April changes to benefits

Each April, the Government introduces a number of changes to social security benefits. We recently updated Housing Law in Practice NI with these changes:

Increase in non-dependant deduction rates

One of the biggest changes in this year’s benefits uprating is to the levels of non-dependant deductions for rent and rates. It is important to note that it is not only the level of actual deductions which has changed but also the income bands which are applied to the non-dependant when determining how much of a contribution they have to make. Deductions for rent now range from £14.65 per week to £94.50 per week, whilst deductions for rates vary from £3.30 per week to £9.90 per week. Income bands also vary between rent and rates, so bear this in mind when advising clients on what contribution they may need to make. These changes apply from 4 April 2016.

Personal allowances

From 4 April 2016, some of the personal allowances used for calculating Housing Benefit have also changed. All personal allowances for people aged 65 or over have increased, regardless of their marital status.

Support for Mortgage Interest (SMI)

Important changes have come into effect regarding access to help through SMI. SMI provides assistance with eligible housing costs, e.g. mortgage interest, to owner occupiers who are in financial difficulty.

Following the implementation of the Social Security (Housing Costs Amendments) (NI) Regulations 2015 on 1 April 2016, a new longer waiting period will apply before an applicant will actually get help through SMI. The increase will be from 13 weeks to 39 weeks. An exception to this rule is claimants who are in receipt of Pension Credit. These claimants will receive help immediately and will not have to complete a waiting period.

Advisers should also be aware of the following changes, due to be implemented in the near future. 

Benefit Cap

As part of the Government’s changes to the social security system, the Welfare Reform (NI) Order 2015 and the Benefit Cap (Housing Benefit) Regulations (NI) 2016, will introduce a benefit cap for working-age claimants on 31 May 2016. The benefit cap will be set at either:

• £500 per week if the household consists of a couple (with or without children), a lone parent with children living with them; or
• £350 a week for a single person with no children living with them.

No household can receive more than £26,000 per year in benefits.

Where a claimant in receipt of Housing Benefit, would have an income exceeding the benefit cap, their level of Housing Benefit will be reduced to ensure that they only receipt up to the benefit cap. The cap will not apply to certain claimants, including those in receipt of Working Tax Credit or some disability benefits – see our article on the Benefit Cap for more detail of these.

Anyone who comes within the remit of the benefit cap will see it applied within 3 months of its introduction on 31 May 2016. Households will be informed by the Northern Ireland Housing Executive if their Housing Benefit award will be reduced to meet the benefit cap.

The Cap will initially be mitigated as part of the NI Executive’s Mitigations Working Group recommendations, until 31st March 2020.

Anyone who is unhappy with the decision to reduce their Housing Benefit as a result of the benefit cap should request a revision of the decision.

Support for Mortgage Interest

Once Universal Credit is introduced in Northern Ireland (initial pilot is planned for September 2016), SMI will not be payable to any household receiving UC, if the claimant or their partner is undertaking any paid work. The government is also proposing to change SMI from a benefit into an interest-bearing loan from 1 April 2018.

Backdating of Housing Benefit

There are plans to reduce the time period in which an application for the backdating of HB can be made. Currently, a working-age claimant cannot get their HB backdated for more than 6 months. The new time limit will reduce this to one month. This has already come into effect in GB, but is not likely to be implemented in NI until after the Assembly elections.

Give advice? Make sure you’re up-to-date

Housing Law in Practice NI is a unique comprehensive resource on housing in Northern Ireland. Members of Housing Rights get free access to it. If you are interested in becoming a member contact Frances on 028 9024 5640 to find out more.