UPDATED. XyxxYy. Benefit Changes. The Government is cutting benefits. 1 in 7 people will be affected. Are you prepared?

Transcription

1 UPDATED Benefit Changes XyxxYy The Government is cutting benefits. 1 in 7 people will be affected. Are you prepared? 1

2 XyxxYy ARE YOU PREPARED FOR UNIVERSAL CREDIT? Most people in Sheffield who currently receive benefits will move to a new benefit called Universal Credit in the future. This will be a big change for many people. More information about Universal Credit and who will be affected is available on pages of this booklet. There are 3 simple steps you can take today to help you prepare for the introduction of Universal Credit: 1. Learn to use the Internet Training is available from a number of providers across Sheffield. Call or contact the Sheffield Online Project on Some of this training is available free of charge. You can also learn in your own time by visiting 2. Open a basic bank account or Credit Union account If you don t already have a bank account you will need one when Universal Credit is introduced. Find out more on page Open a budgeting account with Sheffield Credit Union Sheffield Credit Union budgeting accounts, also known as Jam Jar accounts, help you manage your money. Find out more on page If you are having money or debt problems make sure you get advice. Sheffield Credit Union ( ) or Sheffield Citizens Advice ( ) can offer free help. If you are a Council or housing association tenant your landlord can also give you advice. You can also visit www. sheffield.gov.uk/debt

3 The Government is making cuts in an attempt to reduce the UK s national debt. These cuts involve big changes to the welfare system. Many changes were made to the welfare system in 2013 but there are still more changes to come. The changes may affect the way you receive your benefits and the amount you get. Sheffield City Council has produced the following information to help you plan ahead. We are here to help and support you through these changes. Changes and cuts to benefits This booklet outlines the changes that might affect you. Information on how to get help and advice if you are concerned about any of these changes is given at the back of the booklet. The guidance in this booklet reflects the Council s understanding of the welfare arrangements as it affects the people of Sheffield as of 7th July Please note that these changes are for people of working age. MOST PENSIONERS WILL NOT BE AFFECTED. CHANGES AND CUTS TO BENEFITS XyxxYy Contents: page Under Occupancy Rule (Bedroom Tax)... 4 Council Tax Support... 6 Benefit Cap... 7 Personal Independence Payment... 8 Universal Credit Other benefit changes Planning your budget Find out more

4 UNDER OCCUPANCY RULE (BEDROOM TAX) Under Occupancy Rule (Bedroom Tax) In April 2013, the Government changed the Housing Benefit rules so that Council and Housing Association tenants who live in houses with more bedrooms than the Government say they need, had their Housing Benefit cut. If you are a tenant in a private property, you own your own home, or are a pensioner, this won t affect you. If you have been affected by this change you will already have been contacted. However, if your circumstances change this could affect you in the future. Under these new national Housing Benefit rules you will be allowed one bedroom for: P Each adult couple P Any other person aged 16 or over P Two children of the same sex under the age of 16 P Two children under the age of 10 regardless of their sex P Any other child P A carer (who does not normally live with you) if you or your partner need overnight care Please note: A couple with one child or a single person with one child would be allowed two bedrooms. There are some exceptions. The Under Occupancy Rule may not apply if you meet one of the following criteria: you have too many bedrooms because of a recent bereavement you could afford not to claim Housing Benefit for the previous 12 months 4

5 you have a disabled child who cannot share a bedroom because of their disability (providing the child receives the care component of Disability Living Allowance at the middle or higher rate) The changes mean: If your household has more bedrooms than you are allowed under these rules, then your housing benefit will be reduced If you have one bedroom too many, you will lose 14% or more of your Housing Benefit If you have two or more bedrooms too many, you will lose 25% or more of your Housing Benefit This reduction will be based on your eligible rent, rather than the amount of Housing Benefit you get. You will have to pay this additional money towards your rent yourself. If you are affected by these changes and are experiencing difficulty in paying your rent please speak to your landlord or local housing office, who may be able to help you with moving to a smaller property or budgeting to meet the extra rent. If making these increased payments to your rent is causing you financial hardship, you may be able to claim a Discretionary Housing Payment. For more information on how to claim a Discretionary Housing Payment, please visit gov.uk/dhp UNDER OCCUPANCY RULE (BEDROOM XyxxYy TAX) 5

