2010 Budget highlights

Issue 215 (April 2010)

David Simmons summarises the main changes relating to welfare benefits and tax credits announced in the 2010 budget.1These are in addition to the changes already announced in the Pre-Budget Report.

Benefits

  • Maintenance of the standard interest rate used to calculate eligible mortgage interest payments for means-tested benefits at 6.08 per cent until December 2010.
  • Maintenance of the additional payment made with the winter fuel payment, worth £50 to households with a person over the state pension age for a woman and £100 household with a person over 80.
  • The exclusion, from October 2011, of the highest rents (including the most expensive 8 per cent of London properties) from the calculation of the local housing allowance.
  • The disregard of special guardianship payments as income for housing and council tax benefits.
  • The introduction of a full online service for child benefit claimants, including an electronic link between the Revenue and the General Register Office to enable claims to be made without submitting original birth certificates from 2011/12.

Tax credits

  • An increase of £4 a week to the child element of child tax credit for each child aged one and two (the ‘toddler tax credit’).
  • Provision for calculation of the child care element of working tax credit (WTC) based on fixed short periods of child care (eg, during the school holidays) rather than on an annual average.
  • Passporting people moving from employment and support allowance into work onto the disability element of WTC.
  • Extending eligibility to WTC to people aged 60 or over who are working for at least 16 hours a week (note the Pre-Budget report only extended eligibility to people aged 65 and over).

General

  • Extension of the Young Person’s Guarantee from March 2011, which guarantees a job, training or work experience to young people who are unemployed for six months.
  • The launch of the first ‘Saving Gateway’ accounts in July 2010.
  • Improved electronic links between IT systems administering different benefits to reduce incorrect payments.

 


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