Welfare Reform The story so far September 2012
Universal Credit Universal Credit is being introduced in October 2013, at the earliest, to replace: • Job Seekers Allowance (income based) • Employment & Support Allowance (IR) • Employment & Support Allowance (IR) • Income Support • Child Tax Credit • Working Tax Credit • Housing Benefit
Universal Credit This new benefit will be administered by the Department for Work and Pensions Roll out of this is scheduled to start in October 2013 on a district by district basis – envisaged to be completed by April 2014 So no new claims for the old benefits can be made once their district/borough has joined the scheme Current customers who are already in receipt of the benefits will be converted over to Universal Credit sometime between April 2015 and October 2017 unless their circumstances change Digital by Default
Universal Credit – Who Can Claim The basic qualifying conditions are the same except: • claimant and partner must agree to a ‘claimant commitment’. Could loose benefit! Hardship payments may be available. As with LHA the objective with UC is to pay the claimant direct. At present there is nothing set down to state who may be vulnerable or if the 8 weeks in arrears rule will apply – but it is expected that some safeguards will be put in place. There is a pilot going on at the moment to look into the effects of direct payments.
Pensioners and Universal Credit Pensioners are not included in the first part of Universal Credit introduction. From October 2013 Pension Credit is going to be given a new capital limit. The capital limit may be somewhere in the region of £30,000. somewhere in the region of £30,000. The other big change from Oct ’13 couples claiming PC will both have to have reached the age for SPC – so no advantage for the younger member of a couple. New pensioners joining the Housing Credit scheme will have the choice to have their housing element paid to themselves or the landlord.
Changes to Council Tax Benefit From April 2013 Council Tax Benefit will no longer exist in it’s current format. Instead local ‘Council Tax Support’ schemes will be put in place. Leicestershire Council’s are working together to come up with one agreed scheme which takes in to account certain factors and delivers the 10% saving required. The new scheme must : • not effect pensioners current entitlement • not discourage work • protect the vulnerable A scheme is currently out for Consultation from the 2 nd August to the 28 th September 2012. Once the consultation is complete an agreed scheme will be passed to members to agree in each LA.
Changes to Council Tax benefit The components being consulted on include the following: Council Tax eligibility is capped say at between 75% and 90% Benefit restricted to Band D Increase tapers from 20% to 25% Cease Second Adult Rebate Increase non dependant deductions to 25% Decrease Capital limit to £10k Increase earnings disregards to 25% Full details will be available on Council website
The Benefit Cap From 1 April 2013 household benefit payments will be capped at the level of the average take home pay at £500 per week for a family and £350 per week for a single person. The benefits included in the cap are: Income Support Carer’s Allowance Job Seekers Allowance Bereavement Allowance Employment & Support Allowance Widowed Parents Allowance (not the support customers) Severe Disablement Allowance Housing Benefit Guardians Allowance Child Benefit Incapacity Benefit Child Tax Credit Universal Credit (child care costs excluded) Pension credit, SRP, DHP, free school meals, council tax benefit and it’s replacement, SSP, SMP, SPP and statutory adoption pay will not be included in the cap.
The Benefit Cap Those exempt from the cap are: • Single pensioners, but will apply to a couple if one is ‘working age.’ • War widows or widowers pensions. • Households with people receiving DLA, Attendance Allowance or PIP, constant attendance allowance as part of war pension or industrial injuries benefit. • Household where someone receives the support component of ESA. • Household where someone receives Working Tax Credit. • People who lose their jobs through no fault of their own, after being employed for 50 out of 52 weeks and were working 16 hours in the last week of work, will be given 9 month grace period to find work before the cap kicks in. They cannot have claimed JSA, IS or ESA in that 52 weeks unless it was during the 2 week gap. There is no transitional protection as such, but more money is being made available through the Discretionary Housing Payment scheme.
