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Welfare Reform and Universal Credit

The government is replacing a range of working age benefits with a new single payment called Universal Credit for anyone on a low income or out work. 

A limit has also been introduced on the total amount of benefit that working age people can receive. You can find out more about these welfare reforms below.

Universal Credit

Universal Credit will replace the following benefits:

  • Child Tax Credit
  • Housing Benefit
  • Income Support
  • income-based Jobseeker’s Allowance (JSA)
  • income-related Employment and Support Allowance (ESA)
  • Working Tax Credit

If you currently receive any of these benefits, you can’t claim Universal Credit at the same time.

Universal Credit is being introduced in stages across the UK. You don’t need to do anything until you hear from the Department for Work and Pensions (DWP) about moving to Universal Credit, unless you have a change in circumstances.

Benefit cap

The benefit cap is a limit on the total amount of benefit that most people aged 16 to 64 can get. If you are a single person, you are limited to £257.69 per week, if you are a couple or family, you are limited to £384.62 per week of the below benefits. If the amount you receive exceeds this amount, it will be deducted from your Housing Benefit.

The benefit cap affects:

  • Bereavement Allowance
  • Child Benefit
  • Child Tax Credit
  • Employment and Support Allowance
  • Housing Benefit
  • Incapacity Benefit
  • Income Support
  • Jobseeker’s Allowance
  • Maternity Allowance
  • Severe Disablement Allowance
  • Widowed Parent’s Allowance (or Widowed Mother’s Allowance or Widow’s Pension if you started getting it before 9 April 2001)
  • Universal Credit

Single claimants under 35 years old

If you’re single and under 35, you can only get Housing Benefit for bed-sit accommodation or a single room in shared accommodation. This is called the shared accommodation rate. 

The shared accommodation rate does not apply if you:

  • have a child who lives with you
  • live with your partner as a couple
  • live with an adult non-dependant
  • are a foster carer
  • receive certain disability-related benefits.

More information on the shared accommodation rate is available from Shelter.

‘Bedroom tax’

If you rent from us, a registered housing association or other registered social landlord, the amount of Housing Benefit you get will be based on the number of bedrooms your household needs.

The rules allow one bedroom for: 

  • every adult couple (married or unmarried)
  • any other adult aged 16 or over
  • any two children of the same sex aged under 16
  • any two children aged under 10
  • any other child
  • a non-resident carer.

If you are classed as having one or more extra bedrooms your Housing Benefit may be reduced. This is called ‘under occupancy'. Your Housing Benefit will be reduced by:

  • 14% for under-occupancy by one bedroom
  • 25% for under-occupancy by two bedrooms or more.

Find out if you’re affected by the ‘bedroom tax’ from Shelter.