welfare reform slides
DESCRIPTION
These are the slides from a presentation I went to about welfare reform plans for the next couple of yearsTRANSCRIPT
www.adviceleeds.org.uk March 2012 1
Building excellent advice services through partnership
www.adviceleeds.org.uk March 2012 2
Welfare ReformThe timetable for
change
www.adviceleeds.org.uk March 2012 3
April 2011
• Child Benefit rates frozen for three years• Higher rate mobility component of
Disability Living Allowance to cover those with a severe visual impairment
• Consumer Price Index (CPI) will replace Rossi and Retail Price Index (RPI) as the tool used to decide benefits increases in April each year
www.adviceleeds.org.uk March 2012 4
• Some Jobseeker's Allowance claimants may have to do unpaid work, or work-related activity
• Pension Credit - Maximum Savings Credit award to be frozen for four years
• Sure Start Maternity Grant will only be available for the first child
www.adviceleeds.org.uk March 2012 5
Housing benefit• £15 excess rule will be removed• Local Housing Allowance (LHA) restricted to four-
bedroom rate regardless of household size• Non-dependant deductions (NDD) to be increased
(up-rated) on the basis of prices using the Consumer Prices Index
• Baby element of family premium will no longer be available
• An extra room will be allowed for a non-resident carer• New maximum LHA rate based upon property size• LHA rates will be at a value of 30% of the average
rents in an area
www.adviceleeds.org.uk March 2012 6
Excess benefit rule removed
Old rules Rent charged is £60 per weekLHA is £100.38
HB worked out on actual rent plus max £15 excess.HB paid at £75 per week.
New rulesRent charged is £60 per weekLHA is £100.38
HB worked out on actual rent with no excess.HB paid at £60 per week.
www.adviceleeds.org.uk March 2012 7
Excess benefit rule
New claims
- no excess from April 2011
Existing claims
- excess stops on Annual Review date
www.adviceleeds.org.uk March 2012 8
4 bedroom maximum
The 5 bedroom rate was abolished for new applicants from April 2011
March 2011 5 bed rate £335.00 p/week
April 2011 4 bed rate £173.08 p/week
www.adviceleeds.org.uk March 2012 9
4 bedroom maximum
• Existing applicants have 9 months protection from review date.
Example• Claim made April 2010 – rent used £325.00• Reviewed April 2011 – should fall to £173.08
but granted 9 months protection• Rent reduced to 4 bed rate January 2012
(£184.62)
www.adviceleeds.org.uk March 2012 10
30th percentile
• LHA rates originally based on the 50th percentile of market rents.
• 50% of the rents above the LHA and 50% below
From April 2011• Based on the 30th percentile• 30% of rents below the LHA and 70% above
www.adviceleeds.org.uk March 2012 11
Reduction in LHA - Leeds
March 2011 April 2011
Shared 61.50 59.00
1 room 109.62 98.08
2 room 126.92 114.23
3 room 144.23 126.92
4 room 206.54 173.08
5 room 335.00 XXXXX
www.adviceleeds.org.uk March 2012 12
Reduction in LHA - Leeds
New claims after April 2011 – applies straight away
Existing applicants as at April 2011 have 9 months protection from review date
Example (1 bed rate)• Claim made January 2011 – rent used £109.62• Reviewed January 2012 – should fall to £100.38 but
granted 9 months protection• Rent reduction takes effect from October 2012
www.adviceleeds.org.uk March 2012 13
Maximum LHA
From April 2011 the weekly LHA cannot exceed
• £250 for a one bedroom property• £290 for a two bedroom property• £340 for a three bedroom property• £400 for a four bedroom property
National figures - No claims in Leeds affected
www.adviceleeds.org.uk March 2012 14
Carers – Extra Room
• Extra room allowed when a claimant with a disability has a non resident carer
• Must need overnight care and be getting– Attendance Allowance, or– the middle or high rate of DLA for care, or– if not getting one of these benefits will need to
provide sufficient evidence to show that they require overnight care
www.adviceleeds.org.uk March 2012 15
Carers – Extra Room
The local authority must be satisfied that they
• reasonably require, and• have arranged for one or more people
– to be engaged in providing overnight care– regularly stay overnight to provide care– be provided with the use of a bedroom
which is additional to those used by the claimant.