Benefit Cap – How will it be applied Miss S receives £647 in Income Support, Child Benefit and Child Tax Credit. The cap will be delivered through Local Authorities for those in receipt She receives her full rent in housing of Housing Benefit. benefit of £75.50 Housing Benefit is currently the only benefit affected by the cap. So even Only her Housing Benefit will be capped if other benefits received add up to until Universal Credit date. more than the cap, only the Housing more than the cap, only the Housing Benefit can be cut. Housing Benefit Total £75.50 Amount capped £75.00 Housing Benefit Paid £ 0.50 If her DWP benefits came to £600, (have to pay a minimum of 50p) which is above the cap, her DWP benefits would remain the same, but She would still receive the £647 in her housing benefit would be Income Support, CHB and CTC. capped completely leaving her with nil HB
Benefit Cap Calculator There is now an online calculator available for claimants to use at www.direct.gov.uk/benefitcap There is also a benefit cap helpline: 0845 6057064 Textphone: 0845 6088551 This helpline will be open from 8am – 6pm Monday to Friday.
Under Occupancy From April 2013 working age tenants who live in council, housing association or social landlords housing, will have their housing benefit entitlement restricted to the rent for an appropriately sized property much the same as LHA in the Private Sector.
Under Occupancy – who is affected? The size criteria will apply to working age social housing tenants who are in receipt of HB. Couples both have to be working age to be affected. However, from October 2013 couples will both have to have attained the age for State Pension Credit to apply for Pension/Housing Credit – so those who do not meet that criteria will have to apply for UC. An extra £30 million nationally will be available to assist disabled people where they have had extensive adaptations made to the property and foster carers. carers. Exempt properties • excluded tenancies (supported) • mooring charges and site rent • temporary accommodation
Under Occupancy – how is it worked out? The bedroom requirement will be worked out as for Local Housing Allowance ONE BEDROOM FOR: � Every adult couple � Any other adult aged 16 or over � Any Two children of the same sex (up to 16) � Any two children regardless of sex under the age of 10 � Any other child Where the property is deemed as ‘under occupied’ the eligible rent will be reduced by a ‘national percentage’ rather than a fixed level like LHA. If they under occupy the property by one bedroom their eligible rent will be reduced by 14%, if they under occupy the property by 2 bedrooms or more then their t rent will be reduced by 25%.
Example of Under Occupancy calculation Mrs P lives in a 3 bedroom property alone. Currently has all her rent paid as on ESA (IB). Rent per week £73.00 HB paid £73.00 When applying the size criteria, she only needs a 1 bedroom house: 1. One bedroom for herself Therefore she is under-occupying the property by two bedrooms. Total Eligible Rent £73.00 Minus 25% reduction £18.25 Total HB from April 2013 = £54.75
Social Fund The Community Care Grant and Crisis loan budget will be combined and transferred to County Council to administer? Crisis loans are for disasters such as floods in a home. Community grants are for living expenses for those who cannot afford things such as furniture, white goods etc. There is not a scheme in place yet for how this will work, but it is hoped that the whole of Leicestershire will adopt the same scheme once this has been decided. The Government has said that it is too easy for claimants to get help from the social fund and intends to give out a lot less than it does now. Current thinking is that the amounts paid out will be reflective of the rates that were given in 2005/2006.
Personal Independence Payment (PIP) The DWP plans to replace Disability Living Allowance with a new benefit called Personal Independence payment for all working age (those aged 16 – 64 years old) from April 2013. At the moment this will not apply to those who are under 16 or aged 65 or over. Similar qualifying conditions but less components. There will be just 2 components: • A mobility component – based on a claimant’s ability to get around • A mobility component – based on a claimant’s ability to get around • A “daily living” component – based on their ability to carry out “other key activities necessary to participate in everyday life” Each of these components will have 2 rates: • A standard rate – if a claimant had a limited ability to carry out daily living activities • An enhanced rate – if a claimant has severely limited ability to carry out daily living activities
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