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Budget report - 12 March 2008Summary of main proposals:
child benefit
From April 2009, child benefit will increase for the first child to £20 a week - a year earlier than planned.
heating
1. The Government aims to see the 5 million customers on prepayment meters given a fairer deal and energy companies to increase their support to vulnerable customers. It will work with the companies to take further action on a voluntary and statutory basis. Energy companies currently spend around £50 million a year on social tariffs. The Government want to see this rising to at least £150 million a year over the period ahead.
"Customers using prepayment meters typically pay around £55 more on their energy bill compared to standard credit, and £144 compared to direct debit. These differentials have increased since the Energy White Paper. It is not clear whether these simply reflect extra costs to the energy companies nor whether pre-payment customers are being given enough information on the availability of other tariffs. The Government believes that the time is now right to tackle this issue and is looking to Ofgem and the suppliers to bring forward proposals for treating prepayment customers more fairly. However, if sufficient progress is not made by next winter, the Secretary of State for Business, Enterprise and Regulatory Reform is prepared to use his statutory powers with a view to reducing the differential between prepayment and other forms of payment."
2. There will be an additional one-off payment of £100 to over-80s households and £50 to over-60s households in 2008-09 on top of the winter fuel payment. This will benefit around 9 million households.
housing benefit and council tax benefit
From October 2009, child benefit will not be taken into account for housing and council tax benefit purposes.
incapacity benefits
From April 2010 all existing incapacity benefits claimants will be required to take the work capability assessment. Find out more about the work capability assessment.
savings
The Savings Gateway will be introduced nationally from 2010 – Following the success of pilots in promoting saving and financial inclusion, the Saving Gateway will be introduced nationally, with the first accounts available to savers in 2010. The Saving Gateway is a cash saving scheme for those on lower incomes. Individuals in receipt of the following benefits and tax credits will be entitled to open an account in the national scheme: working tax credits; child tax credits paid at the maximum rate; income support; jobseeker's allowance; incapacity benefit; employment and support allowance and severe disablement allowance.
Savings Gateway accounts will be offered by financial institutions such as banks and building societies, and will run for two years. At the end of the accounts the Government will match (make a contribution for each pound saved) money which people have saved into their accounts. A consultation document The Saving Gateway: Operating a National Scheme, is published alongside the Budget.
tax credits
1. There will be an increase by £50 a year above inflation of the child element of the child tax credit for families on low and middle income from April 2009. This means that a family with two children, earning up to £28,000 a year, will be over £130 a year better off.
2. Roll out of new services in November and December 2008 to make claiming tax credits easier and quicker.
3. HMRC will also help customers keep their claims up to date to avoid overpayments, by proactively seeking information and making better use of the information already held.
4. HMRC will work with Children’s Centres to pilot different ways and different locations for providing advice and services
5. By the end of 2008, introduction of a new ID authentication services to help reduce tax credits error and fraud.