www.adviceleeds.org.uk March 2012 16
Non-dependent deductions
How the rates have increased since 2010
2010/11 2011/12 2012/13
Other income 7.40 9.40 11.45
Gross income levels based on 2012/13 figures (in work)less than £124.00 7.40 9.40 11.45£124 to £182.99 17.00 21.55 26.25£183 to £237.99 23.35 29.60 36.10£238 to £315.99 38.20 48.45 59.05£316 to £393.99 43.50 55.20 67.25£394 and above 47.75 60.60 73.85
A further comparable increase is planned for April 2013
www.adviceleeds.org.uk March 2012 17
Housing benefit• the age threshold for the shared
accommodation rate of Local Housing Allowance (LHA) will be increased from 25 to 35
January 2012
www.adviceleeds.org.uk March 2012 18
Shared Room Rate
• age limit increasing from under 25 to under 35
January 2012 LHA ratesShared £61.501 bed £100.38
loss in HB of £38.88 per week (£168.50 per month)
• 1500 people in Leeds will be affected
www.adviceleeds.org.uk March 2012 19
Shared Room Rate
New claims from January 2012 – applies immediately
Existing claims
• Next review date, or
• At end of 9 month transitional protection from April 2011 changes
www.adviceleeds.org.uk March 2012 20
Shared Room Rate
Exemptions – shared room rate does not apply
• Responsible for a child• Have a non resident carer who regularly
stops overnight to provide care• Have another adult who lives in the home
(for example non dependant)• If the tenant qualifies for a severe disability
premium on their Housing Benefit• Care leavers under the age of 22
www.adviceleeds.org.uk March 2012 21
Shared Room Rate 25-35
Two new exemptions introduced
1) Over 25 and subject to active multi-agency management under the Multi Agency Public Protection Arrangements (MAPPA)
2) Over the age of 25, and spent more than 3 months in a specialist hostel for the homeless
www.adviceleeds.org.uk March 2012 22
ESA• People in the Work Related Activity
Group of contribution based ESA will have their claims limited to one year
• Contributory ESA in youth to be abolished
April 2012
www.adviceleeds.org.uk March 2012 23
Tax credits• 50+ element removed from Working Tax Credits (WTC)
• Couples with children must work at least 24 hours a week between them, with one working at least 16 hours to qualify for WTC
• If your income falls by up to £2,500 during the Tax Credit award year, the amount you get will not be revised to see if you are entitled to a higher Tax Credit payment
• Second income threshold removed
• Backdate for new applications and changes of circumstances for up to one month instead of three
• Couple and lone parent rates of Working Tax Credit will be frozen
www.adviceleeds.org.uk March 2012 24
• Income support - Lone parents with a child aged 5 and over not longer eligible for IS
• Tougher sanctions for failure to meet conditionality requirements
• Housing benefit - A further £40million per year will be added to the Discretionary Housing Payment budget
• From April 2012 the LHA will be frozen for one year
• DLA mobility Component withdrawn for those in residential care (now postponed)
• New payment system will replace benefits cheques (date to be confirmed)
www.adviceleeds.org.uk March 2012 25
Fraud and Error changes• Cautions scrapped
• Admin Penalty increased to 50% of overpayment or £350 whichever is greater
• 1-strike sanctions extended
• £50 civil penalty introduced for failure/negligence in reporting changes
April 2012 continued
www.adviceleeds.org.uk March 2012 26
January 2013
• Child benefit abolished for higher rate tax payers
www.adviceleeds.org.uk March 2012 27
• Council Tax Benefit is to be replaced by localised support for Council Tax
• Social Fund scheme transferred to councils
Housing Benefit• Size criteria will apply in the social rented
sector for working-age claimants• LHA rates will be increased in line with
the Consumer Price Index instead of the market rents in each area
April 2013
www.adviceleeds.org.uk March 2012 28
Local scheme of support for Council Tax
• The new Council Tax Support scheme means a 10% reduction in funding in comparison to the current scheme
• Pensioners protected (may be potential to also protect other groups)
• No decision on scheme to be adopted in Leeds
www.adviceleeds.org.uk March 2012 29
Local scheme of support for Council Tax
Customers affected in Leeds• 94k claims for CTB received in 2010/11
of which 35k from pension age claimants and 15k from vulnerable claimants; overall 10% reduction in funding would need to be applied to the remaining 44k claimants. LA estimates that this would mean a reduction of 18% in CTB for these claimants
www.adviceleeds.org.uk March 2012 30
Social Fund schemetransferred to council
Crisis Loans and Community Care Grants to councils
Budgeting Loans stay with Jobcentre Plus
