Changes to benefits for people of working age (including unemployment, in work, sickness benefits, bereavement benefits and the benefit cap)

The benefit cap
Introduction of Universal Credit
Benefits relating to ill health
Benefits relating to Jobseekers
Work related requirements
Working Tax Credits - for those in work
Bereavement benefits

The benefit cap

The government limits the total household benefits that working age families can receive. This is called the benefit cap. It only applies to certain benefits and some people are exempt.

Support for those capped in Newcastle

Newcastle City Council and Your Homes Newcastle (YHN) are targeting support to households to help them to increase their income or reduce their expenditure, including advice on exemptions, benefit entitlement, budgeting, debt, employment and housing, as follows:

YHN tenants can get support from the Financial Inclusion or Support and Progression team by filling in the referral form on the Money Advice page on YHN’s website, by phoning 0191 2788600 or emailing yhn@yhn.org.uk
Non YHN tenants, such as private or housing association tenants, can contact Newcastle City Council’s Active Inclusion Newcastle Unit by phone on 0191 277 1707 or email activeinclusion@newcastle.gov.uk

Here are the details of the cap and more support

This information sheet Benefit cap – ways to help you improve your financial situation (237kb) includes more details about the cap, some of the exemptions and many things you can do to improve your financial situation

From 7 November 2016

If your benefits were already being capped up to 7 November 2016, your benefit cap amount dropped from £500 to £385 for those with children or couples without children and from £350 to £258 for single people without children. The amounts are higher in London.

From 7 November 2016, all households which include someone entitled to Carer's Allowance, the carer's element of Universal Credit and Guardians Allowance were added to those who are exempt from the cap.

From 26 December 2016

If your benefits were not already capped on 7 November 2016, the above lower benefit cap amounts will be applied to your benefits from around week starting 26 December 2016. This date applies to Newcastle residents and may differ in other areas.

In effect from 2013

The government introduced the benefit cap at £500 a week for those with children or couples without children and at £350 a week for single people without children.

More information on the benefit cap from the DWP including the lower benefit cap

More information on the benefit cap including exemptions from Citizens Advice website

Introduction of Universal Credit

Universal Credit is a means tested benefit that is gradually replacing the following benefits and tax credits for those of working age: Income Support, Income based Jobseeker's Allowance, Income related Employment and Support Allowance, Working Tax Credit, Child Tax Credit, Housing Benefit

More detail on Universal Credit

April 2022

The Government announce the second part of the move to Universal Credit will begin on a small scale in May 2022 and that by 2024, everyone on 'legacy benefits' will have moved across to Universal Credit. See our new page the move to Universal Credit

24 November 2021

Instead of continuing with the £20 a week uplift, the Autumn Budget announced these two measures that will increase Universal Credit for some workers:

- The ‘earnings taper rate’ will be changed from 63% to 55%. It means that working claimants will be able to keep an extra 8p for every £1 of net income they earn.

- The ‘work allowance’ will be increased by £500 a year. This means that some claimants will be able to keep more of their earnings. The Universal Credit Regulations 2013 brought in the above measures from 24 November 2021, earlier than the 1 December date in the Autumn Budget.

July 2020

Legacy benefits like Income Support, will continue for two weeks following a claim for Universal Credit. This adds more ‘legacy benefits’ to the run on for Housing Benefit

October 2019

The maximum amount that can be deducted from Universal Credit for court fines, rent arrears and other debts is lowered from 40% to 30%. DWP guidance

July 2019

A limited Universal Credit ‘managed migration’ to begin - for a small test group of up to 10,000. Learning to be used for the later full roll out

Universal Credit self-employed earnings ‘grace period’ extended to more people – where actual earnings from self-employment is accepted

15 May 2019

Couples who make a new claim for Universal Credit - where one is under pension credit age and one is over - will have to claim Universal Credit instead of Pension Credit or pension age Housing Benefit – unless they are protected. Before this change, such ‘mixed age’ couples would be able to claim Pension Credit and/or pension age Housing Benefit. Note, Pension Credit and pension age Housing Benefit can be backdated three months, so claims up to 14 August can be made so long as the rules are satisfied before 15 May. More details from Age UK

April 2019

The Universal Credit work allowance (part of how earnings are treated) is to be improved

Funding for ‘universal support’ for Universal Credit claimants having problems with claiming is moved from Local Authorities to Citizens Advice

16 January 2019

People with a certain level of disability will be ‘protected’ from making a new claim for Universal Credit

1 February 2019

People with three or more children will now be able to claim Universal Credit – but there may not be an amount payable for those 3rd or subsequent children if they were born from or after 6 April 2017 – unless exceptions apply.

