Child Poverty Action Group

The Welfare Reform and Work Act received Royal Assent last week. Now it’s here, when do its key provisions come into force?

Which changes kick in this week?

1. Benefit cap

The Secretary of State now has powers (and the ability to make regulations) to introduce the new benefit cap levels (the Government says it will reduce the cap to £23,000 a year for households in London, £20,000 for those outside London).

The DWP has said it will publish rollout plans after Royal Assent, but the new levels are expected to be rolled out from autumn 2016.

2. Tax credits and benefits freeze

Child benefit has been frozen at £20.70 (first child) and £13.70 until 5 April 2020. This would mean the real value of child benefit having fallen by around a quarter over the decade.

Other benefits and tax credit amounts are also frozen in cash terms.

Which changes have force in 2 months time?

The Act effectively repeals the Child Poverty Act, renaming it the ‘Life Chances Act’. It scraps the targets, measures, reporting duties and requirements for national and local child poverty strategies.

The Act also introduces new reporting requirements on full employment, apprenticeships and on life chances (workless households and educational attainment).

The Social Mobility & Child Poverty Commission will be repurposed and renamed the Social Mobility Commission.

These changes come into force 2 months after Royal Assent – 16 May 2016. This may be a smart bet for the day the life chances strategy and the next child poverty figures are published.

The reporting obligation on troubled families will come in at an unspecified time.

The duty on the Secretary of State to publish child poverty statistics, secured through campaigning by CPAG and others, also comes into effect on 16 May 2016.

Which changes come into effect from April 2017?

From 6 April 2017, a maximum of two children in family will be eligible for child tax credit.

The broadly equivalent restriction to Universal Credit is also expected to take effect on new claims from April 2017 - but, unlike with tax credits, this requires a commencement order before it takes effect. For both tax credits and UC, ministers have promised to make exceptions for rape victims, multiple births, kinship carers and adopted sibling groups. These exceptions will need to be made by regulation.

The first child premium in Universal Credit may go at the same time, although the timing has not yet been indicated.

The cut in support for those in the Work Related Activity Group of the Employment and Support Allowance is expected to take effect in April 2017 – this also requires a commencement order.

What about the other measures in the Act?

At the moment, we don’t know when the Act’s other provisions, such as those on social rents, will come into force. The Act allows the Secretary of State to bring into effect, via regulation, other measures when he or she wants.