Funding for Crisis Loans to be reduced
No compulsion to run a scheme
Councils can provide goods rather than cash
Councils can devolve schemes to voluntary sector to run
www.adviceleeds.org.uk March 2012 31
Social Housing – Size Related Criteria
• Applies to both LA and Housing Association tenants
• Size criteria similar to LHA
• Reduction in HB will be achieved by reducing eligible rent for HB purposes by 14% where 1-room too many and 25% for 2 rooms or more
• Average loss of Housing Benefit of £13 per week for 670,000 claimants nationwide
www.adviceleeds.org.uk March 2012 32
Size Related Criteria - Impact on Leeds
LA analysis of caseload suggests that:– 360 tenants would lose £0.01 to £5.00 pw– 4300 tenants would lose £5.01 to £10.00 pw– 1230 tenants would lose £10.01 to £15.00 pw– 1360 tenants would lose £15.01 to £20.00 pw– > 50 tenants would lose >£20 pw
• Assumes 14% cut for 1-bed and 25% cut for 2-bed or more
www.adviceleeds.org.uk March 2012 33
•DLA to be replaced with a new benefit called Personal independent payment
•Tax credits - Any rise in income of £5,000 or more during the award year will be taken into account when finalising your Tax Credit award
•Total household welfare benefit cap to be introduced
April 2013 continued
www.adviceleeds.org.uk March 2012 34
Personal Independent Payment• From April 2013, Personal Independence Payments
replace DLA for claimants aged between 16 and 64
• Programme of reviews will take place to reassess current DLA recipients for PIP
• Assessment will cover 11 areas
• Claimants will need to score over a certain threshold of points to be entitled to PIP with level of entitlement affected by level of score
• DWP impact assessment states that changes will save £2.1bn
• DWP stats suggest around 21,000 DLA recipients in Leeds aged between 16 and 64
www.adviceleeds.org.uk March 2012 35
‘Benefit Cap’• The ‘benefit cap’ will limit the amount of
benefit that a family not in work can receive to the average earnings
• The ‘benefit cap’ will be applied by local councils who will reduce the amount of Housing Benefit in payment until the cap limit is reached
www.adviceleeds.org.uk March 2012 36
‘Benefit Cap’
• Cap will apply to combined income from:– JSA, IS, ESA, HB, Child Benefit, Chid Tax Credit,
Industrial Injuries Benefit, Carer’s Allowance
• People getting the following benefits will be exempt from the cap:– DLA, Personal Independence Payment, Constant
Attendance Allowance and Attendance Allowance;
– War Widows and War Widowers will also be excluded as will people working sufficient hours to get Working Tax Credits
www.adviceleeds.org.uk March 2012 37
‘Benefit Cap’ - Impact on Leeds
• Latest analysis indicates 184 families in Leeds would be affected with reductions ranging from £1.60 a week through to loss of full Housing Benefit
• All are families with 4 or more children
• 14 families lose all their Housing Benefit entitlement (including some families renting in the social sector) with all these families having 7 or more children
• Average reduction in Housing Benefit for the 184 families affected is £65pw
www.adviceleeds.org.uk March 2012 38
October 2013
• Universal Credit to be introduced – a new benefit that will replace tax credits, HB, IS, income based JSA and ESA
www.adviceleeds.org.uk March 2012 39
Universal Credit
• Will be delivered by DWP from Jobcentre Plus and HMRC teams
• Will be ‘digital by default’ with expectations that 50% of claimants will claim online from October 2013 rising to 80% by 2017
• Jobcentre Plus will provide ‘front of house’ services in the first instance with longer term delivery model to be decided in 2015
• Will normally be paid monthly in arrears directly to the claimant (including housing rent element and mortgage interest element)
www.adviceleeds.org.uk March 2012 40
Universal Credit
• All claimants need to sign a ‘Claimant Commitment’ setting out conditionality requirements. Conditionality requirements are expected to apply to in-work claimants earning up to £212.80 a week (35hrs x National Minimum Wage)
www.adviceleeds.org.uk March 2012 41
Universal Credit
• Migration Strategy:– Phase 1 (Oct 13 – Mar 14): new claims
and ‘natural’ migration i.e. certain changes in circumstances
– Phase 2 (Apr 14 – Dec 15): those likely to benefit from Universal Credit
– Phase 3 (Dec 15 – 2017): managed migration by LA boundary
www.adviceleeds.org.uk March 2012 42
Save the Children CEO Justin Forsyth said -
'Universal Credit will help some families, but mums working hard to stay above the breadline are its big blind spot. It's incredibly hard bringing up 3 kids on £370 a week - losing almost a fifth of that will push many families over the edge.
