The government has announced changes in welfare benefit as part of the comprehensive spending review. Take a look at our guide to see how these changes may affect you.

The following changes take place from April 2012.

Child tax credit and working tax credit
Child tax credit
Working tax credit
Contributory employment and support allowance
Personal tax allowance
Making the pension age 65 for men and women/increase in pension credit age
Housing benefit
Discretionary housing payments
Help and advice

Child tax credit and working tax credit

• Tax credits will not be increased if your income drops - unless that drop is more than £2,500 (gross) per year.
• If income drops by more than £2,500 during the year the first £2,500 is disregarded. For example, if your income drops from £20,000 to £15,000 you'll have your tax credit reassessed on an income of £17,500 for that year.
• There will be a reduction in the period in which a new claim can be backdated (this also applies to some changes in circumstances). The reduction will be from 3 months to 1 month.

Child tax credit

• Upper threshold of £40,000 will be removed. Entitlement to credit will start to reduce from a lower level of income (currently there's an entitlement of £545 for the year to families whose annual earnings are up to £40,000 gross).
• Once an income is high enough to reduce the child element to nil, any further increase in income will reduce the £545 family element. This means that many people who currently get just the £545 will lose their child tax credit altogether.

Working tax credit

• Working tax credit will no longer be payable to couples (with children) working 16 hours or more a week. Couples will have to work at least 24 hours a week between them, with 1 working at least 16 hours or 1 working 24 hours or more a week.
• Currently a claim can be made if a person is over 50 and they meet certain criteria. This will no longer be possible from April 2012.

Contributory employment and support allowance (ESA)

• Payments will be limited to a maximum of 1 year for those on the work-related component.
• The limit will be imposed retrospectively. Anyone who's already been on work-related contributory ESA for 12 months by April 2012 will have their payments stopped immediately.
• Claimants can move onto income-related ESA if their household income is low enough.
• The 12 months will start from the date of the transfer if you're transferring from incapacity benefit to work-related contributory ESA.
• Contributory ESA will no longer be available to people incapacitated in youth.

Personal tax allowance

• Increases by £630 to £8105.

Making the pension age 65 for men and women/increase in pension credit age

• This is ongoing. We're waiting for further information.

Housing benefit

• There will be another increase in non-dependant deductions.

Discretionary housing payments

• These are payments that can be requested if housing benefit does not meet the full eligible rent charge. The budget for these payments will increase by £40 million. It will be targeted to areas that need it the most.

I'm affected by these changes. What should I do?

Contact us for support and advice:

North West, Greater Manchester & South West
T: 01772 666209

Midlands, North East & Yorkshire
T: 0115 969 0248

London & South East
T: 020 7843 3814

Email: incomemaximisationteam@placesforpeople.co.uk