Last amended by Welfare Reform and Work Act 2016 in 2016. Reduced the benefit cap, froze most working-age benefits for four years, and limited child element of UC and CTC to two children.
Independent editorial summary — not the official statute text. Read the official version on legislation.gov.uk.
Summary
The Welfare Reform Act 2012 introduced the most significant overhaul of the UK welfare system in decades. Its centrepiece is Universal Credit, a single monthly payment replacing six existing means-tested benefits. The Act also replaced Disability Living Allowance with Personal Independence Payment, introduced the benefit cap, reformed Housing Benefit with the 'spare room subsidy' (bedroom tax), and established the Social Mobility and Child Poverty Commission. It aimed to simplify the benefits system and ensure work always pays.
Key Points
- Universal Credit — single payment replacing six benefits (Part 1)
- Claimant commitment — conditions for receiving Universal Credit including work search requirements (s.14)
- Sanctions regime for failure to comply with work-related requirements (ss.26–29)
- Benefit cap — limit on total household benefits for working-age claimants (s.96)
- Personal Independence Payment replacing Disability Living Allowance (Part 4)
- Under-occupation deduction ('bedroom tax') for social housing tenants (s.11)
- Council tax reduction schemes devolved to local authorities (s.33)
- Universal Credit replaces Income Support, JSA (income-based), ESA (income-related), Housing Benefit, Child Tax Credit, Working Tax Credit (Part 1)
- Claimant commitment: conditions for receiving UC (s.14)
- Sanctions for failure to meet work-related requirements (ss.26–29)
- Personal Independence Payment replaces DLA for working-age adults (Part 4)
- Benefit cap: limit on total benefits a household can receive (s.96)
- Universal Credit replaces six legacy benefits
- Benefit cap limits total household benefits
- Personal Independence Payment replaces DLA for adults
- Work capability assessments for ESA/UC
Parts & Sections
Amendments History
2016 — Welfare Reform and Work Act 2016
Reduced the benefit cap, froze most working-age benefits for four years, and limited child element of UC and CTC to two children.
2016 — Welfare Reform and Work Act 2016
Reduced the benefit cap, froze certain benefits for four years, and limited child element of UC to two children.
Frequently asked questions
- What is Universal Credit and which benefits does it replace?
- Universal Credit is a single monthly payment that replaces six existing means-tested benefits. These legacy benefits are Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Housing Benefit, Child Tax Credit, and Working Tax Credit. The system was introduced to simplify the benefits structure and ensure that work always pays.
- What happens if I do not meet the work-related requirements for Universal Credit?
- If you fail to comply with work-related requirements without good reason, your Universal Credit award will be reduced. This is known as a sanction. For repeated failures, these sanctions can last up to 1,095 days. The specific conditions for receiving the benefit are outlined in the claimant commitment you accept when claiming.
- What is Personal Independence Payment and who can claim it?
- Personal Independence Payment (PIP) is a benefit for people aged 16 to 64 who have a physical or mental condition causing difficulty with daily living activities or mobility. It replaced Disability Living Allowance for new working-age claimants. PIP includes a daily living component, which is paid at a standard or enhanced rate depending on the extent of your limitations.
- What is the 'bedroom tax' and how does it affect my housing costs?
- The 'bedroom tax', or under-occupation deduction, applies to social housing tenants who have spare bedrooms. Under the Welfare Reform Act 2012, the amount of Universal Credit allocated for housing costs may be reduced if your accommodation includes unused rooms. This deduction is designed to address under-occupation in social housing.
- What is the benefit cap?
- The benefit cap limits the total amount of benefits a working-age household can receive. It was introduced by the Welfare Reform Act 2012 to ensure that total household benefits do not exceed a specified threshold. Subsequent legislation, such as the Welfare Reform and Work Act 2016, further reduced this cap.