Transcript Document

Welfare Reform
November 2012
Jo Robinson – Revenues & Benefits
Manager
Today’s Session
• Welfare Reform - An Update
• Localisation of Council Tax Benefit
Welfare Reform
WELFARE REFORM
• Reforming the welfare
system – to make it fairer,
more affordable and better
able to tackle the poverty,
worklessness and welfare
dependency
LOC ALISATION
DEFICIT REDUCTION
• Coalition principles of increasing
freedom and sharing responsibility
by localising power and funding
• Governments top priority
•De-ringfencing of funding, abolition
of top down targets & inspection
regime
Source DCLG
•Taxpayers were paying almost £120
million per day I debt interest – more
than Council Tax, Stamp Duty and
Inheritance tax combined for 2011
Welfare Reform Timeline - 2013
•
April
– Housing Benefit/LHA linked to the Consumer Price Index (CPI) rather than the Retail
Price Index (RPI) means a real net deduction of around 1%.
– Benefit Cap – introduction of a cap to the maximum amount of benefit that can be
claimed
– Social Sector Rent Restrictions ‘Bedroom Tax’ - Restricts Housing Benefit entitlement for
Social Housing Tenants whose accommodation is larger than they need
– Social Fund reform – Social Fund current arrangements will be abolished
– Universal Credit Pathfinder – Universal Credit replaces the current benefit entitlement
system
– Personal Independence Pathfinder – Personal Independence Payments replace
Disability Living Allowance
Welfare Reform Timeline - 2013
•
June
– New claims for Personal Independence Payments – following outcome of pathfinders in
April
•
October
– Reassessment of DLA claims begins
– Universal Credit – phased roll-out begins
– Changes to the rules regarding pensioner/working age households
Universal Credit
• Aims to
– Simplify the system, making it easier for people to understand, easier and
cheaper for staff to administer
– Improve work incentives
– Smooth the transitions into and out of work
– Reduce in work poverty
– Cut back on fraud & error
• It is a single benefit that will incorporate WTC, CTC, Housing Benefit, IS,
JSA (ib) and ESA (ib) into one benefit as a basic allowance, additional
elements for Children, Disability, Housing and Caring where appropriate
• Calculated and delivered electronically according to monthly income
reported via upgraded PAYE system
• Conditionality – those who can work will be required to take all
reasonable steps to find and move into employment
What do we know?
•
New claims for Housing Benefit from customers who are out of work will move to
Universal Credit from October 2013
•
New claims for Housing Benefit from customers who are in work will move to
Universal Credit from April 2014
•
Universal Credit will go live in the Greater Manchester & Cheshire region in April
2013. This will be a pathfinder project to test the new system before it is rolled
out nationally in October 2013
•
Will be administered by DWP and will be digital by default
•
Job Centres will be the primary channel for local, face to face support – although
some LA’s will be involved in local pilot schemes for UC. Pilots are expected to
start in Autumn 2012.
•
Approx. 4.5 million records will be transitioned to the new IT platform between
October 2014 to 2017
Universal Credit – Migration Key Dates
APRIL 2013
Pathfinder Go Live
OCT 2013
New claims from unemployed claimants
start
APRIL 2014
New claims from in-work claimants start
Managed migrations start
2017
Managed migration activity complete
Payment of Universal Credit
•
Universal Credit will be paid:
– As a single monthly household payment
– On a calendar monthly basis in arrears
– Will include a direct payment of housing costs to the claimant – will then be
the claimants responsibility to pay their rent to their landlord
•
Six volunteer areas are testing direct payments with their tenants from June 2012
to June 2013. Around 2,000 tenants in each area are involved.
•
DWP envisage 4 levels of support with regard to direct payments:-
Independent
Able to budget
Light Support
Able to budget with short term support
Intensive Support
Only able to budget with ongoing help
Exceptions
Unable to budget even with support
“Wherever possible, exceptions to the standard process is
seen as a transitional state”
DWP IRRV Benefits Conference Feb 2012
Direct Payments of Universal Credit
• Direct Payments – project currently underway with 6
LA’s to:
– Test impact of various trigger points and safeguards for social
landlords
– Test safeguards for different groups of people e.g. Trigger
points for making payments to landlords and test budgeting
tools for claimants
– Evaluate communication strategy with claimants and also
landlords’ strategies for maintaining financial viability
• Outcome of pilot project is due shortly but it is
rumoured that a third of tenants are in arrears
Preparing for Universal Credit
• Engage with residents early around financial inclusion
before UC is rolled out
• Residents should be helped to open a bank account at
the point of signing up to new tenancies
• Work with financial service providers (e.g. Credit
Unions) to support wider financial inclusion
• Support the move into work – closer links/referrals
with local Job Centre plus, job clubs, help with CV’s
Personal Independence Payments
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April 2013 will see the introduction of Personal Independence Payments (PIP) for
eligible working age people aged 16 to 64 to replace Disability Living Allowance
(DLA)
Will apply to pathfinder areas in April 2013, rolled out nationally in June 2013 for
all new claims
No automatic transfer - Between 2013 and 2016 everyone aged 16 to 64 receiving
DLA will be individually reassessed against new entitlement criteria
People entitled to the new PIP will have their claims transferred over and their
DLA will stop
No current plans to replace DLA with PIP for children aged under 16 and people
