Welfare reform:
Implications and
Options for Northern
Ireland
Goretti Horgan
 Much of this presentation is based
on work carried out for the Northern
Ireland Commissioner for Children
and Young People (with Marina
Monteith, Unesco Centre at Ulster).
 Full report available at:
http://www.niccy.org
The Assembly CAN make a difference
Section 87 of the NI Act 1998 (Consultation and co-ordination):The Secretary of State and the Northern Ireland Minister having
responsibility for social security (“the Northern Ireland Minister”)
shall from time to time consult one another with a view to
securing that, to the extent agreed between them, the
legislation to which this section applies provides single
systems of social security, child support and pensions for the
United Kingdom
There is no need to get Westminster’s permission for changes
to the Bill – although cost has to be taken into account
 Prohibitive cost means that breaking altogether from
parity is not an option – Universal Credit will have to be
introduced. However, this does not mean that the
Assembly cannot decide not to introduce other elements
of welfare reform.
 Also, the Assembly can decide that elements of the rules
around Universal Credit will be different in Northern
Ireland than in Britain.
 This presentation will look at some of those possible
changes
Source: Joyce, (2012)
 This most recent IFS analysis confirms largest average
losses as % of income from reforms currently before
Assembly will be in bottom half of the income distribution
and households with children are set to lose the most
from the proposed reforms. Why?
 Benefit rates will reduce as the Consumer Price Index
(CPI) is used to uprate them rather than the Retail Price
Index (RPI) or the Rossi index;
 Contributory Employment and Support Allowance (ESA)
is to be time-limited to one year. Many of those in the
Work-Related Activity Group (the majority of ESA
recipients), will lose ESA altogether due to means testing;
 Cash freezes to Child Benefit and Working Tax Credit will
gradually reduce income.

Why is NI so badly hit by welfare reform?
 Higher proportion of households with children than any
other region of the UK (34%); the UK average is 28%
 As well as having more families with children, NI has
more children within families, an average of 2.4
children per family compared to an average 1.8 in GB.
 Around 23% of working age people claim a key benefit,
compared to 13% in GB; (Wales 19%)
 NI has twice the proportion of DLA awards than the
average for GB and a considerably higher proportion
than the next highest regions of Wales and Scotland
Behind Changes to Housing Benefit
 NI’s lower wages or higher rate of benefits receipt
higher
proportion of tenants (social and private rented) receiving HB
 In England, 24% of private renters are on housing benefit. In
Northern Ireland, it’s more than double that at 57%.
 Housing Benefit in respect of rent in NI was £312m in
2003/04, by 2010/11 it had risen to £573m – mostly as a
result of the increase in Private Rented Sector housing.
 2009 House Condition Survey – 124,500 private rented
properties or c17% of total housing stock. Over a third (37%)
of lone parent households live in private rented sector.
 Average amount paid by private rented tenants in Northern
Ireland to supplement LHA was £20 a week. (McAnulty and
Gray, 2009).
Since April 2011 HB has been calculated on
30th percentile rent in private sector
Changes in Mortgage Interest Support
Increasing age in relation to single room rent
from under 25 to under 35
All above
problems meeting housing costs
Introducing size criteria in social housing
sector contained in Bill could cause housing
crisis
Table 1
Difference From Bedroom Standard By Tenure 2010-11
Difference From Bedroom
Standard (Persons)
Owned
Outright
Owned With
Rented
Mortgage
From NIHE
Other
Rented
1 Or More Below Standard
2
3
3
2
Equals Standard
7
15
32
29
1 Above Standard
24
38
42
40
2 Or More Above Standard
68
44
23
29
Source: NIHE Housing Condition Survey 2010-11
Assembly MUST think through implications
of changes in Housing Benefit and eventual
social cost of increased homelessness.
 As a matter of urgency, DSD needs to work with mortgage
lenders to explore ways in which families can remain in
houses that are being repossessed, especially since the
state of the housing market means those houses are likely
to remain vacant
 DSD could work with mortgage lenders and landlords to
bring down PRS rents through reductions in rent-tomortgage ratios demanded by mortgage lenders
Actions that require costing:
 The Assembly should ask for cost of not introducing
the “bedroom tax”, as the under-occupancy rules are
known colloquially OR it could agree to introduce it,
but not until there is housing stock to meet needs of
those in ‘under-occupied’ homes (which may cost
temporarily)
 ‘Under-occupied homes that contain children could be
exempted from ‘bedroom tax’
 Defer under‐occupancy penalty where tenant is willing
to relocate but no suitable alternative accommodation
is available;
DLA and Personal Independence Payment
 Intention is to cut 20% of the budget
 Those receiving DLA for reasons of mental illhealth main target for cuts
 NI has 25% more people awarded DLA for
reasons of mental ill-health than rest of UK –
a full 3 percent of our population
 Higher levels of mental ill-health linked to
PTSD from conflict
What can the Assembly Do?
 Assembly could set up an expert group to develop a WCA
and PIP assessment that takes into account the particular
issues of a region emerging from conflict where our high
levels of mental ill-health are severely exacerbated by PTSD
 AdviceNI suggest that the contract with the medical
assessment provider in NI should contain: annual reviews of
performance; penalties for under‐performance (including
complaints, number / percentage of decisions based on the
medical report that are subsequently overturned at appeal).
 Those with the severest disabilities could be ‘screened out’
and exempted from the trauma of the assessment process
Benefit Cap
 At least 6,500 children in Northern Ireland will see their
families lose because of the benefit cap – this is
because there are 5 or more children in their family.
 Families with three or more children where there is a
severely disabled child are at risk of being affected by
the benefit cap
 Given that Northern Ireland prides itself on having
strong family values, the Assembly will have to consider
whether it thinks that those on benefits should be forced
to limit their family size or whether there are ways of
helping such families to meet the needs of their children
outside of UC.
Social Fund
 Over half (52%) of all awards of Community Care
Grants are to lone parents (DSD, 2011).
 Nine out of ten parents of severely poor children
have no money to replace worn or broken furniture
or broken electrical goods (Monteith and
McLaughlin, 2004).
 Assembly must ensure that enough money is
allocated to meet the basic material needs of
families with children and that this money,
however it is to be administered, is ring-fenced.
 Ensure that there is an effective review / appeals
mechanism in place;
Conditionality
 The Assembly can ensure that UC regulations
around conditionality and sanctions take into
account Northern Ireland’s high levels of mental illhealth and its lack of accessible and affordable
childcare.
 Provisions about ‘best interests of the child’ in the
current JSA regulations must be replicated for UC
regulations
 Parents bringing up teenage children in
disadvantaged areas must be allowed to work only
during school hours.
How far can the Assembly Go?
 Almost certain to have Westminster’s agreement to
fortnightly payments and to maintain direct payment
to landlords.
 Willing to break parity in relation to Corporation Tax,
at a cost of £4 - 700 million – why not break it to a
far less costly degree to protect vulnerable families?
 Cost may be less in long run in any case as some of
these reforms will lead to homelessness and other
costly social problems