UK – Which Benefits are Changing and When

I keep getting asked what benefits are changing and when. So with kind permission from Turn2us I have added the list of which benefits are changing and when.

In 2010 the Government announced several cuts to welfare spending to make welfare more affordable, bringing the total welfare savings to £18 billion per year by 2014-15.

A calendar of the main changes to benefits and the benefits system is provided below.

Please note that detailed information about many of these changes is limited at present. Although some changes will happen quickly, others may take several years to put into practice. Some may also be subject to further revision at a later date.

If you are worried about the effects that the changes to the benefits system will have on your personal situation, we recommend that you discuss this with an expert benefits adviser. You can use the Find an Adviser tool on Turn2us website to find a local one.

January 2012

Housing Benefit

Change: the age threshold for the shared accommodation rate of Local Housing Allowance (LHA) will be increased from 25 to 35.

This means that single claimants up to the age of 35 will have their LHA based on a room in a shared property rather than a self contained one bedroom property. There will be exceptions for some disabled claimants, certain people who have previously been homeless, and ex-offenders who could pose a risk to the public.

This change will apply for all new claimants from 1 January.

For existing pre April 2011 claimants this change will take effect when their 9 month protection period from the April 2011 changes ceases so they experience all relevant changes in one go.

Existing claimants whose claims were made between 1 April 2011 and 1 January 2012 will be moved to the shared accommodation rate on the anniversary date of their claim.

For more information on Housing Benefit, see our information sheets HB (England, Scotland, Wales) HB (Northern Ireland).

Support for Mortgage Interest

Change: temporary changes to the Support for Mortgage Interest Scheme which were due to come to an end in January 2012 will be extended until January 2013. These include a reduced waiting period of 13 weeks and an increase in the eligible mortgage capital limit to £200,000.

April 2012

Benefit rates 2012-2013

See the Department for Work and Pensions website for proposed benefits rates for the next financial year 2012-2013 (link opens in a new window PDF file size 108kb).

Contributory Employment and Support Allowance

Change: people in the Work Related Activity Group of Employment and Support Allowance (ESA) will have their claims limited to one year. They will have their family income and savings assessed to see if they qualify for the means-tested version of the benefit. Any time already spent in receipt of contributory ESA whilst in the work related activity group will count towards the one year time limit so some claims will end immediately once this change comes in.

Change: ESA in youth to be abolished.

Update: Ministers to consider their proposed change to ESA after recent Lords defeats but have said they will seek to reinstate them when MPs debate the Welfare Reform Bill.

Housing Benefit (HB)

Change: a further £40million per year will be added to the Discretionary Housing Payment budget. £10 million was added in April 2011.

For more information on Discretionary Housing Payment, see our information sheet.

Income Support

Change: it is proposed that Income Support claimants who are eligible because they are lone parents will be transferred to other benefits if their youngest child is aged five years or over.

Date for change to be confirmed – see October 2011 Benefit Changes

Tax Credits


  • Further changes to the way Tax Credits are calculated so that the credit is withdrawn faster as income rises
  • 50+ element removed from Working Tax Credits (WTC)
  • If your income falls by up to £2,500 during the Tax Credit award year, the amount you get will not be revised to see if you are entitled to a higher Tax Credit payment.
  • You will only be able to backdate new applications and changes of circumstances for up to one month instead of three.
  • Increase of child element by £110. This change has been scrapped as part of the Chancellor’s Autumn 2011 Statement
  • Couples with children must work at least 24 hours a week between them, with one working at least 16 hours to qualify for WTC. However, couples with children where one person works at least 16 hours and is entitled to the WTC disability element or is aged 60 or over will still qualify for WTC. Also, couples with children will continue to qualify for WTC if only one member of the couple works at least 16 hours per week and the other is incapacitated, an in-patient in hospital or in prison
  • Couple and lone parent rates of Working Tax Credit will be frozen


Benefit Cheques

Change: A new payment service will be introduced to replace the benefit cheques system for claimants who can’t be paid by direct payment (link opens in a new window) because they are unable to open or manage bank or Post Office card accounts.

Under the new system, claimants who previously received cheques will be issued with a reusable token so that they can receive their benefits at ‘PayPoint’ outlets located in local newsagents, convenience stores, supermarkets, garages and off licences. Arrangements will be put in place for people who need someone else, such as a partner or relative, to collect their benefit for them.

The Department for Work and Pensions will start writing to those affected from September 2011 to ensure they have time to prepare for the change.

