The budget….impact on HB and CTS

We expected to see a lot of changes in the Budget and were not disappointed. A range of new “transitional protection” schemes will have to be developed to protect existing claimants until they are transferred across to universal credit (UC). The changes in the “benefits cap” are particularly significant of course.

Key measures directly affecting Housing Benefit and Council Tax Support include:

Most working-age benefits will be frozen for four years from April 2016 including housing benefit applicable amounts and local housing allowance levels.

The government will reduce the “benefit cap” from £26,000 to £20,000, except in Greater London where the cap will be £23,000. The current exemptions to the cap will continue to apply. The start date of this is as yet unknown.

Housing benefit backdating will be restricted to a maximum of four weeks from April 2016.

The “family premium” will be withdrawn from new HB claims from April 2016.

Again from April 2016, UC work allowances will be reduced to £4,764 for those without housing costs, £2,304 for those with housing costs, and removed altogether for non-disabled claimants without children.

From April 2017, most welfare support provided to families will be limited to two children; subsequent children born after April 2017 will not be eligible for further support. This will apply to Housing Benefit, tax credits and UC where a new claim is made from April 2017.

The government will provide £800 million of funding for Discretionary Housing Payments (DHP’s) over the next 5 years.

From April 2017 the Budget will also remove the automatic entitlement to help with housing costs for new claims in Universal Credit from 18-21 year olds who are out of work. There will be some exemptions. It appears this will not apply to Housing Benefit; by this time all single claimants should have been transferred across to UC (except for exempt accommodation).

Don’t forget that many of the announced changes will have a major impact on Council Tax Support / reduction schemes starting next April. For instance, the announced (9 billion pound) cut in tax credits from April 2016 will drastically reduce claimant incomes. This will potentially increase entitlement to CTS and therefore the cost of local schemes. Local Authorities will have to meet the significant extra cost of this unless they decide to change their schemes in time for next year. A discussion thread on this can be found HERE