Welfare Reform - Update
20 March 2014
Background
• Welfare Reform Bill - biggest shake up in welfare
reform for 60 years
• The Bill’s key aims are:
– Create the right incentives to get people into work
– Protect the most vulnerable
– Deliver fairness to those claiming benefits and to
the taxpayer, with the aim of ensuring no-one
receives more in benefits than if they were in work
Major Changes
• End of Council Tax Benefit / introduction
of Council Tax Support
• Under occupancy (social housing)
• Social Fund
• Personal Independence Payments
• Welfare Benefits Cap
• Universal Credit
Council Tax Support
•
Council Tax Benefit – abolished from 1 April 2013 and replaced by Local Council Tax
Support.
•
Pensioners cannot be disadvantaged
•
No major challenges to scheme throughout Tees Valley
•
All Tees Valley Authorities now adopted a scheme and reviewed content for year 2.
•
For 2014/15, all Tees Valley LA’s charging 20% Council Tax (unaltered from 2013/14)
apart from Hartlepool who are charging 12% (8.5% in 2013/14)
•
Payments required from people of working age
Under occupancy within social rented sector
•
Reductions in benefit introduced for Registered Social Landlords from 1 April 2013 if a
tenant has a “spare” bedroom
•
Size criteria similar to private sector, although the shared accommodation rate for under
35’s does not apply.
•
Significant increase in Discretionary Housing Payment applications (300% increase in
awards for Middlesbrough)
•
HB Reductions are 14% (1 spare room) and 25% (2 spare rooms)
•
Exemptions include pensioners and those in temporary or supported accommodation
•
Legal challenges to regulations – (01 January 1996 cases as an example)
Social Fund
•
Two elements (crisis loans and community care grants) abolished from 1 April 2013.
•
Councils can decide whether to operate a replacement scheme and given complete
discretion over how to operate and the criteria for awards.
•
Schemes working well – biggest change is no cash payments throughout Tees Valley
•
Currently grant funded – central government announced funding to end 31.03.15
•
All Tees Valley Authorities operating a local provision – all awards are a grant payment
(apart from Redcar & Cleveland who ask for repayment of award over £200)
•
Reduced number of crisis applications when compared to DWP – providing actual items
as opposed to cash payments therefore only those in genuine need applying
Personal Independence Payments
•
Disability Living Allowance being replaced by Personal Independence Payments for 16
to 64 year olds
•
New scheme has to be 20% cheaper than old benefit being replaced
•
New Claims from April 2013
•
Existing claimants reviewed from 2015
•
Claimants with lifetime or indefinite award will be affected
•
DWP writing to everyone affected.
Welfare Benefits Cap
•
Allow benefit up to a maximum of £26k per annum
•
Restrict Benefit cap of £350 (single) and £500 (couples)
•
No Cap applies if the household receives Working Tax Credit, Attendance Allowance
or Disability Living Allowance.
•
Initially implemented from April 2013 in 4 London Borough’s
•
Phased roll out to rest of country by September 2013.
•
Cap only imposed on housing benefit at present. Some may lose more benefit when
full cap introduced in Universal Credit.
•
Working with residents to mitigate impact of benefit cap where possible
•
Queries / impact not as significant on Benefit Service as was anticipated
•
Middlesbrough highest number of cases affected in Tees Valley (140 at present)
Universal Credit
• Introduced on a small scale in 2013 for out of work claims in pilot areas
• One monthly payment, in arrears, paid directly into their bank account
• Replaces Housing Benefit, Income Support, Child Tax and Working Tax
Credits, Jobseekers Allowance (income based) and Income Related
Employment Support Allowance
• Intention is to migrate all 12 million national cases on a phased basis by
2017/18. Some cases will stay with LAs after that date.
• “Digital by default” - Individuals expected to manage their own claims online and report all changes in their circumstances
• Majority of payments made to the customer – only in exceptional
circumstances will housing costs be paid direct to their landlord
• Pilots testing different rent arrears trigger figures
• Guidance on personal budgeting support published
• www.dwp.gov.uk/ucla
Any questions?