I’ve already blogged about this years’ forthcoming changes to the benefits and tax credits system. It is pretty much business as usual in 2011 with a few tweaks but if you haven’t already it is well worth having a look at our free, downloadable IncomeMAX Benefits & Tax Credits Checklist which we will be fully updating for 2011/2012 (along with iBenefits, our very own iPhone app).  

But what does the future hold for the benefits system? As we look into the IncomeMAX crystal ball, we may see a very different welfare system from 2013 onwards…

Universal Credit

Universal Credit (UC) will replace a number of current working age benefits BUT NOT ALL BENEFITS as many people seem to think. Universal Credit will definitely replace Income Support, Income-Based Jobseekers Allowance, Income-Related Employment & Support Allowance, Housing Benefit, Child Tax Credit and Working Tax Credit. Working age families will claim UC to help top up their income and the idea is that claimants will keep more of their UC when they work. This will mean increased income disregards and the use of a single taper, which is used to reduce the amount of benefit you are entitled to.

Universal Credit will be means-tested and at present the Government are planning to have a savings limit similar to what is used for benefits such as Income Support, IB JSA, IR ESA and HB. There is still an awful lot to be considered by the Government before Universal Credit is finalised and IncomeMAX will be bringing you all of the latest information.

Work Programme

There will be a main Work Programme to help most working age claimants find/stay in work.

Work Choice

There will be a separate Work Choice programme to help disabled people find employment.

Get Britain Working

The Get Britain Working initiative will provide support through Work Clubs, Work Together and Work Experience    

Contribution Based Jobseekers Allowance

There will still be a Contribution based Jobseekers Allowance, eligibility of which will be dependent on satisfying National Insurance contribution conditions. CB JSA is payable for up to six months.

Contribution-based Employment & Support Allowance

There will still be a Contribution based Employment & Support Allowance for those with limited capability of work, eligibility of which will be dependent on satisfying National Insurance contribution conditions (or, possibly, a young person as is currently the case).

Carers Allowance

Note that is unclear at present whether there will still be a form of Carers Allowance or if Carers Allowance will also be replaced by Universal Credit. The Government are committed to reforming the support available to carers so we’ve included Carers Allowance here for now.

Enterprise Allowance

There may also be an Enterprise Allowance for people who are out of work and enter self-employment. People who take up the allowance will receive a weekly payment linked to the value of their benefit for a period of up to six months

Council Tax Benefit

Council Tax Benefit will not be part of Universal Credit and will still be administered by Local Authorities. Council Tax Benefit would be available to both working age and pension age claimants.

Housing Benefit for Pension age customers

Although Housing Benefit will be part of Universal Credit for working age customers, there will obviously need to be a separate Housing Benefit scheme for pension age customers. We can only guess what the arrangements might be, but it probably will be one of two possible options a) local authorities continue to administer HB for pension age claimants or b) HB is paid within pension credit in much the same way that HB will be paid within Universal Credit

Discretionary Housing Payments

Local Authorities might still have a Discretionary Housing Payment Scheme to help claimants with additional housing costs not covered by Universal Credit/HB for pensioners  

Child Benefit

Child Benefit will still be available but will no longer be available to families where one parent or more is a high rate tax payer

Guardians Allowance

People responsible for dependent children or young people that have been orphaned might still be able to claim Guardians Allowance

Personal Independence Payments

Personal Independence Payments will replace Disability Living Allowance as the disability benefit for disabled people aged under 65 when they first claim.

Attendance Allowance

It is likely that there still be a separate disability benefit for people aged over 65 when they first claim

Pension Credit

It is likely that Pension Credit will still exist as the mean-tested top-up benefit for people that are of Pension Credit Qualifying Age.

Retirement Pension

There will of course still be a State Pension for those that are of State Pension Qualifying Age

Bereavement benefits

There will still be three benefits available: Bereavement Allowance, Widowed Parents Allowance and Bereavement Payment

Statutory Sick Pay/Statutory Maternity Pay/Statutory Adoption Pay/Statutory Paternity Pay

Statutory employee benefits will still exist

Maternity Allowance

There will still be a Maternity Allowance for Mums-to-be/New Mums

Industrial Injuries Disablement Benefit

There will still be an Industrial Injuries Disablement benefit for those left permanently disabled through industrial injury or disease

Other schemes

There will more than likely still be range of other schemes, including: Armed Forces Compensation Scheme, The Social Fund (for help with extra costs such as Funerals, Community Care Grants, Loans for essential items, Maternity Grants, Cold Weather Payments etc) Winter Fuel Payments, Health Benefits, Help with School Meals and Uniform, Blue Badge, Free bus passes, Energy Efficiency Schemes

So, next time someone tells you that all benefits are being scrapped and being replaced by Universal Credit, point them in the direction of this blog! I'd really welcome your opinions on our Crystal Ball gaze into the future...

What do you think of the governments proposals?  Will this new system really be any different from the current system? Will it be a fair system? Post your comments at the bottom of the page.

Lee Healey

IncomeMAX Managing Director