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UPDATE: This article was published in November 2015. Make sure you’re up to date with the 2016 benefit changes and how they may affect you.
If you’ve been worried about the effects of the changes to tax credits due in the spring, then you’ll hopefully be breathing a sigh of relief today. The Chancellor George Osbourne announced a U-turn on the proposed changes in the Government’s Autumn Statement yesterday. But what else was announced during his 80-minute speech?
The Government’s Autumn Statement and Comprehensive Spending Review isn’t a page turner. But it affects the finances of a lot of people up and down the country. That’s why we asked our Policy team to try and explain the changes in language that even the MoneyAware team would understand.
At a glance it looks like this…
Potentially positive for you:
Potentially negative for you:
Other things to be aware of:
Let’s look at these in more detail…
The proposed changes we detailed in our Benefits Changes 2016 article in the summer are not going to go ahead in 2016. You may have picked up from the news yesterday that this went further than most were predicting, but with criticism from within their own ranks, it was likely that something would be announced by the Government. Pundits were a bit surprised at the Chancellor saying, in essence, “Let’s call the whole thing off”.
The changes to Universal Credit announced in the last Budget (also detailed in our Benefits article linked above) will still go ahead in 2016-17. This means that the equivalent to tax credit income thresholds in Universal Credit, known as work allowances, will be reduced to:
The impact of this is unknown at the moment, especially because there will be two systems that people could be accessing as Universal Credit is rolled out. Some will still be in the current benefit system and some will be transferred to or be new claimants of Universal Credit.
These changes were widely expected, but confirmation came yesterday that…
The government will extend the Warm Home Discount to 2020-21 at current levels of £320 million a year, rising with inflation. Find out if you qualify for Warm Home Discount.
The ‘minimum income floor’ is the amount the Department for Works and Pensions normally assumes you’re earning if you’re self-employed and claiming Universal Credit. If you earn less than this minimum income floor you won’t get any more Universal Credit to make up the difference.
Changes in the Autumn Statement mean that self-employed people who are earning nothing or very little on a monthly basis will be assumed to be earning a higher amount than previously, and their Universal Credit award will be reduced accordingly.
There were many other changes announced in the Autumn Statement but we think that those listed above were the main ones that could impact your day-to-day life.
However we’d encourage you to read our Benefit Changes 2016 for more details on the changes announced in the Budget earlier this year. We’ve updated it in light of yesterday’s announcements.
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