Welfare reform slides
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The document outlines various welfare reform changes and their implications, including adjustments to housing benefit, tax credits, and the introduction of the Universal Credit system. Key changes include the freezing of certain benefits, new eligibility criteria for jobseeker's allowance, and the caps on overall benefit amounts. It also addresses the impact these changes will have on vulnerable families and individuals, particularly in Leeds.
Welfare reform slides
- 1. Building excellent advice services through partnership www.adviceleeds.org.uk March 2012 1
- 2. Welfare Reform The timetable for change www.adviceleeds.org.uk March 2012 2
- 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 3
- 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 4
- 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 5
- 6. Excess benefit rule removed Old rules Rent charged is £60 per week LHA is £100.38 HB worked out on actual rent plus max £15 excess. HB paid at £75 per week. New rules Rent charged is £60 per week LHA is £100.38 HB worked out on actual rent with no excess. HB paid at £60 per week. www.adviceleeds.org.uk March 2012 6
- 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 7
- 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 8
- 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 9
- 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 10
- 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 11
- 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 12
- 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 13
- 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 14
- 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 15
- 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 16
- 17. January 2012 Housing benefit • the age threshold for the shared accommodation rate of Local Housing Allowance (LHA) will be increased from 25 to 35 www.adviceleeds.org.uk March 2012 17
- 18. Shared Room Rate • age limit increasing from under 25 to under 35 January 2012 LHA rates Shared £61.50 1 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 18
- 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 19
- 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 20
- 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 21
- 22. April 2012 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 www.adviceleeds.org.uk March 2012 22
- 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 23
- 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 24
- 25. April 2012 continued 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 www.adviceleeds.org.uk March 2012 25
- 26. January 2013 • Child benefit abolished for higher rate tax payers www.adviceleeds.org.uk March 2012 26
- 27. April 2013 • 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 www.adviceleeds.org.uk March 2012 27
- 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 28
- 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 29
- 30. Social Fund scheme transferred 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 30
- 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 31
- 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 32
- 33. April 2013 continued •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 www.adviceleeds.org.uk March 2012 33
- 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 34
- 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 35
- 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 36
- 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 37
- 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 38
- 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 39
- 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 40
- 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 41
- 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 42
- 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 43
- 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 44
- 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 45
- 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 46
- 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 47
- 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 48
- 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 49
- 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 50
- 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 51
- 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 52
- 53. Support & Advice - Frontline staff • Resources – Information, updates – Leaflets, websites • Training – Briefing sessions – Tool kits www.adviceleeds.org.uk March 2012 53
Editor's Notes
- #4: Uprating Consumer price index (CPI) will replace Rossi and Retail price index (RPI) as the tool used to decide benefits increases in April each year (also known as uprating). The Government’s reasoning for this change is that CPI is a better measure of inflation and a more appropriate measure for benefit claimants as it does not take account of housing costs. This change is expected to result in £6billion savings per year by 2015. Institute for Fiscal Studies (IFS) analysis found that only 23% of claimants will be protected by this change, the rest will be paying for things not covered by CPI so there will be a real loss of income over time. This change saves the Government the most money out of all things announced. CPI was just 3.1% in September 2010 and this is the figure that will be used for uprating benefits in April 2011, at that time RPI was 4.6%.
- #5: Some Jobseeker's Allowance claimants may have to do unpaid work, or work-related activity, for up to four weeks in order to continue receiving their benefit.The Personal Advisers at Jobcentre Plus will decide which claimants will benefit from being referred onto this scheme which will be delivered by a range of organisations from the private, voluntary and third sector. Pension credit - maximum Savings Credit award to be frozen for four years this has actually reduced for 2012/2013 from £20.52 to £18.54 for a single person and from £27.09 to £23.73 for a couple Sure start maternity grant will only be available for the first child, unless it is a multiple birth or the new child is the only one in the family under 16.
- #22: (MAPPA is a statutory scheme for managing sexual and violent offenders. It is anticipated that the relevant agency or MAPPA co-ordinator will notify a nominated contact at the benefit office that the relevant criteria for exemption applies) (Note the 3 months does not have to be continuous or in the same hostel, and there is no time scale over how long ago the stay in the hostel was) The two new exemptions only apply to persons over the age of 25 The new exemptions do not apply if the claimant is living in shared accommodation
- #25: 09 March, 2012 The DWP has announced the introduction of 'Simple Payments' for claimants who are unable to use bank accounts. In the latest edition of its Touchbase magazine, the DWP says that cheque payments are being phased out and that Simple Payments will be introduced from summer 2012 for those people who are unable to make use of mainstream bank accounts or the Post Office card account to receive their benefits, pensions and child maintenance. The DWP advises that claimants using the new service will be issued with a Simple Payment card that allows them to receive their cash at PayPoint-enabled outlets. In addition, the DWP says that, if claimants require a regular carer or family member to collect payments for them, an additional card will be issued. Introducing the new service, DWP official Kerry Fern said - 'We know that for some people, using a normal account, such as a bank, building society or Post Office card account, is simply not an option. We are working very hard on the design of the Simple Payment service to make sure it meets the needs of our most vulnerable claimants and that it is accessible to all. No claimants will be moved over to the new method of payment until we are satisfied that they fully understand the change and know how to collect their money.'