6 COUNCIL TAX SUPPORT Council Tax Support In April 2013 the Government replaced Council Tax Benefit with a local scheme of Council Tax Support run by Sheffield City Council. Most pensioners will not have been affected by this change and will continue to get the same level of support with Council Tax. If you have been affected by this change you will already have been contacted. These changes mean that people living in Sheffield who are below pension age and claim support with their Council Tax now have to pay at least 23% of their Council Tax. These changes also mean that Second Adult Rebate for working age customers has ended. Sheffield City Council would rather not have to cut support for Council Tax in this way, but the reduced amount of money we are getting from the Government makes this hard to avoid. Most people will continue to get some help under Council Tax Support and we have set up a hardship fund for people who are in receipt of Council Tax Support and who are in severe financial hardship. For more information about the Council Tax Hardship Scheme, please visit Some people are entitled to pay less Council tax. If you, or someone who lives in your household, have a disability and your home has been adapted to meet the needs of the disabled person, you may qualify for a reduction in Council Tax. If you live on your own, you may qualify for a single-person discount which would reduce your Council Tax bill by 25%. Other discounts and exemptions are available in certain circumstances. For further information, visit counciltaxreductions 6

7 Benefit Cap In August 2013 the Government introduced a cap on the total amount of benefits a single person or family can receive. The cap, when it is fully implemented, will be set at 500 a week for a family, and 350 a week for a single person. If you have been affected by this change you will already have been contacted. BENEFIT XyxxYy CAP The first benefit to be reduced under the cap is Housing Benefit. Some households who have seen a reduction in Housing Benefit under the Benefit Cap still have an income above 500 (for a family) or 350 (for a single person). They will continue to receive this income until they move on to Universal Credit. People are more likely to be affected if they have a large family. Pensioners are not affected by this change. The Benefit Cap does not apply where you, your partner, or any dependent children receive: 3 Disability Living Allowance or Personal Independence Payment 3 Attendance Allowance 3 Support part of Employment and Support Allowance 3 Working Tax Credit 3 War Widows/Widowers Pensions If you have other adults living with you who do receive one of the above payments, then you may still be affected. To find out more, talk to your landlord, local Jobcentre Plus office or your local advice centre. Contact details are provided at the back of this booklet. For more information, please visit: 7

8 PERSONAL INDEPENDENCE PAYMENT Personal Independence Payment (PIP) Working Age Households The Government is introducing a new benefit called Personal Independence Payment (PIP). At the moment this only applies to people over 16 who are making an application for a disability benefit for the first time. However, Personal Independence Payment will eventually replace Disability Living Allowance. If you are aged between 16 and 64 and you currently receive Disability Living Allowance you will be asked to make a claim for Personal Independence Payment instead. We are expecting this to start to happen in Sheffield in October The Government has stated that it wants everyone on Disability Living Allowance to be reassessed for Personal Independence Payment by October Disability Living Allowance for children under 16 has not changed. Attendance Allowance for people over 65 has not changed. To get PIP, you must: be aged between 16 and 64 satisfy the daily living and/or mobility activities test for three months before claiming, and be likely to continue to satisfy this test for at least a further nine months after claiming Payments The payment rates from April 2014 will consist of: Daily Living Part standard rate per week - if you have a limited ability to carry out daily living activities enhanced rate per week - if you have a severely limited ability to carry out daily living activities 8

9 Mobility Part standard rate per week - if you have a limited ability to carry out mobility activities enhanced rate per week - if you have a severely limited ability to carry out mobility activities If you are terminally ill and your life expectancy is less than 6 months, you will not have to satisfy the period condition for the mobility part. Further information is available from PERSONAL INDEPENDENCE PAYMENT XyxxYy 9

10 UNIVERSAL CREDIT Universal Credit Universal Credit is a new benefit that is gradually being introduced by the Government. If you or your partner are aged between 16 and 64, the following benefits will eventually start to be replaced by Universal Credit (UC): Income Support Income based Jobseekers Allowance Income related Employment and Support Allowance Housing Benefit Tax Credits To find out if you are affected ask yourself the following questions: Are you a working age household? Do you receive means-tested benefits or tax credits? If you answered yes to both of these, this change will affect you in time. Pensioners will not be affected by this change. Universal Credit and Sheffield We expect the vast majority of claimants on existing benefits to move onto Universal Credit during 2016 and However, we don t yet know if this means people will have to make a new claim for Universal Credit or will just swap over from the benefit they are on now to Universal Credit. When people move to Universal Credit they will be expected to manage their benefit claim themselves using the internet. This will be a big change for some people. 10

