Benefits

The benefits system is changing. The Welfare Reform Act is a new legislation brought in by Central Government with the aim to make the benefits system simpler. 

This section of the website will help you understand the changes and how they will affect you. 

WMBUS Welfare Reform Video

This video has been created by the West Midlands Best Use of Stock (WMBUS) partnership to explain the major Government Benefit changes.

Change 1: Housing benefit in future will be paid based on your assessed housing need, NOT how much your rent is.

From 1 April, 2013, if you are of working age you will no longer be paid full housing benefit if you are assessed as under-occupy your home.

What is under-occupying?

Under-occupying means that you have been assessed as having more bedrooms than the Government thinks you need.

Who is entitled under the new rules to a bedroom?

• A couple
• A person aged 16 or older
• Two children of the same sex until their 16th birthday
• Two children until their 10th birthday (any gender)
• Any other child
• Where the claimant or their partner requires over night care

Under-occupying by one bedroom? Your housing benefit will be reduced by 14%. We estimate this to be about £12.50 a week for a three bedroom home.

Under-occupying by 2 bedrooms or more? Your housing benefit will be reduced by 25%. We estimate this to be about £22.50 a week for a three bedroom home.

You will responsible for paying any shortfall in the rent on time and keeping a clear rent account.

Exemptions

The following are exempt from these underoccupying rules:

• Tenants (or their spouse) over the qualifying age for claiming pension credit (this will vary depending on when the tenant (or spouse) was born).
• Tenants who need the bedroom for a disabled child who is unable to share a bedroom.
• Tenants who need the bedroom for a non-dependant who is serving in the armed forces and plans to return to the property.
• Tenants who are approved foster carers and need the bedroom for a fostered child.
• Disabled tenants who need the bedroom for their carer to provide overnight care.
• Tenants living in a houseboat, caravan/mobile home, if it is temporary accommodation provided by the council under homelessness legislation, or supported accommodation.

You can use our handy benefit reform calculator (created by WMBUS) to see if you are likely to be affected. This calculator will only give you an idea depending on your circumstances, you may also be affected by other changes to the benefits you are entitled to such as the benefits cap.

Change 2: Your Benefits May be Capped.

• Households will receive no more than £500 per week for a family.
• Households will receive no more than £350 per week for a single person.

The government's idea is that people should be better off in work than on benefits. Some people in Wolverhampton will find that their current benefits are more than those sums and their benefits will be reduced.

By September 2013, your Housing Benefit may be cut to make sure the total amount of your benefit is not more than the cap level. You will be responsible for paying any shortfall in the rent, on time and keeping a clear rent account.

We believe that over 100 tenants will be affected, if you think this could be you, please contact us and ask for the Money Smart team now.

Change 3: Your Benefits Will be Paid Together

A new type of benefit, for working age people only, called Universal Credit, will be brought in. It will bring together the main out of work benefits, housing benefit, income support, job seekers allowance, Income Related Employment and Support Allowance, Child Benefit, Child Tax Credit, Carers Allowance (income related).

It will be paid once a month into your bank account, in the same way as a salary. It will be introduced in October 2013. At first it will be paid to new claimants and people who have a change of circumstances. Then it will be rolled out to the whole country region-by-region.

You will no longer be paid housing benefit and you will need to arrange to pay your rent yourself. You will need to ensure all your financial commitments are met. Paying your rent is a priority payment because if you do not pay it, ultimately you could lose your home.

Further information is available on the Wolverhampton City Council Welfare Reform webpages .

What can you do?

You can take steps to protect your financial future. We will be contacting tenants who are most likely to be affected, but in the meantime here are some helpful tips you can follow:

Get Advice

Find out how you and your family will be affected, talk to our Money Smart Team by calling 01902 556789.

Check your options

Make sure you are receiving the correct benefits and that your details are up to date. Contact Housing Benefits at Wolverhampton City Council. Investigate what options are open to you - for example, could you move to a smaller property to save money? Could you reduce your outgoings in any other way? Could you increase your income through work? Could a grown up child contribute more financially to the household?

Calculate your benefits

Directgov have a benefit calculator to help you to get an estimate of how much your Housing Benefit could be reduced by if you exceed the level of the benefit cap.

Reduce your outgoings

Make your home and appliances as energy efficient as possible. Visit our energy management webpages to learn more about how you can be more energy efficient and what we can do to help you.

Arrange Payments - Stay and Pay

You will need to arrange to pay your own rent. You can open a bank account and have your benefit paid into your account and your bills paid by Direct Debit . If you change to paying by Direct Debit, on changing over you could win £75 in our monthly prize draw.

Move to a Smaller Home - Homes In the City

We can help you do this. If you decide to move to a smaller home, register on Homes in the City and read our "Is your Home too Big Leaflet".

Savings and Payment Plan

You can start a savings account with the local Credit Union Wolverhampton City Credit Union to help you build up a cushion or you can start over-paying your rent so you build up credit little by little. You can even carry on paying rent over the rent free weeks that we have at Christmas and at the end of March to help build credit.

If you are already in arrears, even by a small amount, speak to us straightaway to arrange a payment plan on 01902 556789.

Avoiding Debt

Pay off (or reduce) all debt by the time the changes come in. Avoid taking on new debt.

Avoid Loan Sharks and Unauthorised Loans

Do not get tempted to use a loan shark or anyone who comes to your door to offer to lend you money. It might seem like the answer to your prayers at the time but it will get you into even more trouble in the future.

Contact Us

We know these changes can seem complicated. We want to make sure you know all you need to know to make good decisions for your future. Please contact us to set up a meeting to discuss what you can do.