Welfare Reform Update
March 2013
Welfare Reform Act 2012
The Act introduces a wide range of reforms to:
– make the benefits and tax credits system simpler;
– create the right incentives to get more people into
work;
– protect the most vulnerable in our society: and
– deliver fairness to those claiming benefit and to the
tax payer.
2
Welfare Reform changes in 2013
April 2013
Size Criteria (under occupation penalty)
Changes to Council Tax Benefit
Social Fund Reform
Universal Credit
Phased rollout April 2013 – September 2013
Benefit Cap
Phased rollout April 2013 – October 2018
Personal Independence Payment
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Size Criteria (underoccupation)
Claimants will qualify for one bedroom
(up to a maximum of four) for:
– Every adult couple
– Any other adult aged 16 or over
– Any two children of the same sex aged under 16
– Any two children regardless of sex aged under 10
– Any other child aged under 16
– A non-resident carer (claimant/partner have disability
and need overnight care).
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Size Criteria (underoccupation)
• Size criteria will be introduced to Housing Benefit for
working age claimants in the social rented sector from
1st April 2013
• Those considered to be under-occupying their
accommodation will see a reduction
– 14% of their total eligible rent for under-occupation by
one bedroom; and
– 25% of their total eligible rent for under-occupation by
two bedrooms or more.
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Examples
Three bedroom house
Rent = £60 plus service charges of £20 (£80 in total). £5 of the service
charge is ineligible so total eligible rent for HB purposes is £75.
Two examples
If Tom and Penny live in the property with James aged three and Polly aged
one
Applying the size criteria means that the household is deemed to be underoccupying by one bedroom. A 14% reduction of £10.50 is applied to the
eligible rent of £75 resulting in HB entitlement of £64.50.
If Mohammed and Aysha live in the property , they have lived their for 15
years and their three children have all now left home.
Applying the size criteria means that the household is deemed to be underoccupying by two bedroom. A 25% reduction of £18.75 is applied to the
eligible rent of £75 resulting in HB entitlement of £56.25.
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Size criteria in Oldham
There are 8,791 working age Housing Benefits claimants in the
social rented sector
Analysis suggests that 2,526 are under occupied
• 2,064 by 1 bedroom
• 462 by 2 bedrooms or more
For those under occupying
• by 1 bedroom the average reduction in eligible rent will be
£11 per week
• by 2 bedrooms or more the average reduction in eligible rent
will be £21 per week
We estimate the total reduction in HB to be £1.7m per annum
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What are we doing?
• Key area of focus for Oldham Housing Investment
Partnership (OHIP) and established a Welfare
Reform Working Group
• Agreed Data Sharing Protocol and exchanged data
• Agreed Joint Communications Plan
• Looking to provide tenants with Financial and
budgeting support
• Monitoring the impact on own organisations
• Looking at Discretionary Housing Payments
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Discretionary Housing Payments
• Oldham allocation for 2012/13 was £173k for 13/14
that has increased to £498k
• Funding allocated to local authorities to support those
affected by the size criteria and the benefit cap
• £30m for the size criteria funding priorities
– £25 million to assist those who live in significantly adapted
accommodation due to someone in the household having a
disability.
– £5 million to assist foster carers, including those between
placements.
• New DHP policy
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Council Tax Benefit replaced by local scheme
• Reduction in funding to local authorities
– £3m reduction in funding (which includes £400k for the fire
and police preceptors)
– £1m additional income will be raised from Council Tax
changes to empty properties and second homes
– £2m less available to pay in benefit
• 10,786 claimants of Pension Credit Age are protected
• 12,916 households will have Council Tax to pay for
the first time
• 4,209 households will have an increased amount to
pay
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Oldham’s scheme for working age claimants
• Approved at full council on 12th December 2012
• The method of calculation will be similar to the
current Council Tax Benefit Scheme i.e same rules
for income capital and non-dependent charges.
