The Welfare Reform Programme Is Is It It Working? Maggie - PowerPoint PPT Presentation

The Welfare Reform Programme Is Is It It Working? Maggie Fitzsimons Benefits Training & Consultancy

Main Aspects of Welfare Reform • BEDROOM TAX • BENEFIT CAP • PERSONAL INDEPENDENCE PAYMENTS • LOCALISING COUNCIL TAX BENEFIT • UNIVERSAL CREDIT • BENEFITS UPRATED BY LOWER THAN INFLATION- FUTURE OVERALL BENEFIT CAP

Bedroom Tax (Spare Room Subsidy) POLICY INTENTION • RELEASE LARGER PROPERTIES – BETTER USE OF SOCIAL HOUSING • SAVE MONEY

HAS IT WORKED- ONE YEAR ON? • 11% OF HB RECIPIENTS AFFECTED • 28% OF THOSE AFFECTED HAVE FALLEN INTO RENT ARREARS FOR FIRST TIME • BBC SURVEY SAYS ONLY 6% OF TENANTS AFFECTED HAVE MOVED

WHAT’S BEEN HAPPENING? • BEDROOM TAX LOOPHOLE – discovered December 2013- Closed March 2014 • People who had been on HB since before January 1996. Two week gap allowed. • DHPs paid cannot be claimed back

CASELAW- Bedroom Tax • Meaning of bedroom • Many successful Bedroom Tax Appeals at First Tier Tribunal • Size • Use • Necessary for children- Human Rights

Second Tier Tribunal • ONE CASE INVOLVING MEANING OF BEDROOM UNDER LOCAL HOUSING ALLOWANCE

Court of Appeal • The Court of Appeal Judges found that these housing benefit regulations discriminate against adults with disabilities, who have a need for accommodation larger than the rules allow because of their disability. • However, the court was satisfied that the Secretary of State for Work and Pension had justified the discriminatory effect of the policy.

BENEFIT CAP • £500 PER WEEK – COUPLES WITH CHILDREN - SINGLE PARENTS - COUPLES NO DEPENDENT CHILDREN • £350 PER WEEK – SINGLE PEOPLE WITH NO DEPENDENT CHILDREN

POLICY DRIVERS FOR BENEFIT CAP • RESTRICT WELFARE PAYMENTS TO AVERAGE EARNINGS * FAIR * SAVE MONEY * IMPROVE WORK INCENTIVES

HOW MANY PEOPLE AFFECTED ? 36,471 households have had their payments capped, of which 17,102 - nearly half- have been in London.

THOSE WHO CEASED TO BE AFFECTED • 10,920 households who had previously been capped were no longer subject to the cap as at January 2014 • 36 per cent were exempt due to an open working tax credit claim; • 13 per cent were claiming less housing benefit; • 15 per cent stopped claiming housing benefit altogether. • seven per cent became entitled to a disability or sickness benefit.

Possible changes to Benefit Cap • Regionalise- different caps for different areas • Reduce the cap overall

PERSONAL INDEPENDENCE PAYMENTS • TO REPLACE DISABILITY LIVING ALLOWANCE CARE AND MOBILITY • FOR THOSE AGED 16-64 • INTRODUCED FOR NEW CLAIMS JUNE 2013 • SLOW ROLL OUT AND TRANSFER

PERSONAL INDEPENDENCE PAYMENTS • POLICY INTENTION TO INTRODUCE AN ACCURATE AND OBJECTIVE TEST TO THIS REPLACEMENT BENEFIT • CURRENT NUMBER CLAIMING DLA -2 MILLION OF WORKING AGE • GOVERNMENT EXPECTING 500,000 TO LOSE ENTITLEMENT

Personal Independence Payments • DWP expects to make savings of £3 billion a year from its introduction of PIP, with 600,000 fewer people receiving support by May 2018 than if it had not replaced DLA.

Personal Independence Payments- March 2014 • The current service to personal independence payment (PIP) claimants is 'unacceptable', according to the Work and Pensions Select Committee. • The Committee highlights that some claims for PIP are taking six months or more to process and calls for urgent action to improve the current ' unacceptable ' service to claimants.

National Audit Office • The report also found that the administration cost of a new PIP claim was £182, more than three-and-a-half times the cost of a DLA claim (£49), while the average time for a decision on a new PIP claim was 74 days, compared with 37 days for DLA.

Univ iversal Credit • SLOW ROLL NATIONAL ROLL OUT • 10 PILOT AREAS WITH VERY LIMITED NUMBERS OF CLAIMANTS • IT PROBLEMS

Universal Credit Pilots • TAMESIDE, WIGAN, WARRINGTON AND OLDHAM- APRIL/JULY 2013 • HAMMERSMITH- OCTOBER 2013 RUGBY AND INVERNESS- NOVEMBER 2013 • BATH AND HARROGATE- FEBRUARY 2014 • SHOTTON – APRIL 2014

UNIVERSAL CREDIT STATISTICS • By December 2013 - 3,780 people claiming • 7 out of 10 claims single under 25. • 50 claims outside the pilot areas • Final numbers on UC to be 8 million

WHO CAN CLAIM IN THE PILOTS? • NEW JOBSEEKERS ,-SINGLE , NO CHILDREN, NO COUPLES, NOT ILL OR ON AN EXISTING BENEFIT . • SUMMER – TO BE EXTENDED TO COUPLES, AUTUMN PEOPLE WITH CHILDREN • PILOTS TO EXTEND ACROSS THE NORTH OF ENGLAND

UNIVERSAL CREDIT (housing costs) • Monthly in arrears • Direct to tenant but possible ‘Managed Payments’ • Exempt accommodation to stay in Housing Benefit • Specified accommodation – three new groups to be excluded from UC from 3 rd November. Refuges-local authority hostels and where care provided by someone other than landlord

WELFARE FUNDS • DWP INTEND TO WITHDRAW FUNDING FOR LOCALISED WELFARE SCHEMES FROM APRIL 2015 • WILL BE UP TO LOCAL AUTHORITIES TO DECIDE TO WHETHER CONTINUE

REMOVAL OF ENTITLEMENT TO HB FOR EEA NATIONALS • 1 ST Jan 2014 no JSA(IB) for EEA nationals until 3 months residence • 1 st April 2014 – extended to HB even if they are entitled to JSA(IB) • Some exemptions

Budget 2014 • 7 day waiting period for new claims for ESA from October 2014 • Increase compliance on EEA migrants that they are entitled to Child Benefit and Child Tax Credit • Carer’s Allowance earnings limit to £102 from May 2014 • HMRC more powers to collect tax credit debt • support for Mortgage interest at current level to March 2016 • More help for childcare through Universal Credit

GOVERNMENT ON THE WELFARE CAP From now on, any government who want to spend more on welfare will have to be honest with the public - honest about the costs - and secure the approval of Parliament in order to breach the cap. Twenty- six benefits will be controlled by the welfare cap as part of our long- term economic plan to restore sanity to the public finances. George Osborne March 2014

EFFECT OF WELFARE SPENDING CAP • Pensions and Jobseekers Allowance + HB for Jobseekers will be outside the cap. • Any reductions will fall on the vulnerable • DISABLED, SICK AND CARERS AND CHILDREN