over the age of 65
Although we don’t administer DLA, this will affect the residents of our borough
From those residents currently in receipt of Housing and/or Council Tax Benefit
1,959 receive DLA
More information at www.dwp.gov.uk/pip
Restrictions for Social Sector Tenants
• Introduced from April 2013 for new and existing working age
Housing Benefit claimants living in the social sector (Council
Tenants and those renting from Housing Associations)
• Final regulations not yet received, but draft regulations
propose:
– One bedroom for each person or couple living as part of
the household with the following exception
• Child aged 15 or under would be expected to share
with one other child of the same gender; and
• Child aged 9 or under would be expected to share with
one child aged 9 or under, regardless of gender
Benefit Cap
• From April 2013 the Government will introduce a cap on the
total amount of benefit that working age people can receive
so that households on out of work benefits will no longer
receive more in benefit than the average weekly wage earned
by working households
• Decided by DWP but administered by the Local Authority as a
cap to Housing Benefit
• £500 per week for a couple and lone parents, £350 for a
single person
•
Cap will apply to the combined income from:
– Out of work benefits (Jobseeker’s Allowance, Income Support and
Employment & Support Allowance, except where the Support component is in
payment)
– Housing Benefit
– Child Benefit & Child Tax Credit
– Universal Credit (From October 2013); and
– Other Benefits such as Carer’s Allowance and Maternity Allowance
•
Cap will not apply when someone in the household:
– Obtains work and becomes entitled to Working Tax Credit
– Is in receipt of War Widows Pension, Disability Living Allowance, Attendance
Allowance or support component of ESA
•
Based on current data 90 of our customers will be affected by the cap. DWP
contacting all those affected by letter. The scan identifies those affected based on
current details and also those who may be affected from April 2013.
•
DWP helpline 0845 605 7064 or online at www.direct.gov.uk/benefitcap
•
Example 1
– Mr & Mrs A have 4 children and are both out of work. Their combined benefit
income (including Housing Benefit) is £600 per week.
– Their Housing Benefit entitlement is £120 per week
– As their income exceeds the benefit cap by £100, their Housing Benefit from
April 2013 will be £20 per week
•
Example 2
– Mrs C is a lone parent with 5 children and is not working. Her benefit income
(including Housing Benefit) is £556 per week.
– Her Housing Benefit entitlement is £138 per week
– As her income exceeds the benefit cap by £56, her Housing Benefit from April
2013 will be £82 per week
Impact of Welfare Reform
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Less income for residents
More rent and council tax for the council to collect
Inability to pay other bills
Increase in demand for debt advice
Greater demand on homelessness and housing options
Greater levels of overcrowding
Landlords less willing to take benefit claimants – no safeguards
Increased applications for Discretionary Housing Payments
Greater concentration of tenants in cheaper, poorer quality housing
Likely to increase demand for smaller properties – may be difficult to
meet
• Higher demand for social housing from privately rented tenants
Localisation of Council Tax Benefit
Current Council Tax Benefit Scheme
• Means tested benefit
• Where applicable a joint application for Housing & Council
Tax Benefit is made
• Data sharing arrangements with the DWP
• Assessment is based on national set of legislation
• Legislation applies to working age and those of pensioner age
• Council Tax Benefit awarded is reclaimed via a national
subsidy system. There is no ‘maximum’ in terms of the
amount of subsidy we can reclaim
Localisation of Council Tax Benefit
New Council Tax Support Scheme
• Part of the Local Government Finance Bill published on 16th
December 2011
• The Bill requires Local Authorities to establish a Council Tax
Reduction Scheme by 31st January 2013
• Will be paid as a discount rather than a benefit
• We will receive a fixed grant to cover the cost – but only 90%
• Regulations will include the following provisions:
– Pensioners should not see any change in their current level of awards
as a result of this reform
– Local Authorities to consider support for other vulnerable groups
– Local Schemes should support work incentives, and in particular avoid
disincentives to move into work
Current Caseload Data
• Total Caseload
• Council Tax Benefit Caseload • Pensioner Age Claimants
• Working Age Claimants
-
13,028
12,139
5,583 or 46%
6,556 or 54%
Those that are working or self employed or not in receipt of any
state benefits
2,272
Those on Job Seekers Allowance
1,224
Those on Income Support
2,339
Those on Employment Support Allowance
721
Consultation
• Took place between 6th August & 28th September
• Focussed on six key proposals:–
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All working age claimants should pay something
Protection for vulnerable claimants
Work incentives
All members of the household should contribute
Late applications
Removal of Second Adult Rebate
Rates of Allowances & Premiums frozen at 2012/13 rates
Hardship fund
Local Council Tax Support Scheme
• Following consultation the six key proposals were
agreed by Cabinet on 7th November
• Will now be reported to full Council in December
• Now busy looking at the administration of the
scheme including the collection of Council Tax from
working age claimants affected by the changes
Conclusion
• Biggest period of change in over 30 years
• Lots of work still to do!
• Welfare Reform group has been set up to
decide how best to communicate these
changes to all of our residents
• Also need to consider what help and advice
we can give regarding financial inclusion
Questions
?