Despite the Treasury’s pledge last week of no further welfare cuts, a number of significant benefit changes are already in place under this Parliament, with many due to start this April. The national charity Turn2us is encouraging people in financial hardship to check how they could be affected by the changes and see what other support could be available.
As announced in the Summer Budget 2015, April will see the start of a four-year freeze to working-age benefits and tax credits. Whilst not a direct cut, the freeze essentially erodes the value of the benefits, and for those already on tight household budgets, there is a risk it will add to the pressure of meeting everyday costs. Pensioner, disability, carer and maternity benefits are excluded from the freeze.
There will also be changes to tax credits and Universal Credit. Despite the government’s U-turn on tax credit cuts last November, there will still be a reduction in the tax credit ‘income disregard’ – the amount a claimant’s income can increase in-year without seeing a reduction in tax credit entitlement – from £5,000 to £2,500. This brings the income disregard back to the same level as when tax credits were first introduced, and according to the Treasury, it is estimated that 800,000 people will see their tax credit entitlement reduced by an average of £200-£300 per year as a result.
The Universal Credit Work Allowance – the amount you can earn without your benefit being affected – will also be reduced. It will come down to £2,304 for those with housing costs, and £4,764 for those without, and will be removed altogether for non-disabled claimants without children, meaning the benefit will be reduced as soon as they start earning.
Other welfare changes are set to take place from April – the same month that sees the introduction of a National Living Wage and a Single Tier Pension. The Turn2us website – Turn2us.org.uk – features a benefit changes timetable with further details on all of the changes so that people can see how and when they might be affected. The website also features a free Benefits Calculator that will reflect the latest welfare changes from April so that anyone can check their latest benefits entitlements.
Alison Taylor, Director of Operations at Turn2us said: “The welfare benefits system has been the subject of huge debate over the past few weeks, and it’s likely that these latest changes will bring further confusion and concern.
“We would urge anyone who is worried about their situation to visit our website where they can find further information on the changes and check their current benefits entitlements. Anyone who thinks they might see a reduction in their income as a result of the changes can check if they’re entitled to any extra help through our Benefits Calculator, and also use our Grants Search to see if they might be eligible for a charity grant or other support.”
For more information about upcoming benefit changes, please visit Turn2us.org.uk.