• What’s different
– Benefit will only be calculated based on the Band A Rate of
Council Tax (this will affect all claimants in Band B or
above)
– Benefit entitlement will be reduced by 25%
– Second adult rebate will be abolished
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Local Welfare Provision
• Abolition of Crisis Loans for living expenses
and Community Care Grants paid by DWP Social
Fund
• New emergency provision for vulnerable groups
• Council has approved a new scheme which will
include
– preventative measures
– supply of goods
– cash in exceptional circumstances only
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Universal Credit
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Simplifying a complex system
Current system
Future system
Income Based JSA
Income related ESA
Income Support
Working Tax Credits
Child Tax Credits
Housing Benefit
Universal Credit
Disability Living Allowance
Personal Independence Payment
Pension Credit
… to include support for housing
and children
Child Benefit, Carer’s Allowance (will remain)
Council Tax Benefit (Localised Council Tax Support Schemes)
Contributory JSA and ESA (conditionality rules changing)
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Universal Credit is
A policy
that tackles welfare dependency, poverty and
worklessness by making work pay
A benefit
that replaces a complex system of working-age
benefits and credits with the Universal Credit and a
single set of rules
A gateway
that together with employment support programmes,
helps people into work
A platform
that will help deliver an internet-age service whilst
continuing face-to-face support for those who need it
An ambition
reforming welfare to transform lives
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Why Universal Credit?
• DWP are aiming to simplify a complex system of multiple benefits:
– the current system has over 10,000 pages of guidance for
advisors
– it is expensive to administer
• It aims to make work pay:
– more help for low income working families
– claimants will keep more of what they earn
– improving incentives to increase hours of work
– simplified system will make moving to work feel less ‘risky’
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Universal Credit implementation – key dates
APRIL 2013
Pathfinder begins
From
OCT 2013
National introduction of Universal Credit starts –
gradual introduction and testing of further scope
and functionality, and phasing out of claims for
existing benefits
During 2014
Expansion - new claims from people in work and
moving current claimants to Universal Credit in
phased approach
2017
Universal Credit roll-out complete
Universal Credit – implementation and transition
challenge
To deliver this DWP need to:
•
convert 12 million claims to 8 million household accounts
•
create a digital platform that both meets the needs of people
who are used to managing their lives online, whilst helping
claimants who need extra support to get online
•
ensure the right support for claimants
•
create a system capable of flexibility and continuous
improvement
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Testing before delivery
Live Innovation Trialling (started in April 2012)
• to trial components of the end-to-end Universal Credit service
proposition in a live environment with real people in real time
Model Office (first took place in April 2012)
• a series of incremental, integrated tests in a ‘controlled’
environment that will be built as the Universal Credit system,
processes and support products are developed
Direct Payment Demonstration Projects (started June 2012)
• will test key elements of incorporating housing support into
Universal Credit whilst protecting the financial position of social
landlords
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Testing before delivery
Local Authority-led pilots (to start Autumn 2012 – end September
2013)
• will test service integration, particularly design of face-to-face
service delivery, at local level for improved claimant support and
work focus
Pathfinder (from April 2013 in Greater Manchester and Cheshire)
• an early implementation of Universal Credit – to enable DWP to
learn from experience and build confidence
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Oldham
and
Universal Credit
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Pathfinder
• Pathfinder will take place from 29th April 2013.
• It will test new payment system with local
authorities, employers and claimants in a live
environment – before national roll-out.
• Will target single, newly unemployed people, with or
without rented housing costs, in Oldham, Tameside,
Wigan, and Warrington.