16 January 2019

For a temporary period, some disabled people will not be able to claim Universal Credit and will be advised to remain on or claim ‘legacy benefits’ (that are being replaced by Universal Credit). This is to protect them from potentially dropping down to a lower Universal Credit amount. This relates to those getting a ‘severe disability premium’ in their ‘legacy benefits’. See our January, March 2019 and other Benefit Bulletins for more information

From 2019

Proposed Universal Credit changes in 2019, are in the November 2018 Benefit Bulletin and will be added here as they are confirmed

From 31 December 2018

Universal Credit housing costs reinstated for 18 - 21 year olds

From April 2018

New free school meals earnings limit for Universal Credit. Help with mortgage interest changes to a loan. Two week Housing Benefit ‘run-on’ for new Universal Credit claims

From January and February 2018

Universal Credit ‘Live Service’ is closed, advanced payment improvements and the seven waiting days for a new claim is removed

From April 2017

Universal Credit is limited to help with two children – unless exceptions apply. However, those with three or more children claiming Universal Credit will be directed to claim Tax Credits and other 'legacy benefits' until 31 January 2019. The higher first child element also removed.

From February and March 2017

Full service Universal Credit is rolled out to the other two remaining Jobcentre Plus areas in Newcastle.

From 25 May 2016

Those living in the area covered by Cathedral Square Jobcentre Plus who make a new claim for any of the above six benefits will have to claim Universal Credit instead.

From April 2016

The ‘reward’ in Universal Credit for working, called the ‘work allowance’ is reduced. Help with childcare costs is increased.

From April 2015

Single people who claim Jobseekers Allowance are told to claim Universal Credit

More information on Universal Credit

Benefits relating to ill health

In addition to the following changes, see our webpage on Universal Credit

Employment and Support Allowance

4 April 2022

For benefit purposes, you are regarded as ’terminally ill’ if you have a progressive disease from which your death can ‘reasonably be expected within six months’. This is extended to 12 months from 4 April 2022 for UC and ESA. At some stage, similar improvement will apply to disability benefits.

From 3 April 2017

Loss of £29 a week for those on the sick. Removal of the extra component in Employment Support Allowance and its equivalent to Universal Credit for new claimants.

Those in the support group and its equivalent in Universal Credit, will continue to get the support component.

See our April 2017 benefit bulletin for more details on these and other April 2017 changes.

From 15 March 2017, 8 February 2017 and 25 May 2016

Those living in the areas covered by the three Jobcentre Plus offices in Newcastle who want to make a new claim for income related ESA have to claim Universal Credit instead. Existing claimants in that area will also have to claim Universal Credit if they have a certain change in circumstance.

In Universal Credit areas, Contributory ESA becomes 'New Style ESA'. Details from gov.uk guide, flowchart and independent information

From April 2012

Contributory Employment Support Allowance (based on National Insurance) for those placed in the work related group is limited to 52 weeks of payment. Those in the ESA support group are exempt from this limit.

See our various factsheets on Employment and Support Allowance and the 'WCA' test on the benefit information page

From 2011 to 2014 or longer

Since 2011 people can no longer make new claims for Incapacity Benefit - it was replaced by Employment and Support Allowance (ESA). At some stage, people on these benefits will be assessed under ESA.

Incapacity Benefit
Income Support paid because of an illness or disability
Severe Disablement Allowance

Also see our sheet on 'sanctions and how to avoid them' which is available on our benefit information page

More information on Incapacity Benefit

More information on Employment and Support Allowance (ESA)

Benefits relating to Jobseekers

From 1 April 2017

This cut was reinstated 31 December 2018

Removal of housing costs help in Universal Credit for new claims from out of work 18 to 21 year olds, who are single and subject to ‘all work related requirements’. Exemptions apply.

