There are a range of benefit changes coming into effect in the next months which it is important to be aware of in case you are affected.
A significant change is that Support for Mortgage Interest will no longer exist as a benefit and is being replaced with an interest-bearing loan. This means that owner-occupiers who require help with paying their mortgage interest can choose to take out a loan and have a charging order placed on their property. This change will apply to people getting the support for mortgage interest benefit as well as new claimants. To qualify for a loan you have to be entitled to Income-based Jobseekers Allowance, Income-related Employment and Support Allowance, Income Support or Pension Credit. Universal Credit claimants also qualify for a loan providing they have no earnings. Repayment of the loan and the interest added to it will become due in the event of the sale of the house or transfer of ownership, assuming there is enough equity in the property.
Pension deductions will treble for auto-enrolled pensions this month which will mean 2.4% of pay will be diverted into people’s pensions.
Meanwhile part-time undergraduate students will be entitled to maintenance loans for the academic year 2018-19 to support the cost of living while studying for the first time. Previously these were only available to full-time students.
Employer Childcare Vouchers were due to no longer be available to new claimants from this month, but this has now been delayed for six months. Parents who cannot access Childcare Vouchers can receive help with their childcare costs through Tax Free Childcare or through Working Tax Credit or Universal Credit. You can’t receive Tax-free Childcare at the same time as Tax Credits or Universal Credit and these benefits will stop if you successfully claim Tax-free Childcare. You can use the Gov.uk website’s childcare calculator to find out what scheme is best for you. Existing claims for Employer Childcare Vouchers will continue until the child is 15, or 16 if disabled – or the claimant starts another scheme.
For those transferring from Housing Benefit to Universal Credit, Housing Benefit payments will be allowed to continue for an extra two weeks after the start of the Universal Credit claim from this month. You do not have to wait for a decision on your claim for Universal Credit to be entitled to this and you will not have to pay this amount back – this will be paid in addition to your Universal Credit award, which may also include an amount for your Housing Costs. This is an attempt to reduce the threat of eviction caused by delays in housing cost payments at the start of a new Universal Credit claim.
In addition, the Housing Costs element of Universal Credit will not be available to new claimants living in temporary accommodation from April. New claimants who are living in temporary accommodation will instead receive Housing Benefit to cover their housing costs whilst being in receipt of the personal element of Universal Credit.
The Government expects that Universal Credit will be rolled out to all areas of the country by the end of December 2018 for new Universal Credit claimants. Families with three or more children, however, won’t be able to start Universal Credit claims until February 2019 onwards.
The Joseph Rowntree Foundation has predicted that 470,000 more people will be living in poverty by 2020/21 as a direct result of the continued benefits freeze and that many of those who will fall into poverty over the next few years will be in working households.
If you are struggling, use the Turn2us Benefits Calculator to see what benefits you are entitled to. You can also use the Grant Search to find a charitable fund that can help. Go to Turn2us.org.uk
*This article was written by Turn2us.org.uk.