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WELFARE

Tax credits income thresholds and universal credit

work allowances

The tax credits income threshold will be reduced from £6,420

to £3,850 a year from April 2016. Work allowances in universal

credit will be abolished for childless claimants who are not

disabled and will be reduced for many other claimants.

Child element in tax credits and universal credit

The child element of tax credits and universal credit will no longer

be awarded for third and subsequent children born after 6 April

2017. This will also apply to families claiming universal credit for the

first time after April 2017. Transitional protections will be introduced

to cover children with disabilities, temporary claims interruptions,

multiple births and other special circumstances. Consequential

changes will be made in housing benefit from April 2017.

Income rise disregard in tax credits

From April 2016 there will be a reduction from £5,000 to £2,500

in the amount by which a claimant’s income can increase in-year

compared with their previous year’s income before their award is

adjusted (the ‘income rise disregard’).

Taper rates for tax credits

From April 2016 the tax credits taper rate will be increased from

41% to 48% of gross income.

Employment and support allowance

From April 2017 new claimants of employment and support

allowance who are placed in the work-related activity group will

receive the same rate of benefit as those claiming jobseeker’s

allowance.

Tax credits, universal credit and housing benefit – first

child

From April 2017 the family element in tax credits and the

equivalent in universal credit will no longer be awarded when a

first child is born. Transitional protections will be introduced to

cover children with disabilities, temporary claims interruptions

and other special circumstances.

page 13

BUDGET

8 JULY 2015