See our April 2017 benefit bulletin for more details on this and other April 2017 changes.

From 15 March 2017, 8 February 2017 and 25 May 2016

Those living in the areas covered by the three jobcentre plus offices in Newcastle who want to make a new claim for income based Jobseeker's Allowance have to claim Universal Credit instead. Existing claimants in that area will also have to claim Universal Credit if they have a certain change in circumstance.

In addition to the following changes, see our webpage on Universal Credit

In effect from 27 April 2015

Some single people in Newcastle who claim income related Jobseekers Allowance have to claim Universal Credit. For more details on how Universal Credit is replacing this benefit see our web page on Universal Credit.

Working Tax Credit - for those in work

From 6 April 2017

The two child limit rule applies for those with three or more children

See our April 2017 benefit bulletin for more details on this and other April 2017 changes.

In addition to the following changes, see our webpage on Universal Credit

From 15 March 2017, 8 February 2017 and 25 May 2016

In effect from May 2016

Those living in the area covered by Cathedral Square Jobcentre Plus who make a new claim for Tax Credits have to claim Universal Credit instead. Existing claimants in that area will also have to claim Universal Credit if they have a certain change in circumstance.

In effect from April 2016

Disregarded annual income is reduced to £2,500

In effect from April 2013

Disregarded annual income is reduced to £5,000.

In effect from April 2012

The amount of Tax Credits was withdrawn quicker for those previously protected. The number of hours a couple must work to be eligible increased from 16 hours to 24 hours a week. At least one person in a couple must work 16 hours. (see our factsheet on the 24 hour rule). The additional allowance for people aged over 50 returning to work is abolished. Backdating of claims reduced from 3 to 1 month. Falls in income of up to £2,500 will be ignored. This new rule means that Tax Credits will not be increased for the first £2,500 fall in income.

In effect from April 2011

The amount of Tax Credits reduces at a quicker rate as earnings increase. Claimants aged over 60 need only work 16 hours a week instead of 30 hours a week to be eligible. Increases in income of up to £10,000 ('disregarded income') in an award year will not affect eligibility. This is a reduction from £25,000. Help with child care costs reduced. Certain elements of Working Tax Credit frozen.

More information on Universal Credit

More information on Working Tax Credit

Work related requirements

The Government has increased work related activities for Jobseekers those on Employment and Support Allowance and lone parents.

From 6 April 2017 Increased conditionality extended to those with younger children

Parents claiming Universal Credit whose youngest child turns 3 years old will have to be fully available for work and work activity, and those whose youngest child turns 2 years old should take part in work preparation as well as work focused interviews.

Also for example, the Universal Credit 'claimant commitment' was brought forward to Jobcentres from October 2013 and more work related requirements were introduced in early 2014 for Jobseekers and lone parents. Increased work related activities and sanctions were also put in place for Employment and Support Allowance from October 2013.

Failure to comply with these requirements without good reason will result in a benefit sanction for several weeks or months. From 2012, this was increased from 2 to 26 weeks to 4 weeks to 3 years.

It is important claimants understand the commitment and what they are required to do. Otherwise they risk a benefit sanction.

More details on the Citizens Advice Website Look in the AZ for 'sanctions', 'jobseekers agreement' and the 'claimant commitment'.

Also see our sheet on 'sanctions and how to avoid them' which is available on our benefit information page

More details on these changes in our benefit bulletins

Further help

What can I do if I'm affected by these changes?

Bereavement Benefits

In effect from 6 April 2017

Bereavement Support Payment replaced Bereavement Benefits for those bereaved from 6 April 2017. It is available to people up to State Pension age consisting of a lump sum and will last for 18 months. In addition, the new payment will not be taxed, and will be disregarded by means-tested benefits and the benefit cap.

For a comprehensive list of benefit changes see our 'timeline of benefit changes' on our changes to the benefits system page

Title

Have your say

Changes to benefits for people of working age (including unemployment, in work, sickness benefits, bereavement benefits and the benefit cap)