- #29: National scheme for pensioners likely to remain Primary legislation expected in summer 2012 Straight 10% reduction for Leeds (approx £6m) No additional funding from council ‘ Vulnerable ’ claimants will be protected against reductions (i.e people not required to undertake work-related activity) Universal Credit earnings disregard will be adjusted to prevent people moving into work facing loss of benefits of greater that 65% when local schemes are taken into account. Government response issued on 16th December 2011 confirming that local schemes will be introduced from April 2013. Responses confirmed a number of key aspects: Funding will be reduced by 10% with Government grant distributed directly to Councils and major precepting authorities on the basis of their share of council tax collection; Pensioners will be protected and Government will prescribe a national scheme for pensioners; Councils need to adopt local schemes by Jan 31st 2013; primary legislation will not be available until spring and secondary legislation will follow in early autumn; Formal public consultation on local scheme will be required DCLG has set up a Delivery Group to look at issues relating to toolkits for modelling schemes, financial issues, data sharing and systems issues and model timetables for implementation. None of these tools will be available before March 2012. Local scheme powers are contained in a new Local Government Finance Bill that also deals with localisation of Business Rates as well as reforms to Council Tax which would allow councils to amend discounts and exemptions on empty properties.
- #31: What we know From April 2013, elements of the Social Fund will be administered by local councils Social Fund elements that will stay with Jobcentre plus are: Budgeting loans Crisis loans relating to alignment loans Social Fund elements that will transfer to local councils are: Community care Grants Crisis Loans relating to general living expenses and ‘ disasters ’ Assumptions Funding will not be ring-fenced and there will be no requirement to run a social fund; scheme although councils are likely to be asked to explain what they use the funding for Funding will be less than current spend on Crisis Loans; Councils can administer crisis loans as grants rather than loans (too expensive to run a loans system); Councils can provide goods rather than cash Councils can devolve schemes to voluntary sector to run
- #35: Assessment will cover 11 areas: Planning and buying food and drink Medium scoring Preparing and cooking food Medium scoring Taking nutrition Medium scoring Managing medication Low scoring Managing prescribed therapies Low scoring Washing, bathing and grooming Medium scoring Managing toilet needs /incontinence Medium scoring Dressing and undressing Medium scoring Communicating with others High scoring Planning and following a journey High scoring Getting around High scoring
- #51: Had overview of changes Massive impact for clients and those services supporting them Advice Leeds is preparing for this Period of reduced funding and resources F2F debt advice services changing need to help more people therefore need to prioritise local face to face casework to those who need it most and where people are able to do things themselves are given information and support e.g. such as through CCCS, National Debtline Legal Aid reforms also removing Social Welfare Law – Debt, Welfare Rights and most Housing from scope. This will remove Legal Aid funding in these areas from April 13, but will begin to see impact by the end of the year. In Leeds currently funds 600 debt, 600 Welfare Rights and 1200 housing cases. Developing gateway – aim is for more coordinated advice services so clients can get appointments at appropriate advice services Have received additional funding from Council Working together to coordinate training, effective use of resources Social policy – collating feedback and information on the implementation and impact of the changes. Can feed into this, evidence form are on the Advice Leeds website.
- #52: Can use Turn2us benefits checker for this This will depend on who the landlord is and what the change is they are affected by E.g. Under-occupation rule in the social rented sector reduction is a % of the rent Money advice more detail next slide Move house – talk to landlords, housing options Guidance will be developed on DHP, may need to refer for advice Again Turn2us, Advonet to find advocate, other agencies for support Leeds Mental Health Directory online, produced by Leeds Mind , Age Concern
- #53: Check if clients are getting right benefits Online tool – Turn2us client can do themselves or you can work thro with them Or refer for advice Money advice There are a number of national websites and help-lines available Turn2us is particularly good source of information – has tools for checking benefits, money management and budget planning and to find grants for those in need. CCCS and Nat Debtline provide specialist debt advice For those who are able to take steps themselves or with some support these are great. For those who need more help, have very complex situations or need emergency help should be referred to a local agency for advice. The Advice Leeds websites has links to both national and local advice agencies Handout info on these and Financial Inclusion leaflet Housing and other support Housing Options Social Landlords – need to agree poliies and procedures National – Shelter, AdviceGuide Local – CAB, Law Centre Other support Information for Mental Health a comprehensive directory of mental health services in Leeds and beyond, covering the voluntary, community and statutory sectors. LeedsDirectory produced by Keeping House offers information on services across Leeds that can promote independence and help to support people and their carers in their daily lives. infostore The infostore is a website of information for older people in Leeds. Specific issue groups
- #54: How we can help you We are developing joint resources with the Council Timetable of changes Info and tools where clients can get help Cascading information Training /briefings We have briefing sessions – Overview of welfare reform, housing benefit changes and debt first aid, This includes step by step guide for people to use with clients Will be developing further sessions – Localised Council Tax, local Social Fund scheme, Universal Credit as detail is know to keep people up to date.