Legislation Update: Welfare Reform

The Benefit Cap (Housing Benefit and Universal Credit) (Amendment) Regulations (Northern Ireland) 2016

These new regulations come into operation on 7th November 2016. They make further amendments to the Housing Benefit Regulations (NI) 2006 and the Universal Credit Regulations (NI) 2016. The Welfare Reform (NI) Order 2015 allowed for the introduction of the benefit cap on 31st May 2016. The rates of the benefit cap were set at £500pw for a couple and households with children and £350pw for single adult households without children. These new regulations reduce the level of the benefit cap further to £384.62pw for couples and lone parents and £257.69 for single people. It is estimated that this reduced benefit cap will affect over 2,000 households in Northern Ireland.

The regulations also introduce the ability of social tenants to be able to apply for a Discretionary Housing Payment where they are affected by the lowered cap.

A number of households are already exempt from the benefit cap e.g. someone in receipt of DLA or a carer’s allowance. The regulations add a further exemption so that households in receipt of a guardian’s allowance will also be exempt.

The Welfare Reform and Work (Northern Ireland) Order 2016

One of the main features of this new Order is the freezing of certain working-age social security benefits and tax credits for 4 financial years. A number of sections of the Order came into effect on 13th October 2016. The impact of the Order means that the current rates of Housing Benefit, Income Support, Jobseeker’s Allowance, Employment Support Allowance, Universal Credit (when implemented), and most elements of working tax credit will remain the same until reviewed in the financial year 2019/20.

The Order also (please note these following clauses are not yet enacted):

• Allows the Department for Communities to make regulations to change the nature of Support for Mortgage Interest from an award to a loan.
• Limits the child element of Child Tax Credit and Universal Credit to a maximum of two children in each household
• Removes the work-related activity component in Employment and Support Allowance.