Read the Department for Work and Pensions press release about the new welfare payment service (link opens in a new window)

January 2013

Child Benefit

Change: it is proposed that families will not be entitled to Child Benefit if there is a high-rate tax payer in the household.

Update: the Prime Minister recently (January 2012) insisted that the Government was prepared to “look at the way” Child Benefit was due to be cut and suggested that a new system might be proposed in the Chancellor’s March 2012 Budget.

April 2013

Council Tax Benefit

Change: reduce spending on Council Tax Benefit by 10%. Council Tax Benefit is to be replaced by localised support for Council Tax. Local authorities will set up new schemes to support people in their own areas. This will only affect people of working-age who receive help with their Council Tax.

Further details about localising support for Council Tax.

Disability Living Allowance (DLA)

Change: The government proposes to replace DLA with a new benefit called Personal Independence Payment (PIP).

This will involve the introduction of ‘objective assessments’ to decide eligibility. The stated intention is to target support on those most in need through this new benefit.

The government is hoping for a 20% reduction in expenditure by 2017 by bringing in this process. All working-age claimants will be reassessed.

Housing Benefit (HB)


  • Size criteria will apply in the social rented sector (eg council and housing association properties). This means that people living in houses larger than they need (under-occupiers) will have to move to somewhere smaller or make up the difference in rent because their Housing Benefit will be reduced:

14% cut in Housing Benefit if you under-occupy by one bedroom

25% cut in Housing Benefit if you under-occupy by two or more bedrooms

This is only for working-age people but it is expected to affect 670,000 social sector tenants if the proposal in the Welfare Reform Bill is introduced.

  • LHA rates will be increased in line with the Consumer Price Index instead of the market rents in each area. The connection with actual rents will be lost.

For more information on Housing Benefit, see our information sheets HB (England, Scotland, Wales) HB (Northern Ireland).

Tax Credits

Change: Any rise in income of £5,000 or more during the award year will be taken into account when finalising your Tax Credit award

Benefit Cap

It is proposed in the Welfare Reform Bill that there will be a cap on the amount of benefits a working-age household can receive, capped at the level of the average working family income after tax – with the exception of those households that include a Disability Living Allowance claimant, war widow, or Working Tax Credit claimant.

Discretionary housing payments will not be included in the assessment of total benefits paid, and support for childcare through the universal credit will not be affected by the cap. No decision has been made yet on the treatment of localised Council Tax support under the cap.

A DWP impact assessment suggests a total cap set at £26,000 a year would affect 67,000 households. Over half the affected households are in Greater London, especially in inner city constituencies.

Update: During the passing of the Welfare Reform Bill through the House of Lords, they have voted to also exclude Child Benefit from the assessment of total benefits paid to a household. This would reduce the number of households affected to 40,000. The government will now have to decide whether to reinstate Child Benefit in the cap when the bill returns to the House of Commons.

October 2013

Universal Credit

The current complex system of working-age benefits and Tax Credits is to be gradually replaced by a new benefit called Universal Credit.


State Retirement Pension

Change: It is proposed that means-tested pensioner benefits will be replaced by a new flat rate ‘Citizen’s Pension’ which is not linked to National Insurance contributions. A single pensioner will receive £140 per week and a couple will receive £280 per week.

These rates are more generous than the current State Retirement Pension. Current SRP rates can be topped up with means-testedPension Credit to ensure a minimum income of £137.35 per week for a single pensioner and £209.70 per week for a couple. The new ‘Citizen’s Pension’ will only apply to those who retire on or after the date the reform is introduced, not to people already receiving their pensions at that date. The current pension system will run alongside the new one until the last person receiving a pension under the current system dies. According to the Government, this is because it would be too expensive to offer the increased flat rate pension to existing as well as future pensioners.

April 2016

State Pension Age

Change: plans to bring women’s pension age in line with men’s will be sped up from April 2016 so that women’s pension age reaches 65 in November 2018. Pension age for men and women will then increase to 66 from December 2018 to April 2020.

Update: The Pensions Bill has been amended after concerns that some women would have to wait for up to an extra two years to collect their pensions. The proposed rise in the state pension age to 66 by 2020 is to be delayed by six months, from April 2020 to October 2020 capping the increase at a maximum of 18 months.

Change: Government are also considering increasing the pension age further still after this.

Update: It was announced in the Chancellor’s Autumn 2011 statement that the increase in the state pension age for both men and women to 67 will take place between April 2026 and April 2028.

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