Empowering People 


2016 UK Benefit changes

Posted on 20 November, 2015 at 15:45

Benefit changes across the UK April 2016

New legislation will allow the Secretary of State to review the household benefit cap each year.

Starting as from the new tax year (April 2016), household benefit income will start to change, as listed below.

Working-age benefits rate freeze - Working-age benefits, including tax credits and Local Housing Allowance, will be frozen for 4 years from 2016-17 (this doesn’t include Disability Living Allowance, Personal Independence Payment, Employment and Support Allowance support group payments, Maternity Allowance, Maternity Pay, Paternity Pay and Sick Pay) Benefit Cap reduction and regionalisation.

Once these legislations have been passed the intention is to impose a cap reduction to £20,000 (£13,400 single rate) and £23,000 in London (£15,410 single rate) from April 2016.

Universal Credit and Tax Credit

• Tax Credit and Universal Credit in work reforms Income threshold reduction - From April 2016, the level of earnings at which a household’s tax credits and Universal Credit award starts to be withdrawn for every extra pound earned will be reduced from £6,420 to £3,850.

• Universal Credit 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.

• Tax credit taper – This is the rate at which a person’s or household’s tax credit award is reduced. The taper rate will be increased from 41% to 48% from April 2016.

• Support for children – In households with two or more children any subsequent children born after April 2017 will not be eligible for further support. Equivalent changes will be made to the Housing Benefit rules. (This will also apply in Universal Credit to families who make a new claim from April 2017.)

• Family element - Those starting a family after April 2017 will no longer be eligible for the Family Element in tax credits. The equivalent in Universal Credit, known as the first child premium (£17.45), will also not be available for new claims after April 2017.

• In Housing Benefit, the family premium will be withdrawn for new claims from April 2016.

• Young people - Those aged 18 to 21 who are on Universal Credit will have to apply for an apprenticeship or traineeship, gain work-based skills, or go on a work placement 6 months after the start of their claim. Apart from certain exceptions (those considered vulnerable) they will not be allowed to claim Housing Benefit. -

• Social Housing Rent reductions - Rents for social housing will be reduced by 1% a year for 4 years, and tenants on higher incomes (over £40,000 in London and over £30,000 outside London) will be required to pay market rate, or near market rate, rents.

• The government will review the use of lifetime tenancies in social housing to limit their use with the aim of ensuring households are offered tenancies that match their needs, and ensure the best use is made of the social housing stock.

• New National Living Wage of £7.20 an hour for the over 25s.

• Employment Allowance rises from £2,000 to £3,000. The Employment Allowance gives businesses and charities a cut in the employer National Insurance they pay.

• Support for Mortgage Interest (SMI) waiting period will return to the pre-recession length of 39 weeks, but the capital limit will be maintained at the higher level of £200,000.

• Bereavement support payment replaces current bereavement benefit system

• Introduction of single-tier pension.

• Removal of Assessed Income Period in Pension Credit awards. Households on Pension Credit will now need to report all changes in their circumstances that will affect their benefit as they happen. Pensioners aged 75 and over who have an indefinite assessed income period in place will be exempt unless the assessed income period would end under current rules.

• Under the Social Services and Well-being (Wales) Act 2014, which comes into force from April 2016, carers of any age who provide unpaid care and support to a relative, friend or neighbour who needs care and support – will no longer need to be providing ‘a substantial amount of care on a regular basis’ to be able to have an assessment. The local authority will have a duty under the Act to undertake a carer’s assessment where it appears they have needs for support.

• The government will abolish employer National Insurance contributions up to the upper earnings limit for apprentices aged under 25.

From September 2016

• New maintenance loan support will replace student grants. Cash support for new students will increase by £766 to £8,200 a year. Loans will be paid back only when graduates earn above £21,000 a year.

• The government will introduce income-contingent loans of up to £10,000, planned to be available from 2016-17, for under-30s to undertake a postgraduate taught masters course.


For further Information, and benefit calculations, please visit www.turn2us.org.uk, or direct.gov, or speak to a member of the citizen advice.


Categories: Uk Benefit Changes

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Reply Williamhaich
1:22 on 14 January, 2017 
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