Welfare Reform – Overview of
the changes
January 2013
Lisa Black – Head of Revenues, Benefits and Welfare Rights
Welfare Reform Act - Overview
- Most fundamental reforms to the social
security system for 60 years
- Changes began in 2010, still happening
now and continue in 2013 and beyond
- Changes in:
- Housing and Council tax Benefit
- Disability related benefits
- “Out of work” related benefits
Changes to the current welfare
system – quick recap so far
•Up-rating of all benefits linked to Consumer Price Index
•Tax credits reduced in 2011, further squeezes in 2012
•Child Benefit frozen
•Lone Parents transfers to Job Seekers Allowance when youngest is 5
•Education Maintenance Allowance abolished
• Transfer from Incapacity Benefit to Employment Support Allowance
begun
•Winter Fuel payments reduced
Housing Benefits
•Local Housing Allowance reduced to 30th percentile and limited to £400
per week
•Non-dependent deductions increased significantly
•Extra room for overnight carer
•Local Housing Allowance rate for under 35s limited to room in a shared
house
Headline Changes to the current
welfare system – 2013
January 2013
Child Benefit - removed gradually for those on incomes of £50k -£60k;
removed completely if income over £60k
April 2013
Council Tax Benefit abolished
Social Fund abolished
Working age benefits uprated by 1%, not linked to prices (CPI)
DWP changes that Councils have to implement:
Housing Benefit under-occupancy changes take effect (for working age and
social rented sector)
Benefit cap introduced – phased in with 4 London LA’s first
Other DWP changes
Disability Living Allowance replaced by Personal Independence Payments
October 2013
Universal Credit begins
Nottingham City Council position
• Full Council Motion adopted September
• “This Council believes that the Governments intention to
transfer responsibility for Council Tax Benefits to Local
Authorities is being carried out in an unfair way which
severely disadvantages some of the most vulnerable
people in Nottingham.
• It resolves to lobby the Government to rethink its position
both in terms of current funding allocation and future
uprating”.
• Councillor Graham Chapman – Portfolio holder
Welfare Reform: Localisation Council tax Support scheme
 Been out to consultation
 DCLG have offered £100m to reduce impact of local scheme
 Caveats attached
 Decision to be reached
 Scheme proposals
 Putting a maximum limit on the amount of council tax
support that can be paid to working age people – where
everyone has to pay at least 8.5% towards their Council
Tax bill
 And:
 removing second adult rebate
• setting a minimum award level of 50p per week
Welfare Reform: Localisation
Discretionary Social Fund
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Department for Works and Pensions (DWP) delivers and provides
Discretionary Social fund payments for Community Care Grants (CCG) and
Crisis Loans for Living expenses (CLLE’s).
From April 2013, the Welfare Reform act abolishes the Discretionary Social
Fund
Instead:
 Funding devolved to upper tier Councils to implement ‘locally appropriate
solutions’
 Programme funding is reduced – for Nottingham the allocation for 13/14 and
14/15 is £1.8m

The Government has not placed any new duties to provide any local
emergency hardship support BUT it expects:
 “the funding to be used to provide new local provision in lieu of the social fund
and concentrated on those facing greatest difficulty in managing their income”.
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AND:
 households are expected to face increasing hardship due to the economic
climate and wide welfare changes
•
Demand in Nottingham - The current DWP Social Fund is oversubscribed
Welfare Reform: Localisation
Discretionary Social Fund
 NCC has approved the use of the full £1.8million to create an
Emergency Hardship Scheme which includes:
 - Emergency Support - critical short term financial help as a result
of unavoidable emergency or disaster e.g. vouchers or cash to
provide essential food or heating
 - Household Support - support to establish or maintain
independent living e.g. white goods and furniture
 And
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Emergency Loan Scheme – to provide support to those that do
not directly meet the eligibility criteria.
Welfare Reform:
Housing Benefit – Under-occupancy
- Rules changing for Housing Benefit from
April 2013 for people who live in social
housing.
- Reduces the amount of help with rent for
working age people who under occupy
their home
- 1 “extra bedroom” = Eligible rent reduced by
14%
- 2 or more “extra bedrooms” = Eligible rent
reduced by 25%
Welfare Reform:
Housing Benefit – Under-occupancy
- Reduction will be through Housing Benefit
- 7,000 households in Nottingham affected
- DWP advice on how to manage the
financial impact:
- Renting out the “extra bedroom”
- Transfer to a smaller home
- Apply for a Discretionary Housing Payment
Welfare Reform:
Housing Benefit – Benefit Cap
• Cap set at:
– £350 a week for single adults without children
– £500 a week for couples or lone parents
• Benefits included are:
– Job Seekers Allowance; Income Support; ESA
(working group); Housing Benefit; Child Benefit; Child
tax credits; Carers allowance; Maternity allowance
• Not included are:
– Social fund loans; Free school meals; Council Tax
Benefit (or Local replacement); payments for child
care costs
Welfare Reform:
Housing Benefit – Benefit Cap
• Cap will not apply where someone in the
household
– Obtains work and becomes entitled to
Working Tax Credit
– receives War Widows or Widowers pension;
DLA (PIP); AA; or support component of ESA
• Cap applied through reducing Housing
Benefit
Welfare Reform – Universal Credit
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The Government’s stated aims are for Universal Credit to:
• make work pay as people move into and progress in work
• help lift people out of poverty
• reduce the ongoing cost of the welfare system
• reduce administrative cost and complexity
• reduce fraud and error by simplifying and streamlining the
system
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How Universal Credit is intended to work:
• managed by DWP, with potential role for LAs in delivery
80% claims to be managed online
single monthly payment per household (like a salary)
real time data on earnings (requires 2 new IT systems)
‘taper’ approach to withdrawing UC so work always pays
No-one should be worse off than existing benefits
Welfare Reform – Universal Credit
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Universal Credit, to begin being introduced October
2013
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Transition to Universal Credit in 3 phases:
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Phase 1 (2013-14) – new claims/ change in circumstances
Phase 2 (2014-15) – households who will ‘benefit most’
Phase 3 (2015-17) - remaining households
Awaiting National Roll out plan
Welfare Reform – Universal Credit
• Current system
Income related JSA
Income related ESA
Income Support
Working Tax Credits
Child Tax Credits
Housing Benefit
Universal Credit
Pension Credit, Child Benefit, Carer’s Allowance (will remain)
Council Tax Benefit (Localised Council Tax Schemes)
Contributory JSA and ESA (still considering how these will work)
What are we doing to prepare?
• Working with partners to boost citizens’ financial
capacity and access to affordable banking services
– Nottingham Credit Union – Developing “Jam Jar”
accounts to help manage priority payments
• Shaping communications with RSL’s; Advice Sector
and Faith groups to raise awareness of the changes
• Delivering awareness sessions across partners; front
line colleagues and volunteers to create informed
networks
• Sharing information to identify households that will
be directly affected to offer support where we can
• Policy – Developing local policies to respond to the
changes; influencing thinking (consultation responses);
aligning all policy decisions on welfare reform;
understanding impact and risk
How you can help….
- Spread the word
- Help people to understand;
- Pay attention to letters and information that
they receive
- Tap into the support and advice available
- Advice sector
- DWP & HMRC
- RSL’s
- Credit Union awareness
- Feedback to us; emerging questions;
concerns
Thank you
• Feedback or Questions?