the impact of welfare reform
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The Impact of Welfare Reform. Bethany Eckley Research Manager, Church Urban Fund June 2013. Mission : to transform the lives of the poorest and the most marginalised in England. Overview. It All Adds Up : cumulative, financial impact of welfare reforms. - PowerPoint PPT PresentationTRANSCRIPT
The Impact of Welfare Reform
Bethany EckleyResearch Manager, Church Urban Fund
June 2013
Mission: to transform the lives of the poorest and the most marginalised in England.
Overview
1. It All Adds Up: cumulative, financial impact of welfare reforms.
2. The Human Cost of Welfare Reform: broader impact on people’s everyday lives.
1. Financial impact of reforms
• Case studies simulate tax-benefit changes 2010 – 17
• Methodology:– Figures adjusted using RPI–Gross earnings rise with inflation–Rents rise by 4% pa–Hholds move to Universal Credit in 2016/17
Mark and Sarah
• Mark is a full-time cook, earning £25,000 pa.
• Sarah looks after their three children.
• They live in a private property in east London.
Gain £450 per year – increased tax allowances
Gain £240 per year – freeze in Council Tax charges
Lose £1,470 per year – reductions in tax credits
Lose £1,760 per year – changes to Housing Benefit
Lose £400 per year – changes to Child Benefit
Mark and Sarah:
= loss of £3,000 pa
Mark and Sarah’s annual disposable income (after housing costs), 2010/11 to 2016/17.
- 13%
- 5%
Signifying a 13% reduction in five years.
Sam
• Single man of working-age.
• Disabled, but moves from incapacity benefit to JSA.
• A local authority tenant in the north east.
Continues without earnings
Loses £1,750 per year – the move to JSA
Loses £470 per year – the ‘bedroom tax’
Loses £140 per year – a Council Tax charge
Sam:
= loss of £2,300 pa
Sam’s annual disposable income (after housing costs), 2010/11 to 2016/17
Signifying a 44% reduction in five years.
- 44% - 45%
Representative?
• Mark and Sarah:–5-7% average reduction for families with
children (IFS 2013).
• Sam:–1.5m reassessed by 2014, so far one in
three judged fit for work.–420,000 disabled people affected by
‘bedroom tax’.
2. The human cost of welfare reform
• 19 interviews at ten church or faith-based community organisations.
• To understand impact of reforms on people’s every day lives.
• To reflect on how churches might best support those affected.
Incapacity Benefits
Jobseeker’s Allowance
Work Capability
Assessment
Impact of changes to disability benefits
Employment and Support Allowance
“The biggest change is the move
from ESA onto JSA. Now I would
say personally that in many cases
it is a good thing... But some of
them that are being forced onto
Jobseeker’s aren’t well and they
can’t cope and those are the ones
that we help.”
Those correctly found fit for work: the difficulty of moving into employment.
Those incorrectly found fit for work: appealing the decision.
Impact of changes to Housing Benefit
• From April 2011, a cap on Local Housing Allowance:— £230 per week, one bedroom — £290 per week, two bedroom— £340 per week, three bedroom— £400 per week, four bedroom
• From April 2013, the ‘bedroom tax’:— 14% less eligible rent for one spare bedroom— 25% less for two or more spare bedrooms
“Some of our families from the school
have been completely moved out of
the area because of the housing
benefit changes... They've gone all
over the place, but miles away... And
of course they’re still travelling into
school because their whole network is
here.”
Families moving home, leaving support networks behind.
Families struggling with the ‘bedroom tax’.
“For me, the biggest issue is the lack of compassion in
the changes that are taking effect. Amongst the people
making the decisions, there is either a refusal or an
inability to understand that when you change
something at the top, it is the people at the bottom of
the food chain that it hits the hardest, and it hits
quickest.”
Church-based responses
Three groups affected by specific reforms:
1. Former incapacity benefit claimants who need to move into employment.
2. Former incapacity benefit claimants wrongly judged as fit for work.
3. Households affected by Housing Benefit changes.
Challenges Possible church-based responses
Short-term Reduction or delay in benefit payments. In-kind support
Cash support
Transitional Overcoming barriers to employment:
poor CV or job application writing skills;
access to computers for job searches;
cost or lack of public transport;
childcare costs.
Running job clubs
Providing access to computers
Setting up car shares
Increasing availability of childcare
Long-term Lack of self-esteem, qualifications or skills. Confidence building courses
Offering training opportunities
Hosting voluntary placements
Former incapacity benefit claimants who need to move into employment
Together: we can help to transform the lives of the poorest and most marginalised in England.