Transcript Welfare Reforms

Welfare Reforms
Ursula Barrington
Welfare reforms
• On 16 February 2011 the Welfare
Reform Bill was introduced to
Parliament. The Bill legislates for
the biggest change to the welfare
system for over 60 years.
Welfare Reforms
• It introduces a wide range of
reforms that are intended to
deliver the commitment made in
the Coalition Agreement
• their aim to make the benefits
and tax credits systems fairer and
simpler
Summary of the Bill
• 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.
Summary of the Bill
• 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
Key Areas
• 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.
Benefit Increases
• Increases will be based on the Consumer
Price Index rather than the Retail Price
Index
• From 2013 A cap on the total amount
claimants can receive in benefits.
 £500 per week for families
 £350 for single people
Benefit Increases
• If their benefits exceed this
amount it will be the Housing
Benefit that is reduced to limit the
total to £500/£350.
Impact
• Will depend on factors such as family size
and rent
– An unemployed couple with five
children would only have £67.13 in
benefit left from the cap for rent
• Impact on TMO’s – higher arrears,
evictions, people unable to occupy due to
affordability.
Non- dependant deductions
• Increased at the beginning of April 2011.
• These deductions have been frozen since
2001
• Staged increases will be applied from
2011 to bring them up to the level they
would have been if there had been an
ongoing annual uprating.
Impact
• Tenants getting into difficulty paying
increased contributions with benefit
increases lower than RPI
• Possible increase in rent arrears
Underoccupation
• From April 2013, social housing
tenants of working age will only get
Housing Benefit based on their family
size.
• Disabled tenants who have a nonresident carer can get Housing
Benefit for an extra bedroom in their
home.
Impact
• An impact assessment carried out
Department of Works and Pensions
estimated 32% of Tenants will be affected
losing between an average of £11 to
£20.00 per week.
• Once again increase in rent arrears.
• Tenants having to relocate.
Disability Living Allowance
• From April 2013 all new claims and
existing claims for Disability Living
Allowance will be based on a new medical
test that will apply to those aged 18 - 64
only.
• It is estimated that it will take about 3
years to test all the existing claimants.
Tax Credits
• Some people with higher incomes
will have lost entitlement from April
2011. Others will get less money.
• From April 2011 people aged 60+
can qualify for working tax credit by
working at least 16 hours.
Tax Credits
• From April 2012 the extra amount a
claimant aged 50+ gets when they return
to work after long-term illness or
unemployment is abolished.
• Other changes include reducing
backdating from 3 months to 1 month and
the amount of increased earnings that can
be ignored has reduced.
Other Changes
• Child Benefit has been frozen for 3 years
from April 2011.
• The £500 SureStart maternity grant for
people on certain benefits will only be for
the first birth in the family from April 2011.
• The new £190 health in pregnancy grant
was abolished from January 2011.
Other Changes
• Lone parents whose youngest child is 7
years old have had to claim Job Seekers
Allowance instead of Income Support
since October 2010 and this will drop to
age 5 from October 2011.
• The Child Trust Fund has also been
abolished for births from January 2011.
Incapacity Benefit
• This has been replaced already for new
claimants by Employment Support
Allowance.
• The reassessment process started in
February 2011, to see if those currently
getting Incapacity Benefit will get
Employment Support Allowance.
Incapacity Benefit
• The test for Employment Support
Allowance is tougher than the previous
test for Incapacity Benefit and there will be
regular reviews to reassess entitlement.
• Anyone not entitled to Employment
Support Allowance will have to claim Job
Seekers Allowance instead.
Universal Credit
• The idea of the Universal Credit is to
simplify the benefits system from several
means tested benefits to one benefit.
• The Welfare Bill abolishes; income based
Job Seekers Allowance, income based
Employment Support Allowance, Income
Support, Housing Benefit, Council Tax
Benefit, Child Tax Credit and Working Tax
credit.
Universal Credit
• The transfer from old benefits onto
Universal Credit will start in 2013.
• Universal Credit will be centrally
administered by the Department of Works
and Pensions and this will mean that the
Housing Benefit part of Universal Credit
will be taken away from local authorities.
Universal Credit
• The Housing Benefit part of the Universal
Credit will be based on the current
Housing Benefit rules.
• Under-occupation measures will carry
forward.
• The housing element of universal credit
can only go direct to a landlord in very
limited circumstances.
Universal Credit
• There is great concern in the social
housing sector that this will see the
end of direct payments.
Overall
• Less income- higher outgoings
• Impact on peoples ability to pay
rent
• Impact on TMO community
• Impact on staff
• Impact on services
WHAT CAN YOU DO
• Use your profiling information to
identify the Tenants that will be
affected.
• Provide staff with training :– financial inclusion
– Financial capacity building
– Prevention measures to stop households
falling into poverty
WHAT CAN YOU DO
• Start Talking to your Tenants before the
changes take place
• Send out bite sized information to Tenants
regarding the reforms.
• Carry out home visits to individuals to
discuss impact
What Can You Do
• Review your allocations schemes• Priority to Tenants needing to move to smaller
properties?
• Limit underoccupation
• Carry out affordability test at offer stage
• Inform applicants at offer stage of benefit
reforms that may affect them