11 How will I be paid? Universal Credit will normally: Be paid monthly in arrears Be paid to only one person in each household When you start to receive Universal Credit, any Housing Benefit you receive will end and a payment towards your rent will be included in the Universal Credit that is paid directly to you. This will be a major change for people who receive Housing Benefit now but have it paid directly to their landlord. If this happens to you, you will need to budget and make arrangements to pay your weekly or monthly rent to your landlord. This will affect Council Housing, Housing Association and Private tenants. You will also need to manage your money so that you can pay your other bills from your Universal Credit payment. UNIVERSAL CREDIT XyxxYy What can I do to prepare for Universal Credit? We expect that the Department for Work and Pensions will contact people directly to let them know when they are moving to Universal Credit. However there are things you can do to get ready now. 1. Learn to use the Internet If you need support with learning to use the Internet, it may help you to know that training is available from a number of providers across Sheffield. Contact or the Sheffield Online Project on You can also learn in your own time by visiting Once you have the skills you can get online at: First Points, Internet cafes, local libraries, a friend or relative s house and UK Online centres. Local community centres or Tenants and Residents Associations may also be able to help. 11

12 UNIVERSAL CREDIT 2. Open a basic bank account If you don t already have a bank account, you will need one when Universal Credit is introduced. You can find out more about how to do that on page 16 of this leaflet. 3. Think about how you will manage your budget If you are a Council or Housing Association tenant and you think you will need support with budgeting, your landlord can give you support. You could also consider opening a budgeting account (also known as a Jam Jar account) with Sheffield Credit Union. This account helps you manage your money. You decide which bills you wish to be paid and what income you will put into the account. Contact Sheffield Credit Union on or see for more information. You can also compare your income with the things you spend money on using the budget planner on pages 17 and 18 of this leaflet. 12

13 Other Benefit Changes Housing Benefit - reporting changes in circumstances Between 2012 and 2015, the Government is changing the way it deals with people who don t report changes in their circumstances, or who commit benefit fraud. You should always report any changes in your circumstances online at or by calling Social Fund In April 2013 some parts of the Social Fund Scheme run by the Department of Work and Pensions changed. The Department of Work and Pensions still provide: Budgeting loans Funeral payments Maternity payments Winter fuel payments Short Term Benefit Advances If you wish to enquire about these, please ring the DWP s Benefits Enquiry line on However Community Care grants and crisis loans for general living expenses were abolished. Sheffield Local Assistance Scheme now provides loans and grants. See page 14 of this leaflet for more information. OTHER BENEFIT CHANGES 13

14 OTHER BENEFIT CHANGES Local Assistance Scheme Since April 2013 the council has provided small amounts of support to customers in particular circumstances. In order to qualify for the scheme, you need to: Be in receipt of one of the following qualifying benefits: 3 Income Support 3 Income based Jobseeker s Allowance 3 Income related Employment and Support Allowance 3 Any type of Pension Credit Meet the criteria for the scheme Be unable to meet the cost by other means Please note that the Local Assistance Scheme will not provide either Loans or Grants in the following circumstances: to cover a shortfall in benefit due to a sanction being applied because you are waiting for a benefit clam to be sorted out because you are having difficulty covering your usual living costs If you are in the process of waiting for a benefit claim to be dealt with by the DWP, please contact them on , as you may be eligible for a Short Term Benefit Advance. If you have a Benefit Sanction applied or are experiencing a delay in a benefit claim being processed, you can get free advice from Sheffield Citizens Advice ( ). For more information about the Local Assistance Scheme, and an online application form, please visit: localassistance 14

15 Local Assistance Loans You may be able to apply for a loan if you need help as a result of an emergency or a crisis, where there is a severe risk to the health and safety of you or a family member. Local Assistance Loans are administered by the Sheffield Credit Union and are repayable. The Council will make a decision on your application within two working days. Local Assistance Grants A Local Assistance Grant is to help people establish themselves in the community or to ease exceptional pressure. The Local Assistance Grant can be awarded for household furniture and other essentials. The Council will make a decision on your application within 15 working days. The Grant will not have to be repaid. You can receive up to two loans and one grant within a 12 month period. If the Local Assistance Scheme can t help you, it will signpost you to other organisations who may be able to. This booklet has covered the major changes to national benefits resulting from the Welfare Reform Act Further benefit changes have resulted from the Act. These include amendments to: Tax Credits Child Benefit Employment and Support Allowance (ESA) for young people OTHER BENEFIT CHANGES 15

