Welfare Benefit Changes 2016 and 2017

During 2016 and 2017 there have been a lot of changes to welfare benefits. Find out below what these are and how you might be effected.

  • Universal Credit

    Important changes to Universal Credit Claimants aged 18-21.

    From 1st April 2017, the rules changed for young people aged 18 to 21 who want to claim help with housing costs in areas where Universal Credit is fully rolled out.

    From 1 April 2017, some 18 to 21 year olds claiming Universal Credit will not be entitled to help with housing costs.

    The change will only apply in Universal Credit full service areas.

    Universal Credit full service is available to all types of claimants in certain areas of Great Britain.  You will have an online Universal Credit account to manage your claim. You can use your account to report changes, send messages to your work coach and find support.  Eventually all Universal Credit claims will be on the full service and you will have a Universal Credit online account.

    The following 18 to 21 year olds claiming Universal Credit will still be able to get help with their housing costs:

    • people receiving Universal Credit housing costs prior to 1 April 2017 until they move off Universal Credit or cease to claim those housing costs
    • certain vulnerable people (single parent of a child under 3, care leavers, a Carer or a pregnant woman due to give birth within 11 weeks)
    • people unable to live with their parents
    • those claiming as a couple
    • people who are not subject to all work-related requirements for receiving Universal Credit
    • people who are in work, subject to minimum earnings
    • people who have recently left work, subject to minimum earnings (In this case the help is available for a limited period)

    People on Housing Benefit are not affected unless they stop claiming Housing Benefit, then at a later date make a claim for housing support through Universal Credit.

    If you need more information speak to your Work Coach at the Jobcentre or the Money Advice Team on 0345 60 20 540.

    Other changes

    • From 6 April 2017 Universal Credit will be limited to 2 children. If you are already claiming Universal Credit, there will be no increase for subsequent children born on or after 6 April. New claims for Universal Credit from families that already have more than two children will be redirected to Tax Credits until November 2018.


    • If your eldest child is born on or after 6 April 2017 you will not be eligible for the ‘first child premium’ in Universal Credit - a higher rate of child element for the first child - which means the child element for the first child will be the same rate as for the second child.


    • There will be a reduction in the taper rate to 63%. This means for every £1 you earn over your work allowance (if you are eligible for one) your Universal Credit will be reduced by 63 pence instead of 65 pence as it currently stands.


    • Parents, including lone parents, will be expected to have work focused interviews when their youngest child turns 1, then start work preparation when their youngest child turns 2, all leading up to them being expected to look for work when their youngest child turns 3.


    • The Limited Capability for Work element will be abolished to mirror changes to Employment and Support Allowance, reducing support for those deemed capable of some work related activity.


    • 18-21 year olds claiming Universal Credit will have to participate in an intensive period of support at the start of their claim. After six months, if they are not working they will be expected to apply for an apprenticeship, traineeship, gain work place skills or go on a work placement. 


    • There will no longer be automatic entitlement to the housing element of Universal Credit for 18-21 year olds who are unemployed. Though there will be various exceptions for parents, vulnerable groups and people who could previously afford their rent without assistance.


  • Benefit Cap Reduction

    In November 2016 the Government further reduced the amount of combined benefits people are able to claim.  If you live outside of London the maximum about of benefit you can receive per week is £384.62 if you are a couple (with or without children) or a lone parent and £257.69 if you are a single person.   The cap is applied to any Housing Benefit you are entitled to unless you are in receipt of Universal Credit.

    There are some exemptions.  See our Benefits Cap page for more information.

  • Housing Benefit

    Housing Benefit backdating will be reduced so that new claims from working age claimants will be backdated for a maximum of one month. It is therefore crucial that you keep your claim up to date and claim as soon as you are aware that you are entitled to ensure that you do not lose out.

    Local Housing Allowance If you signed your tenancy from 1 April 2016, you will be affected by the introduction of Local Housing Allowance (LHA).  The change will not affect you until 1 April 2019.  The LHA rate sets the maximum rent that Housing Benefit can cover based on the location and size of the property your household.  See our Local Housing Allowance page for more information.

  • New State Pension

    For those reaching pension age from 6 April 2016 a new State Pension is being introduced to replace the basic State Pension and State Second Pension. This affects all women born on or after 6 April 1953 and all men born on or after 6 April 1951. The new pension is designed to be much simpler than the current system and will consist of a single amount to be awarded in full if you have 35 qualifying years of National Insurance contributions. If you don't have the contributions required for the full pension, as long as you have a minimum number of qualifying years (between 7 and 10) you will receive a pro rata amount. If you don't have the minimum number of qualifying years you will not qualify for the single tier pension. Any contributions made under the current pension system can be used toward the new State Pension.

    More information can be found here.



  • Child Tax Credits

    From April 2017 support provided through Child Tax Credit will be limited to 2 children, so that any subsequent children born on or after 6 April 2017 will not be eligible for further support. You can still receive a child element for more than 2 children if the children were born before 6 April 2017.

    In addition to the 2 child limit, the ‘family element’ of £545 per year will be abolished. In effect this will mean that families with at least one child born before April 2017 will continue to get the family element but claims where the eldest child is born on or after 6 April will not receive the family element.

  • Employment and Support Allowance work-related activity group

    New claimants of Employment and Support Allowance who are placed in the Work-Related Activity Group will receive the same rate of benefit as those claiming Jobseeker’s Allowance because the Work Related Activity component is being abolished. This does not affect people placed in the Support Group.