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Pathfinder
Stage
1
• November /December 2012
• Landlord Engagement and Awareness
• Staff Awareness
• January/February 2013
• External stakeholder engagement
Stage
2
• March/ April 2013
• To be confirmed by DWP
Stage
3
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Oldham UC Face to Face Pilot
Objectives
1. Raise awareness of Universal Credit through the development
of a comprehensive Communications and Marketing Plan
2. Support residents to access services online by providing
access to computers, developing skills and building confidence
in using self serve facilities
3. Provide residents with access to financial and budgeting support
and debt advice
4. Identify residents with complex needs and assess the level of
support required
5. Support residents to access employment
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Oldham’s Universal Credit Timeline
Date
Claimant group
November 2012 Local Authority-led (face to face) pilot commenced
April 2013
Pathfinder commences with a limited group of new
JSA claimants
October 2013
Roll out commences for a wider group of new JSA
claimants
January 2014
New Working Tax Credit and Child Tax Credit will
be claims for UC
April 2014
New IS, ESA and HB claims will be claims for UC
July 2014
Managed migrations with priority given to those who
will benefit most from the transition
From 2015 2017
A gradual managed transfer of the remaining claims
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Key issues
•
Monthly payment (in arrears)
•
Paid to one person in the household
•
Rent will no longer be paid direct to landlords , except in
‘exceptional circumstances’
•
On-line application and claims management
27
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Benefit Cap
The cap will be set at
– £500 per week for couples and lone parents
– £350 per week for single claimants.
Will not apply to those receiving
–
–
–
–
–
–
–
Working Tax Credit
Disability Living Allowance
Personal Independence Payment (from April 2013)
Attendance Allowance
Industrial Injuries Benefits
Employment and Support Allowance (support component )
War Widow's or War Widower's Pension
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NEW
Benefit Cap Introduction
• Phased roll-out
– From April 2013, starting in four local authorities in London –
Bromley, Croydon , Enfield and Haringey.
– All other Local Authorities will begin to apply the cap from
15th July 2013 and roll out will be complete by end of
September 2013.
• Phased roll-out allows:– Testing of DWP systems and processes
– Ensures the supporting products and services for both staff
and claimants are effective
– Allows DWP to build capacity to learn and respond to issues
raised in the initial phase of rollout to inform national rollout.
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An introduction to Personal
Independence Payment
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A new benefit for disabled people is being
introduced
• Personal Independence Payment (PIP) will replace DLA for eligible
claimants aged 16 to 64 from 8 April 2013
• It is part of a wider reform of the welfare system
• It remains non means tested and non taxable, and is payable both
in and out of work
• It will include an assessment of individual needs and introduces
more consistent use of supporting evidence
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PIP is designed to help with additional costs
 PIP is to help towards some of the extra costs arising from ill health
or disability
 It is based on how a claimant’s condition affects them not on what
condition they have
 There is a three month qualifying period (the time a condition or ill
health has existed before a claim is made) and a nine month
prospective test (the amount of time a condition or ill health is
expected to last when a claim is made)
 Awards will be reviewed to make sure the assessment continues to
reflect the claimant’s needs
 Reviews will be at appropriate intervals depending on how likely it is
for their condition or impairment to change
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NEW
Updated implementation timetable
Date
Claimant Group
8 April 2013
New claims in specific postcode areas in the North
West and part of the North East of England
June 2013
New claims for from all parts of the country
October 2013 Existing DLA claimants will be invited to apply for PIP
- Children turning 16
- People reporting changes of circumstances which
would affect their rate of payment (does not include
those going into a care home, hospital or prison or
change of address)
- Fixed-term DLA award recipients whose award
expires from the end of February 2014
- Self-selectors (includes those with indefinite or fixedterm awards).
October 2015 All remaining claimants in receipt of DLA will be
to October
randomly selected and invited to make a claim for PIP
2018
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PIP has two components with two different rates
Personal Independence Payment is made up of a:
– Daily living component
– Mobility component
Awards will be made up of one or both of these components
Each component will have two rates:
– Standard
– Enhanced
35
The proposed level of points needed for an award
of PIP
Daily living component (activities 1-10)
Standard rate = 8 points
Enhanced rate = 12 points
Activity
Mobility component (activities 11-12)
Standard rate = 8 points
Enhanced rate = 12 points
Possible
points
Activity
Possibl
e points
1. Preparing food
0-8
11. Going out
0-12
2. Eating and drinking
0-10
12. Moving around
0-12
3. Managing your treatments
0-8
4. Washing and bathing
0-8
5. Managing your toilet needs
0-8
6. Dressing or undressing
0-8
7. Communicating
0-12
8. Reading
0-8
9. Mixing with others
0-8
10. Making decisions about money
0-6
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There are 5 key stages to a new claim for PIP
1. Thinking about claiming – Information will be available
online, leaflets and through support organisations
2. Making a claim – A claim will be made by a telephone call to
DWP initially and an application form will be posted out.
