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Welfare Changes Statement from the Autumn Budget 2018

Universal Credit Work Allowance increase – The Budget announces that the amount that households with children, and people with disabilities can earn before their Universal Credit award begins to be withdrawn – the Work Allowance – will be increased by £1,000 from April 2019. This means that 2.4 million households will keep an extra £630 of income each year. (13)

Extra help for households moving onto Universal Credit – The government has listened to representations made by stakeholders on Universal Credit, and the Budget announces an extensive package of extra support for claimants as they make the transition to Universal Credit. (14)

Building on the Autumn Budget 2017 announcement that Housing Benefit claimants will receive an additional payment providing a fortnight’s worth of support during their transition to Universal Credit, the government will extend this provision to cover the income-related elements of Jobseeker’s Allowance and Employment and Support Allowance, and Income Support. This will be effective from July 2020, and benefit around 1.1 million claimants. (14)

To support the transition to Universal Credit for all self-employed people, the government is also extending the 12-month grace period (the period before the Minimum Income Floor applies) to all gainfully self-employed people; giving claimants time to grow their businesses to a sustainable level.92 This will be introduced from July 2019 and implemented fully from September 2020. (14)

From October 2019, the government will reduce the maximum rate at which deductions can be made from a Universal Credit award from 40% to 30% of the standard allowance. This will ensure that those on Universal Credit are supported to repay debts in a more sustainable and manageable way. From October 2021, the government will also increase the period over which advances will be recovered, from 12 to 16 months.

Funding for previously announced measures – In addition, the Budget provides funding for the announcements made by the Secretary of State for Work and Pensions in April and June 2018 to support the roll out of Universal Credit. This provided additional protections for welfare claimants, including: enhancements to transitional protection for people moving onto Universal Credit; extending existing support for non-parental carers and adopters in tax credits and Universal Credit; and enhanced protections for those currently receiving the Severe Disability Premium to provide additional support as Universal Credit is implemented. (14)

The government will deliver these changes slowly and carefully. In response to feedback on Universal Credit, the implementation schedule has been updated: it will begin in July 2019, as planned, but will end in December 2023. The scope of the surplus earnings policy in Universal Credit will also be temporarily reduced: it will continue to affect large earnings spikes (above £2,500) until April 2020, when it will revert to affecting earnings spikes of £300. (15)

Housing Benefit – The government continues to ensure that housing benefit is targeted most effectively to support those who need it. This includes:

Revising the timetable for transferring rent support from Housing Benefit to Pension Credit – The government will delay the transfer of rent support from Housing Benefit to Pension Credit by 3 years, to ensure that this transfer aligns with the full implementation of Universal Credit. (15)

Retaining funding for supported housing in welfare – As announced in August 2018, the government has decided to retain funding for supported housing within the welfare system, rather than moving to a local funding model.

Reinstating automatic entitlement to housing support for 18 to 21 year olds – As announced by the Secretary of State for Work and Pensions in March 2018, the government will reinstate automatic entitlement for housing support for 18 to 21 year olds. This group will therefore be entitled to claim support for housing costs under Universal Credit. (14)

Parental bereavement leave and pay – The government will introduce a new statutory entitlement to two weeks’ of leave for employees who suffer the death of a child under 18, or a stillbirth after 24 weeks of pregnancy. Employed parents will also be able to claim pay for this period, subject to meeting eligibility criteria. This entitlement will come into force in April 2020.

Extension to the closure of childcare vouchers to new entrants – The government listened to the concerns of parents and MPs about the transition from childcare vouchers to Tax-Free Childcare and took the decision to keep childcare vouchers open to new entrants for a further 6 months, until October 2018. This allowed more time for Tax-Free Childcare to bed in and for families to understand their entitlement. (76)

Inclusion of Dupuytren’s contracture in Industrial Injuries Disablement Benefit – Dupuytren’s contracture will be added to the existing list of over 70 prescribed diseases for which Industrial Injuries Disablement Benefit is payable, as recommended by the Industrial Injuries Advisory Council. Eligible claimants are expected to gain, on average, over £1,200 per year. (16)