Changes to work allowances in April 2016

Will the changes to work allowances apply to new claimants only from April 2016 or will all claimants have their benefit reduced at this point to reflect new allowances?

It looks like they apply from the first assessment period that begins on or after 11 April 2016. Reg 2 of the amending regs says -

(2) Where the amendments made by these Regulations apply in respect of an existing award of universal credit, they have effect for the purposes of that award—

(a)on 11th April 2016 if there is an assessment period for that award that begins on that day; or

(b)if sub-paragraph (a) does not apply, on the first day of the next assessment period for the award beginning after that day.

(3) For the purposes of this regulation, “existing award of universal credit” means an award of universal credit that exists on 11th April 2016.

Not good news!

Indeed not - goes from bad to worse…
Can’t we get Jeremy to have a word with IDS?

The impact of complete removal of work allowance means the ‘better off by’ will be determined on the taper which means worse off if compared to current disregard and taper. Shocking when the point of UC was it would make work pay. Current disregard for single claimants has never increased since 1988.

A quick calculation about the effect of the reduction in the work allowances gives some nasty results.

Where previously there were some allowances for all those with earnings there are now none at all unless there are children or disabilities.

For those who still qualify it’s now:

£2,304pa or £44.30 a week where there are housing costs
£4,764pa or £91.61 a week where there are no housing costs

That translates into a cut in actual Universal Credit, for those who could have used the full previous allowance, of, per week:

Couple with children – £20.63 with no housing costs or £4.41 with housing costs

Couple with limited capability for work £37.24 with no housing costs or no effect with housing costs

Couple with neither children or disabilities – £16.61 with or without housing costs

Single with children – £50.25 with no housing costs or £10.55 with housing costs

Single with limited capability for work £37.24 with no housing costs or no effect with housing costs

Single with neither children or disabilities – £16.61 with or without housing costs

Factor in the possibility of the taper being increased from 65% to 75% - making people worse off than they are in a system with most earnings disregards set nearly 30 years ago - shocking