3 Jan 2013

2013: How will my benefits change?

As the coalition government wrestles with an £83bn round of spending cuts to get the UK economy back on track, Channel 4 News looks at cuts to benefits coming into force this year.

A raft of cuts aimed at benefits across all sections of UK society come into force in the course of 2013.

Some Tories claim benefits form “24.2 per cent of the UK’s total income”, and as recently as this week criticised Labour’s introduction of tax credits, with Work and Pensions Secretary Iain Duncan Smith saying they had resulted in “a sorry story of dependency, wasted taxpayers’ money and fraud”.

Among this year’s more controversial cuts include the scaled withdrawal of child benefit where a household earns more than £50,000.

Here is a list of the changes.

7 JANUARY 2013


  • CB withdrawn where someone in a household has an income of more than £50,000
  • CB withdrawn at 1 per cent for every £100 earned over £50k

APRIL 2013


  • CTB is to be replaced by “localised support” through local councils
  • the change aims to reduce the annual CTB bill by 10 per cent
  • pensioners are protected against reduction in support


  • DLA is to be replaced by the personal independence payment (PIP)
  • PIP will involve introduction of “objective assessments” to decide eligibility
  • the government hopes for a 20 per cent reduction in expenditure by 2017


  • People in social sector housing larger than they need must move or make up the difference in rent because housing benefit will be reduced
    – by 14 per cent if they under-occupy by one bedroom
    – by 25 per cent if they under-occupy by two or more bedrooms
  • Those of pension credit age will not be affected by the changes
  • Local housing allowance (LHA) rates are to be increased in line with the consumer price index, not local market rents


  • Crisis loans, given when waiting for benefit claims to be processed, are to be replaced by “payment on account”
  • Other crisis loans/community care grants abolished


  • a rise in income of £5,000 or more (previously £10,000 or more) will be taken into account when finalising a person’s tax credit.


  • will limit benefits to the average net earned income of working households, estimated to be –
    – £350 per week for a single adult with no children
    – £500 per week for a couple or lone parent, regardless of the number of children they have



  • Current system of working-age benefits and tax credits replaced by the universal credit. Moving over to UC should be completed by October 2017