At the Conservative Party conference in October 2010 the Chancellor announced that from January 2013 Child Benefit would be withdrawn from families with a higher rate taxpayer. Revised proposals were set out in Budget 2012 under which Child Benefit will instead be clawed back gradually from families with a taxpayer with an income between £50,000 and £60,000 a year.
At the moment, couples with children need only work at least 16 hours a week in order to qualify for Working Tax Credit. From April 2012, this will increase to 24 hours for most couples. Over 200,000 families will be affected, and there are concerns about the impact on those unable to increase their hours to meet the new threshold. The change does not affect lone parents, for whom the 16 hour threshold for WTC will still apply.
The Welfare Reform Bill has its Third Reading in the House of Lords on 31 January 2012. At Report Stage in the Lords, the government suffered defeats on amendments relating to under-occupation of social housing, the Employment and Support Allowance, the proposed benefit cap, and child support maintenance
This Research Paper has been prepared for the second reading of the Local Government Finance Bill 2010-12. The Local Government Finance Bill has been carried over into the 2012-13 session as Bill 4 of 2012/13. The Bill had completed its Committee Stage before the end of the 2010-12 Session and will have its remaining stages on 21 May 2012. Research Paper 12/14 considers the proceedings on the Bill before it was carried over.
Most but not all benefits are uprated in April each year, by reference to the increase in prices over the year to the previous September. The current Government has adopted the Consumer Prices Index (CPI) as the measure of inflation for uprating purposes. CPI tends to rise more slowly than the measures used. previously. The CPI for September 2011 was higher than expected, and media reports have suggested that the Government was considering changing the basis for uprating benefits. In the Autumn Statement the Chancellor announced that while benefits would increase by the full CPI from April 2011, the couple and lone parent elements of Working Tax Credit would be frozen and the child element of Child Tax Credit would increase by less than was planned.
To access most social security benefits and tax credits, a EEA national has to have a 'right to reside' in the UK. Broadly speaking, this means they must be economically active. The European Commission has stared infingement proceedings agains the UK on the basis that the test discriminates against non-UK nationals from other Member States, but the UK Government has pedged to fight any challenge.
Article discussion the implications of the June 2010 Budget Coalition Government announcement that the Consumer Prices Index (CPI) would be used to uprate benefits, and state pensions, including public service pensions.
The Commons Report Stage and Third Reading of the Welfare Reform Bill took place on 13 and 15 June. Amendments relating to the Universal Credit, housing support, the Social Fund and the Personal Independence Payment were debated, but other groups of amendments –including those on Employment and Support Allowance changes and the benefit cap – were not discussed as proceedings on each day reached the deadlines specified in the programme motion before they could be considered.
The Habitual Residence Test is applied to people (unless they are exempt categories) who have recently arrived in the country and who make a claim for certain means-tested social security benefits, or seek housing assistance from a local authority.
The Welfare Reform Bill provides for the introduction of a 'Universal Credit' to replace a range of existing means-tested benefits and tax credits for people of working age, starting from 2013. The Bill follows the November 2010 White Paper, Universal Credit: welfare that works, which set out the Government’s proposals for reforming welfare to improve work incentives, simplify the benefits system and tackle administrative complexity.
This paper has been prepared for the Second Reading debate in the House of Commons. For information on the provision in the Bill relating to the introduction of Universal Credit, please see the complementary Library Research Paper, 11/24. Besides Universal Credit, the Bill proposes a number of other significant welfare reforms, including replacement of the current Disability Living Allowance, restriction of Housing Benefit entitlement to social housing tenants whose accommodation is larger than they need, time-limiting the payment of contributory Employment and Support Allowance to twelve months, and capping the total amount of benefit that can be claimed.