16 PLANNING YOUR BUDGET Planning your budget By the time Universal Credit starts the Government aims to pay all benefits into bank accounts. If you intend to claim benefits it is important that you set up a bank account or a Credit Union or Post Office account to avoid delays. Sheffield Credit Union offers accounts where money can be paid in, and from which you can pay bills. They can also support you to open a basic bank account. There are two types of bank account available: a basic bank account and a current account. Basic bank accounts are often useful if you have a low income, are worried about money or have a poor credit history. With a basic bank account you can: P receive money (benefits, pensions, wages, cheques) P pay bills by Direct Debit or standing order P take money out at cash machines P have a cheque book A basic bank account won t let you go overdrawn. To open a basic bank account you usually have to make an appointment at the bank and take two forms of identification with you. Each bank is different so you will need to ask your chosen bank what you need to do. Credit Union accounts offer the same, except for direct debits, and they are not-for-profit. They are regulated in the same way as banks, and your money is safe because it is protected by the Financial Services Compensation Scheme in the same way as banks. To open a Credit Union account, you will also need identification and proof of address, but you can usually open an account on a drop-in basis at the main office in Sheffield city centre, at an information point, or with your housing officer, where available. Just ask for more information. Contact details for Sheffield Credit Union are provided at the back of this booklet. 16

17 Budget Planner This is to help you work out how much money you have coming in and how much you re spending. To get started, collect the paperwork you re going to need: bank statements, bills, payslips... and grab a calculator. YOUR MONTHLY BUDGET Income (what money is coming in to you) Amount Wages / salary Partner s wages / salary Income Support / Job Seeker s Allowance Tax credits / Child Benefit Contribution from adult members of the household Total income BUDGET PLANNER XyxxYy Expenses (what you need to pay out every month) Mortgage / rent / secured loan Council Tax Ground rent / service charges Pension / endowment / life endowment Utility bills: water, electricity, gas TV licence / rental / subscription (e.g. Sky) Telephone / mobile / broadband Travelling expenses Essential hire purchase (e.g. car) Housekeeping (food, toiletries etc) Clothes Meals at work / school meals Childcare expenses / childcare costs Care costs Maintenance / child support Other (e.g. prescriptions) Total expenses TOTAL INCOME TOTAL EXPENSES Money left over for savings / debt repayments 17

18 BUDGET PLANNER MANAGING YOUR DEBTS Priority debts Balance owed Arrangement to clear debt Rent arrears /per Mortgage arrears /per Secured loan / second mortgage /per Council Tax arrears /per Utility debts: gas, electricity /per Magistrates Court fines /per Maintenance / child support /per TOTAL /per You need to ensure that these priority debts are covered before making payments on any other debts. Non-priority debts These include credit debts such as credit cards, store cards, overdrafts, loans (unsecured loans). Balance owed Repayment 1 /per 2 /per 3 /per 4 /per 5 /per 6 /per 7 /per 8 /per 9 /per 10 /per TOTAL /per If you cannot cover your repayments, or are struggling with payday loans or loan sharks, seek further advice from the National Debtline on or contact your local advice centre. 18

19 Find out more: This booklet provides general information and guidance on some of the upcoming changes. You may need more information, or specialist advice relating to your personal circumstances. If you are a Council or Housing Association tenant, your landlord can give you further advice and guidance on the benefit changes. You can also contact: Government: Jobcentre Plus: or Sheffield City Council: or call Sheffield Citizens Advice: or call Sheffield Credit Union: or Housing Solutions: or For support with using the internet: UK Online Centres Sheffield Online Project You can also learn to use the internet in your own time by visiting FIND OUT XyxxYy MORE 19

20 XyxxYy ALL THE INFORMATION CONTAINED WITHIN THIS BOOKLET IS ACCURATE AS OF 7th JULY 2014 This leaflet is for guidance only, and is not intended to be a full statement of the law. This document can be supplied in other languages and alternative formats, please contact Sheffield City Council 20 DP15329 When you have finished with this document please recycle it 80% This document is printed on 80% recycled paper