Claiming online will be available from Spring 2014.
3. Application -The claimant or their support will complete the
claim form and post back to DWP with any supporting
evidence.
4. Assessment – Most people will be asked to attend a face to
face consultation with a health professional. They can take
someone along for support.
5. Decision – A decision will be made by a DWP Case Manager
on entitlement including level and length and of award.
Existing DLA claimants will be invited to claim PIP individually
37
NEW
Reassessed DLA cases by likely
outcome of award under PIP
Outcome
Number of claimants
%
Award increased
510,000
29
Award unchanged
270,000
16
Award decreased
510,000
29
No award
450,000
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Total
1.74 million
DWP 19/12/12
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What are we doing?
• Raising awareness and seeking opportunities to work
together
• We have an action plan and communications plan
• Working with wide range of stakeholders in the Borough
• Working closely with DWP
• Preparing a draft local welfare scheme for consideration
• Reviewing the Discretionary Housing Payment Policy
• Linking into Welfare Rights Take Up Activities and
Council’s other campaign e.g energy switching
• Appointing two new Welfare Rights Officers
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Communications Activities - strategy
The campaign will take a two tiered approach:
1. Multi channel promotion across the borough utilising
all external and internal communications and
marketing opportunities. This will include Borough
Life, social media, district screens, online, print and
direct mail, partners, advertising and media.
2. Delivery of targeted ‘drop in’ events (in areas that will
be significantly impacted by WR) run in partnership
with other local agencies, councillors and other
departments. An event ‘toolkit’ will be developed to
enable these events to be delivered.
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Communications Activities – strategy cont
The campaign will run in two phases:
1. Pre - changes: January – April 2013.
Raising awareness / encouraging residents to make
preparations
2. Post changes: April 2013 onwards
Impact of WR changes will be real and felt by
residents, messages will be tailored accordingly
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Communications Activities – campaign identity
A campaign identity will be established to ensure, as far as possible,
a level of brand awareness in residents:
42
Communications Activities – key messages
•
There are two key messages:
Benefits are changing (Welfare Reform details)
Make sure you’re prepared (support offer – see below)
•
There will also be an overarching message of ‘make the most
of your money’. This will signpost residents to money saving
opportunities such as the Energy Switching Scheme, Oldham
Credit Union, Fairs Fair Campaign, The Co-operative Shop etc.
www.oldham.gov.uk/yourmoney
•
Signposting will also direct residents to other support
mechanisms such as debt advice, skills and training, family
budgeting courses, counselling services etc.
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Communications Activities –
www.oldham.gov.uk/yourmoney
Includes:
• Money matters – benefits and debt advice, savings
and loans etc
• Jobs, training and courses – jobs, training,
apprenticeships, work experience, volunteering and
learning courses etc
• Housing – mortgages, mortgage rescue, renting,
homelessness, council housing etc
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Communications Activities –
www.oldham.gov.uk/yourmoney
• Family and emotional support – support for families
and counselling services to help you cope
• Ways to save money – advice, tips and tricks to help
you save money
• Free activities – have fun on a budget
Drop in events will be promoted on both Welfare
Reform and Your Money pages
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How can you help?
•
•
•
•
Help us to identify and support those affected
Signpost people to the Council’s website
Promote the events that are taking place
Let us know if you are interested in getting involved
the Universal Credit Pilot we are looking for
Community Champions who can support online
access
• Let us know your ideas!
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Any Questions
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