The budget this year was relatively quiet in terms of big changes to the Benefits System. There was mention that the overall Social Security budget would be capped at some point in the future. Key Benefit announcements are-
· From 2016 the current State Retirement Pension will be replaced for new claims by a Single Tier State Pension. It will be worth £144 in today’s money. Gainers should be women, the self employed, carers and the low paid. This change is one year earlier than originally planned. para. 1.187
· From 2016 the second state pension will be abolished. This will coincide with getting rid off the contracted out rate of National Insurance Contributions. This will mean an increase in class 1 contributions for those who are currently contracted out of 1.4%(and their employers of 3.4%). para. 2.80
· Universal Credit and Personal Independence Payments are confirmed as non taxable. Para. 2.38 & 2.81
· Social Care costs- reasonable care costs capped at £72,000. para.1.195
· Extra £200 million available for child care costs under Universal Credit. At present the plan is for 70% of child care costs to be paid up to a maximum (similar to that under Working Tax Credit). The extra money is said to mean the equivalent of a move from 70% to 85 % of child care costs being paid under Universal Credit. It’s not specified how this will happen. Para. 2.87
· A new tax free childcare costs scheme worth 20% of costs up to a maximum of £1200 per year. For those not getting child care costs help under Working Tax Credit. Para 1.179
· From April 2013, exemption for car tax of 50% for those on the low rate mobility component of PIP. Those on high rate will get 100% exemption (as currently with DLA). para. 2.82 click here