Welfare reform

The benefits and tax credits system is undergoing significant changes. The information provided explains these changes so you understand how this may affect you.

If you’re concerned or simply considering your options, find out what help and support is available.

Universal Credit

What is Universal Credit?

Universal Credit (UC) is a new means tested benefit designed to replace several existing “legacy benefits” for working age residents. The legacy benefits being replaced are:

  • Housing Benefit
  • Jobseekers Allowance (Income Based)
  • Employment Support Allowance (Income Related)
  • Tax Credits
  • Income Support.

People of pension are not affected by Universal Credit.

Who is affected?

Currently most working people who need to make a new claim for any of the legacy benefits listed above will have to claim Universal Credit instead.

However, families who have more than two dependent children are currently unable to claim Universal Credit. These families will still be able to make a new claim for any of the legacy benefits listed above.

If you currently receive any of the legacy benefits, you will continue to do so until there is a change in your circumstances that requires you to make a new claim:

  • For example, if you currently claim Jobseekers Allowance, when you start work, instead if claiming Working Tax Credit, you will be required to claim Universal Credit.
  • Similarly, if you get Jobseekers Allowance and are expecting your first child, when the child is born, instead of claiming Child Tax Credit, you will need to claim Universal Credit.

How does Universal Credit work? 

Universal Credit is assessed and paid by the Department for Work and Pensions. It has two elements:

  • Living Costs - which replaces JSA/IS/ESA and Tax Credits.
  • Housing Costs - which replaces Housing Benefit for those pay rent for their accommodation

The two elements are calculated together and paid as a single monthly payment. This is usually paid directly to the claimant, but there is scope to have the rent deducted from the monthly Universal Credit payment and paid direct to the landlord.

People receiving Universal Credit who live in either:

  • Accommodation where the rent includes charges for care an support or
  • Temporary homeless accommodation provided by the council.

Will only get Universal Credit for their Living Costs and will need to claim Housing Benefit to help pay their rent.

Is Universal Credit available for people who work?

Universal Credit is available regardless of whether or not you are working. It is means tested which means the amount a person gets will depend on a number of factors, including family size, disability and any other income or savings they may have.

For those who are working, Universal Credit replaces Working Tax Credit and the amount they earn will be used to help assess how much UC they are entitled to.

Resident support outreach team

The council has appointed a team of outreach officers who will be working to support residents making the move to Universal Credit. These officers will be in various locations across the borough. Please get in contact via the referral form or email address below and we will let you know the nearest location to you.

You can refer yourself or someone else for support from the team now.

For more information or to book an appointment with the team please contact: lbthresidentsupport@towerhamlets.gov.uk.

Are you ready?

  • most people will be paid Universal Credit once a month direct to their chosen account
  • you'll get a single payment for your household
  • if your Universal Credit includes rent you'll need to pay this to your landlord yourself
  • you'll be expected to make your claim online.

Contact Toynbee Hall debt and money advice services on 020 7392 2989 or via email money@toynbeehall.org.uk for advice and help setting up a bank account and direct debits.

The council’s benefits service can provide information about your Housing Benefit, Council Tax Reduction, entitlement to discretionary housing payments and free school meals

The Money Advice Service, which was set up by the government to provide free and impartial advice services, has produced a video which could also help you prepare for Universal Credit.

Benefits cap

The government has introduced a benefit cap, which is a limit on the total amount of benefits that households of working age can receive.

The cap adds together all the money you receive from out of work benefits including housing benefit.

This cap limits your total benefits to:

  • £296.35 maximum per week if you’re single without children
  • £442.31 maximum per week if you’re a couple or lone parent regardless of the number of children you have.

The cap will not apply if:

  • you or your partner gets Working Tax Credit.
  • you are pension credit age - so if you are over 61½ in April 2013
  • you, your partner or any children you are responsible for who receives Disability Living Allowance, Personal Independent Payment, Attendance Allowance or the support component of Employment Support Allowance.

We encourage you to look for work of at least 24 hours a week (16 hours if you are a single parent). This is the best way to avoid the impact of the cap.

Get  help finding work with information on local organisations that provide employment support to residents. 

If you're not sure how the cap affects you, call the Housing Benefits team on 020 7364 5000.

Spare bedroom subsidy (bedroom tax)

The bedroom tax will affect:

  • people of working age on Housing Benefit who are
  • living in council or other social housing
  • with more bedrooms than the government say they need.

If you have one bedroom spare, your Housing Benefit will be cut. This will be by 14 per cent of the weekly rent, or around £17 a week – depending on your rent. You will need to pay the difference to your landlord.

Disability Living Allowance (PIP)

Personal Independence Payment (PIP) is replacing Disability Living Allowance (DLA) for people aged 16-64 with long term health conditions or disabilities. PIP: 

  • will help towards the extra costs associated with long term health conditions or disabilities
  • is paid based on how a person's condition affects them with daily living activities and/or mobility
  • is payable to people who are both in and out of work.

If you receive DLA you can start making a claim for PIP. You will need an assessment to decide what level of support you receive. Eligibility for PIP is assessed on a points system related to how someone carries out a range of daily living and/or mobility activities.

Visit the government website for more information on Disability Living Allowance and access to the PIP checker.

Local help and support

The council’s benefits service can provide information about your Housing Benefit, Council Tax Benefit and your entitlement to free school meals. 

This covers  discretionary housing payments and the Residents' Support Scheme to provide short term assistance to people in need.

Advice services

Visit the advice services page or download the advice agencies leaflet for a list of helpful organisations. 

Money matters

Visit the money matters page or download the  money management support leaflet for information on money issues including budgeting, access to affordable credit and help with debt problems.


The councils employment support services can provide help and support in finding work.