The benefit cap comes into effect in April 2013 and will limit the amount of benefit couples and lone parent households can receive to around £500 a week or £26,000 a year – the equivalent of the average household income after tax or a gross household salary of £35,000.
Benefit claims for single people will be limited to around £350.
Lord Freud (Minister for Welfare Reform) said:
“These reforms will restore integrity and fairness to a system that is failing the very people it was supposed to help. We are now writing to all claimants who are affected by the benefit cap setting out the exemptions and offering intensive advice on a supported return to work for those who are affected - but our message is clear, from April 2013, the state will no longer pay households more than the average wage in benefits.”
The benefit cap will not affect a household if a member qualifies for Working Tax Credit, increasing the incentive to find work.
Although employers do not have any direct obligations in relation to the introduction of the Benefit Cap, the CIPP Policy team have been asked a variety of questions by members in relation to the Welfare Reforms. The introduction of Universal Credit in October 2013 is driving the timeline for Real Time Information as the DWP require household income information to correctly administer the new system. Employers are pre-empting the likelihood of their employees seeking help from their payroll department so having some knowledge of the reforms can only be beneficial.
Visit the DWP website for further information on the Benefit Cap and Welfare Reforms .
ICAEW VOICES CONCERNS OVER CHILD BENEFIT PLANS
16 May 2012
The Institute of Chartered Accountants for England and Wales has told the Treasury that the controversial plan to withdraw the benefit from families with a high earner “is seriously flawed in principle and in practice”.
The Daily Telegraph reports :
In a confidential report seen by The Daily Telegraph, it urged ministers to rethink the plans when the Finance Bill is voted on by MPs later this month. The institute, which represents 116,000 chartered accountants, claimed that unless the Government found a more workable alternative, the tax plan could be an “operational and reputational disaster”. The popular benefit is worth £20.30 a week for the first child and £13.40 a week for every sibling. It is taken up by 97 per cent of eligible parents. But from January, any family with a parent earning more than £50,000 a year will lose a proportion of their entitlement. Any family with a single earner on more than £60,000 a year will not receive it at all. The institute claimed that the plans were doomed because it involved combining the benefits system, which is based on households, and the tax system, which is based on individuals. This meant “using the tax system to claw back from one individual a benefit paid to another”, it said. An additional 500,000 people would have to fill out self-assessment tax returns, the institute warned. HM Revenue & Customs would have to claw back wrongly paid child benefit
CIPP Policy News Journal
12/04/2013, Page 355 of 362
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