Budget 2015 update
- Category: Latest news
- Created: Wednesday, 08 July 2015 11:48
£12 BILLION BENEFITS CUTS REACHED
“Taken together, all the welfare reforms I’ve announced will save £12 billion by 2019/20 and will be legislated for in the year ahead, starting in the ‘Welfare Reform and Work Bill’ that will be published tomorrow.”
Rents in social housing sector to be reduced by 1% a year for the next four years.
Social housing tenants who earn more than £40,000 in London or £30,000 outside london will be forced to pay the market rent for their home.
Income threshold at which tax credits start to be withdrawn to be reduced from £6,420 to £3,850. The taper rate will be raised to 48%. Income rise disregard will be reduced from £5,000 to £2,500.
Support from tax credits and universal credit will be limited to two children. Families who have a third or subsequent child after 2017 will not receive additional payments for that child.
'Similar changes' to be made for housing benefit.
Tax credit spending will be returned to 2007/08 levels in real terms.
HOUSEHOLD BENEFITS CAP
The household benefit cap will be lowered from £26,000 nationally to £23,000 in London and £20,000 in the rest of the UK. The DWP’s very conservative estimate is that an additional 90,000 households will be hit and that an additional 40,000 children will be forced into poverty as a result. Many families are likely to face eviction.
SUPPORT FOR MORTGAGE INTEREST PAYMENTS
Support for mortgage interest payments changes from a benefit to a loan
WORKING AGE BENEFITS
Working age benefits to be frozen for 4 years. PIP, DLA and ESA support group excluded from freeze.
ESA Work-related activity group . For future claimants only, ESA WRAG will be paid at same rate as JSA. Osborne says:
"No current claimants will be affected by this change"
“The welfare system should always support the elderly, the vulnerable and disabled people.”
“We will not tax or means-test disability benefits.”
“Those who can work will be expected to look for work and take it when it is offered.The best route out of poverty is work.”
“For those aged 18-21 we’re introducing a new youth obligation that says they must either earn or learn.”
“We’re also abolishing the automatic entitlement to housing benefit for 18-21 year olds. There will be exceptions made for vulnerable people and other hard cases.”
No inheritance tax on the first £1 million. Not something that will affect many of our members, but they will be paying for it from benefits cuts.
STUDENT MAINTENANCE GRANTS
Maintenance grants for students whose families are on low incomes will be scrapped from 2016/17 yearand replaced by loans.
EXTENT OF CUTS
Osborne says £17bn of savings will be announced today, out of £37bn needed. £12bn will come from benefits cuts and £5bn from tackling tax avoidance.
Benefits and Work will be keeping you posted about budget measures most likely to affect our members.
At the moment, there is speculation that:
- The £12 billion in cuts will be spread over three years instead of two. £8 billion will be cut by 2017/18 and a further £4 billion by 2018/19.
- The household benefit cap will be lowered from £26,000 nationally to £23,000 in London and £20,000 in the rest of the UK. The DWP’s very conservative estimate is that an additional 90,000 households will be hit and that an additional 40,000 children will be forced into poverty as a result. Many families are likely to face eviction.
- Tax credits for people in work will be cut, possibly by cutting the amount of tax credits paid to families with more than two children.
- Social housing tenants who earn more than £40,000 in London or £30,000 outside london will be forced to pay the market rent for their home.
- Tenants will be obliged to pay the first 10% of their housing benefit themselves.
- Maintenance grants for students whose families are on low incomes will be scrapped and replaced by loans.
- Personal independence payment (PIP) and disability living allowance (DLA) will be subject to income tax.
- The work-related activity component of employment and support allowance (ESA) will be abolished, meaning a cut of £29.05 a week for claimants in the work-related activity group.
Which of these will prove to be correct, we will find out this afternoon.