Martin Lewis’ money tips: Martin talks benefit changes

With the big raft of benefit changes coming into force this week with many more to follow soon, money expert Martin Lewis discusses how these alterations could affect you and the way you live.

Take a look at the points outlined below to find out more about the changes being made to benefits and taxes below.

1. Housing benefit changes, aka the so-called "bedroom tax”

If you’re over 16 and under state pension age, on a low income and eligible for help with housing costs, renting from a council or housing association, and live in England, Scotland or Wales (Northern Ireland will follow later), this could affect you. (If not, it doesn’t ignore the fact it’s wrongly been called a tax – this is a reduction in benefit for social housing residents.)

What’s happened?

From April 1, if you have more bedrooms than the government says you need, you could have your benefits reduced, so you’ll need to cover some of the rent – 14% if your home's one bedroom too big, 25% for two or more bedrooms. This is typically a reduction of £14 a week.

Check how you’re affected on the Citizens Advice website.

2. State benefit cap

A new £500/week cap on household benefits for working age couples and single parents, or £350 a week for single people, is coming into force on April 15 in some London boroughs and between July 15 and September 30, 2013 everywhere else. Those affected will see a typical reduction of £60/week in their benefits.

Who’s affected?

Anyone living in England, Scotland or Wales of working age but not working, claiming any of the main state benefits and child tax credits.

Check how you’re affected on Gov.uk.

3. Financial help for ill or disabled people

Across the UK, the disability and health benefit currently called Disability Living Allowance is being changed to the Personal Independence Payment. You'll need to have an assessment to see if you’re eligible under the new rules. It starts on April 8 for new claims in parts of the north of England, June 10 for new claims in the rest of the UK and between October this year and 2018 for existing claims.

Check if you’re affected on Gov.uk

4. Some who had council tax benefit will now need to contribute

From April 1, for the first time, those in England (Scotland and Wales may follow in 2014) who previously got their council tax paid for through benefits may have to contribute – this could be around 10% of the bill. This is crucial to understand as council tax is a priority payment and you can be taken to court if you don’t pay it. Check how you’re affected on the Council Tax Support website.

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