Welfare Reform Act 2012

A Bill to make provision for universal credit and personal independence payment; to make other provision about social security and tax credits; to make provision about the functions of the registration service, child support maintenance and the use of jobcentres; and for connected purposes.

The Bill provides for the introduction of a 'Universal Credit' to replace a range of existing means-tested benefits and tax credits for people of working age, starting from 2013. The Bill follows the November 2010 White Paper, 'Universal Credit: welfare that works', which set out the Coalition Government’s proposals for reforming welfare to improve work incentives, simplify the benefits system and tackle administrative complexity.

Besides introducing Universal Credit and related measures, the Bill makes other significant changes to the benefits system.

Key areas

• introduces Personal Independence Payments to replace the current Disability Living Allowance
• restricts Housing Benefit entitlement for social housing tenants whose accommodation is larger than they need
• up-rates Local Housing Allowance rates by the Consumer Price Index
• amends the forthcoming statutory child maintenance scheme
• limits the payment of contributory Employment and Support Allowance to a 12-month period
• caps the total amount of benefit that can be claimed.

During the Committee Stage, the Government amended the Bill to provide for the establishment of a Social Mobility and Child Poverty Commission.