Benefit changes due to welfare budget cuts

  • Chancellor George Osborne has announced £12bn worth of welfare cuts in his latest budget announcement, which will affect thousands of UK families. welfare bill 2.jpg

    One of the ways the government plan to reduce welfare spending is by limiting Universal Credit and first time tax credits to the first two children in families only reports the BBC.

    Currently 870,000 families with more than two children are claiming tax credits; however any family that has a third or subsequent child after April 2017 will not be able to qualify for Child Tax Credit. The same will also apply to families claiming universal credit for the first time after April 2017. People who have been in receipt of tax credits or universal credit with an interruption of less than six months will be exempt, and this does not apply to child benefit.

    Many working age benefits are set to be frozen for four years after 2016, with people claiming Employment and Support Allowance seeing payments reduced to match Job Seekers Allowance. It is expected that 492,000 people will be affected by this cut and that it will save £445m a year.

    The benefit cap for people living in London will be reduced to £23,000 a year and £20,000 for the rest of the UK. The benefits excluded from the cap include: Working Tax Credit, Disability Living Allowance, Personal Independence Payments and the WRAG element of ESA. This is expected to save £405m a year.

    Anyone between the ages of 18 and 21 will now find it harder to receive housing benefit as from April 2017 any one of that age will not automatically be able to claim housing benefit. Parents whose children live with them will be exempt, as will vulnerable groups and claimants who have been in continuous work for the preceding six months. This is said to save £25m a year.

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