The government must make sure mums who want to work keep more of their incomes and get more support with childcare. Otherwise we’ll see fewer women in the workplace and more children growing up in poverty.'
www.adviceleeds.org.uk March 2012 43
9.05.12 • Responding to the legislative programme
announced in the Queen’s speech, the Chief Executive of Child Poverty Action Group, Alison Garnham, said: From next year, low income families with a disabled child will face a massive cut of £1,400 a year to disability additions when they are moved onto universal credit. This will mean a total cut of £22,000 by the time a disabled child is sixteen, which will do far more harm to health, learning and life chances than you can remedy by changing how ‘choice’ works in education.”
www.adviceleeds.org.uk March 2012 44
Cut to the legal aid budget by £350 million
• Debt advice
Legal aid will only fund debt advice when
a person’s home is at ‘immediate risk’
• Employment law advice
All legal aid funding will be cut, except in
cases of discrimination
www.adviceleeds.org.uk March 2012 45
• Family law advice
Legal aid will only fund advice on family
problems in cases of domestic violence.
In all other cases, legal aid will not fund
advice on issues like divorce, contact
with children, adoption or family
maintenance
www.adviceleeds.org.uk March 2012 46
• Housing law advice
Legal aid will only fund advice on
homelessness or serious disrepair
threatening health
• Immigration law advice
Legal aid will only fund cases where someone
is detained or fleeing torture, persecution or
otherwise seeking asylum.
www.adviceleeds.org.uk March 2012 47
• Welfare benefits advice
All legal aid funding will be cut, including
issues like appealing decisions for
sickness benefits
• Other advice
Many other specific issues will no longer be
funded through legal aid. This includes advice
and representation at many types of tribunal
against companies or government agencies
www.adviceleeds.org.uk March 2012 48
2015
• Means-tested pensioner benefits will be replaced by a new flat rate ‘Citizen’s Pension’ which is not linked to National Insurance contributions
www.adviceleeds.org.uk March 2012 49
April 2016
State Pension Age• Equalisation of women’s pension age with
men’s will be sped up from April 2016 so that women’s pension age reaches 65 in November 2018Pension age for men and women will then increase to 66 by Oct 2020Further increases to the State Pension age are being considered to raise it from 66 to 68
www.adviceleeds.org.uk March 2012 50
Advice Leeds Partnership
• Making best use of available/reducing resources
• Developing gateway services
• Develop telephone and web-based services
• Prioritising most vulnerable for most support
• Self-help and signposting information and materials
• Training for front-line staff – reception, support workers, advice
workers
• Social policy
www.adviceleeds.org.uk March 2012 51
Possible options for clients
• Check the clients circumstances and that the changes are being applied correctly
• Try to negotiate a rent reduction with the landlord
• Get ‘money advice’ to budget carefully and cope with the extra cost of a shortfall in HB
• Move to a cheaper area, or cheaper property
• Apply for discretionary housing benefit
• Apply for a grant from a charity
www.adviceleeds.org.uk March 2012 52
Support & Advice - Clients• Maximise clients income
– Are they getting the right benefits?– Do they need extra help due to illness, disability or caring responsibilities?
• Turn2us• Local advice services
• Budgeting, money or debt advice– Turn2us – Money Advice Service– Consumer Credit Counselling Service (CCCS)– National Debtline– Local Advice Services
• www.adviceleeds.org.uk• Overcoming financial difficulty – A guide to services• Credit Union
• Housing information or advice• Other support or advocacy
www.adviceleeds.org.uk March 2012 53
Support & Advice - Frontline staff• Resources
– Information, updates– Leaflets, websites
• Training– Briefing sessions– Tool kits