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Welfare Reform . Welfare reform agenda. Government’s policy agenda on welfare: to reduce welfare bill to improve work incentives by ‘making work pay’ to reduce welfare dependency to reduce complexity. Cuts to Housing Benefit. From April 2011

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Presentation Transcript
welfare reform agenda
Welfare reform agenda
  • Government’s policy agenda on welfare:
    • to reduce welfare bill
    • to improve work incentives by ‘making work pay’
    • to reduce welfare dependency
    • to reduce complexity
cuts to housing benefit
Cuts to Housing Benefit

From April 2011

  • Local Housing Allowance (LHA) rates capped.
  • LHA rates set at the 30th percentile of local rents (instead of the current 50th percentile).
  • Maximum LHA rate reduced from five to four bedrooms.

From January 2012

  • Shared accommodation rate restriction for single people extended from under 25 to under 35.
some of the cuts affecting children
Some of the cuts affecting children
  • Child benefit frozen for three years
  • Child benefit will be withdrawn from families with a higher rate taxpayer from January 2013
changes in welfare reform bill
Changes in Welfare Reform Bill
  • Universal Credit to integrate means-tested working age benefits and tax credits
  • DLA replaced with PIP
  • Cap on total household benefits
  • Uprating of benefits and tax credits by CPI (not RPI)
  • Contribution-based ESA for those in work-related activity group limited to 12 months
  • ESA cut for young people who haven’t paid NI  
  • HB cuts where social housing tenants are under-occupying
  • Changes to discretionary social fund payments
universal credit from late 2013
Universal Credit – from late 2013
  • Combines working age benefits and tax credits into one household allowance - “personal allowance”
  • Full allowance if household has no other income and up to £6,000 of savings; percentage of allowance if savings between £6,000 & £16,000; none payable at all for savings over £16,000.
  • Single taper set at 65%
universal credit our concerns
Universal Credit - our concerns
  • Over-simplification could stop system responding flexibly
  • Lack of detail in the Bill, and reliance on regulations
  • Cumulative impact of changes on some groups
cap on total benefits
Cap on total benefits
  • Applies to out-of-work households
  • Based on average wage of in-work households - £500 per week for couples and lone parents, and £350 per week single people.
change to up rating
Change to up-rating
  • Move to CPI (Consumer Prices Index) for up-rating of benefits, tax credits and public sector pensions.
  • LHA rates to be uprated by CPI rather than reflecting local rents
under occupancy in social housing
Under-occupancy in social housing
  • HB entitlement will be restricted for working-age households living in social housing accommodation considered to be too large for their needs, rather than being based on the actual rent of their home.
  • This will apply to new and existing tenants from 2013.
  • 670,000 households will be affected.
  • Households will face average shortfalls of £13 per week
under occupancy in social housing11
Under-occupancy in social housing

Our concerns

  • Under-occupying households will face a shortfall between their HB and their rent
  • DWP impact assessment shows disabled and ethnic minority households particularly affected
  • Even if they are prepared to move, it won’t be possible for everyone to transfer to a property of the right size. (CLG stats show there is a surplus of 3 bed properties and a shortage of 1 beds at the national level. )
contribution based esa
Contribution-based ESA
  • Contributions based ESA limited to 12 months for those in the work-related activity group.
  • Withdrawal of ESA from young people who have not accrued NI contributions.
discretionary social fund payments
Discretionary Social Fund payments
  • Welfare Reform Bill proposes abolition of:
    • Community care grants (CCGs)
    • Crisis loans (CLs) for living expenses
  • Budgets added, un-ringfenced, to Gov grants to LAs
  • LAs expected to make local arrangements to meet need
  • LAs could support existing schemes: foodbanks, credit unions, furniture/ goods re-use schemes
  • Alignment Crisis Loans and Budgeting Loans become advance payments of UC