
If you have a extra bedroom that is only used by carers during the day, or for medical purposes, you will not be entitled to housing benefit for this bedroom.
5. What if I am recently bereaved? There are exceptions for people who have too many bedrooms because of a recent bereavement.
6. What if I am pregnant? If you are pregnant and have an empty bedroom ready for your unborn child, your benefit will be reduced until your child is born. 10
Contact your housing association to discuss your options If you are affected by the change, we recommend you talk to your housing association about the changes and your possible options. Speak to the Citizens Advice Bureau for help and support The Citizens Advice Bureau may be able to provide you with help, support and information on your options, budgeting, financial support and more. Call the Staffordshire advice line on 08444 111 444. Lines are open Monday - Friday, 9.30am - 4.30pm.
www.lichfielddc.gov.uk/welfarechanges
The government is introducing a benefits cap In late 2013, a limit on the amount of benefits a single person or family can get is set to be introduced. The maximum financial support/benefits people will be able to claim is £500 a week for a family, and £350 a week for a single person.
Did you know? We’re still waiting to hear from the government when the benefits cap will be introduced in Lichfield District.
If you get more than this at the moment, your housing benefit will be reduced and you may have to pay more towards your rent, or find cheaper housing. The benefit cap does not apply where any household member receives: Disability living allowance Personal independence payments Attendance allowance The support part of employment and support allowance • Working tax credit • War widows/widowers pensions • • • •
As soon as we know when the changes will be introduced, we’ll update www.lichfielddc.gov.uk/ welfarechanges. For more background information about the changes visit www.dwp.gov.uk/gov
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Did you know? If you already get benefits, the Department for Work & Pensions will contact you to tell you when you are moving to universal credit.
One monthly payment of universal credit from October 2013 From as early as October 2013 the following benefits will be replaced with a single benefit, called universal credit: income support income based jobseekers allowance income related employment and support allowance • housing benefit • tax credits • • •
When you claim universal credit : you will be paid monthly in arrears into your bank account, like a wage. • you’ll need to make arrangements to pay your rent and housing bills out of your universal credit payment. •
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1. I already claim benefits when will I move across to universal credit? If you already claim the benefits listed on page 12, the Department of Work and Pensions will contact you directly to tell you about the changes and when they will affect you. It is expected that it will take up to 2017 to move everyone across to universal credit.
2. When will I move to universal credit if I submit a new claim for benefits? The government hasn’t yet published information about when the changes will affect new claimants. We’ll update www.lichfielddc.gov.uk/ welfarechanges as soon as we find out more from the government. You can also visit the Department of Work & Pensions website to find out more www.dwp.gov.uk/gov
Things to start thinking about If you are a tenant, you will need to think about how you are going to budget and also make arrangements to pay your weekly or monthly rent from your universal credit payment. You'll need to make sure you have a bank account for your universal credit to be paid into, and for your bills to be paid out of. You'll need to set up arrangements to pay your bills out of your bank account, including your rent. The Citizens Advice Bureau may be able to provide you with help, support and information. Call the Staffordshire advice line on 08444 111 444. Lines are open Monday - Friday, 9.30am 4.30pm.
Find out more Find out more about the plans for universal credit on www.dwp.gov.uk/ gov The website includes a handy frequently asked questions sheet.
www.lichfielddc.gov.uk/welfarechanges
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Did you know?
Other changes
Local housing allowance Local housing allowance for payments, for private tenants people living in private rented The way local housing allowance rates are worked out has changed. The change means most local homes, is housing allowance rates will not increase as much unlikely to year on year, as they have done in the past. increase each Local housing allowance rates are no longer year as it has reviewed by the government throughout the year. New rates are now published once a year in April. in the past. Payments Visit www.lichfielddc.gov.uk/lha to read the most could even go up to date local housing allowance rates and to find out more. down.
Pension credit changes From as early as October 2014, if you are a pensioner and claim housing benefit, it could be paid as a housing credit, as part of your pension credit. The change is unlikely to affect the amount you receive, but it does mean you’ll claim support for your housing costs from the Pensions Service, rather than your local council.
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You’ll receive a letter to tell you more about the change, or you can visit www.dwp.gov.uk/gov
Personal independence payments (PIP) From 8 April 2013 the government is introducing a new benefit called personal independence payment (PIP) to replace disability living allowance (DLA). To find out more visit www.dwp.gov.uk/pip To get PIP you must: • be between 16 and 64 years of age. • be able to satisfy the daily living/ mobility tests for three months prior to claiming. • be likely to satisfy the daily living/ mobility tests for at least nine months after claiming.
How much PIP will I get? The payment you receive will be made up of: A daily living element • Standard rate - if you have a limited ability to carry out daily living. • Enhanced rate - if you have a severely limited ability to carry out daily living activities. Mobility element • Standard rate - if you have a limited ability to carry out mobility activities. • Enhanced rate - if you have a severely limited ability to carry out mobility activities.
People who are terminally ill, and where life expectancy is less than six months, will not have to satisfy the period condition for the mobility element.
How will PIP be assessed? PIP will be assessed on a points basis. Visit www.dwp.gov.uk/pip for details.
When will PIP be introduced? Personal independence payments will be introduced in four stages: April 2013 The government is running a pilot in Merseyside, north west England, Cumbria, Cheshire and north east England. From June 2013 If you submit a new claim for disability support, you will be asked to submit a claim for a personal independence payment. From October 2013 If you currently claim disability living allowance and report a change in your health condition or disability, the Department of Work & Pensions will invite you to submit a claim for a personal independence payment. From 2015 The Department of Work & Pensions will write to everyone else receiving disability living allowance (unless you report a change, or your award is due to end before 2015) to invite them to submit a claim for a personal independence payment.
www.lichfielddc.gov.uk/welfarechanges
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It’s vital you pay your rent
If you have problems paying your rent, speak to your landlord as soon as you can. If you are evicted because you don’t pay your rent, it is likely you will be classed as intentionally homeless and the council will not have to provide you with new permanent accommodation.
This leaflet covers the major changes to national benefits from April 2013, as a result of the Welfare Reform Act. There are other changes planned to tax credits, child benefits, council tax exemption, and the employment and support allowance for young people. To find out more, visit www.dwp.gov.uk/gov If you have any questions about the changes to council tax benefit, or about the bedroom tax, please email benefits@lichfielddc.gov.uk or call 01543 308900, Monday - Friday, 8.45am - 5pm.
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Help and support Department for Work & Pensions www.dwp.gov.uk/gov Jobcentre plus www.jobseekers.direct.gov.uk Speak to the Citizens Advice Bureau The Citizens Advice Bureau may be able to provide you with help, support and information. Call the Staffordshire advice line on 08444 111 444. Lines are open Monday - Friday, 9.30am - 4.30pm. For impartial local money advice visit www.lichfielddc.gov.uk/ manageyourmoney For local housing advice visit www.lichfielddc.gov.uk/housingoptions
If you would like this document in large print or another format please call our team on 01543 308900
www.lichfielddc.gov.ukwelfarechanges