27th March 2014
Here are the main welfare related changes as announced in the Budget 2014.
The Government will cap welfare spending from 2015.
Welfare spending accounted for 29% of total government managed expenditure in 2013/14 and the budget has increased significantly in real terms over the last two decades.
To make sense of the welfare spending cap, read this excellent Centre for Economic and Social Inclusion blog
Tax-free childcare for working families
The government have announced support for 20% of costs up to £10,000 for each child under 12
Increase in the Carer's Allowance income disregard
From £100 to £102 per week
Temporary measures to increase Support for Mortgage Interest for working-age claimants
Extended again until 31 March 2016.
The waiting period remains at a shortened period of 13 weeks (vs. 39 weeks) and the working-age capital limit remains at the higher £200,000 limit (vs. £100,000).
7 day waiting period will apply in ESA
Kicks in from October 2014.
1% uprating of working age benefits and tax credits
From April 2014 there will again be a 1% uprating of most benefits including Child Benefit
Migrants Access to Benefit measures
The Budget confirms 3 measures:
1. A 3 month residency requirement for claiming Jobseekers Allowance. This has been in force since 1 January 2014. It impacts on most EEA and non-EEA jobseekers, including returning GB nationals.
2. From 1 January 2014 EEA migrants are only eligible to claim Jobseekers Allowance for 6 months, unless they have genuine prospects of work. This measure complements Home Office amendments to immigration legislation creating a statutory presumption that unemployed EEA migrants will lose their right to reside in the UK after 6 months.
3. For new claims from 1 April 2014, EEA Migrants classed as 'Jobseekers' and who are entitled to income-based Jobseekers Allowance will no longer be entitled to Housing Benefit.
Universal Credits childcare costs
The Budget announced that the Government will offer all families on Universal Credit childcare support up to 85% of their actual costs - an increase from 70%.
Class 3A Voluntary National Insurance Contributions (vNICs)
The Chancellor announced a new scheme in the Autumn Statement, which will allow pensioners to top-up their additional State Pension by paying a new type of voluntary National Insurance contribution, called a Class 3A. The single-tier pension to be introduced in 2016 will be particularly beneficial to groups such as women and self-employed who have poor State Pension outcomes under existing rules due to low levels of additional State Pension entitlement.
Class 3A will provide people in those groups, who reach State Pension age before 6 April 2016, with the opportunity to pay for extra additional State Pension of up to £25 per week, if they wish to do so. This will help pensioners who have savings and want to boost their state pension income in a way that protects them from price inflation and provides them with an income for life.
The full Budget and supporting documents can be found on Gov.UK.
The issues affecting real people
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