An overview
of the
Welfare
Reforms
The Welfare Benefits Unit
Heather Theobold
October 2012
Welfare Reform
Welfare Reform
Aims to:
• Improve work incentives
• Simplify the benefits
system
• Make it less costly to
administer
• Make significant savings
‘a life on benefits will no
longer be an option’
Ian Duncan Smith
Benefits Changes 2011
• £190 Health in Pregnancy Grant abolished
• £500 Sure Start Maternity Grant paid to first
child only
• Child Trust Fund stopped for those born after
1/1/11
• Child Benefit frozen for 3 years
• Most benefits increased by CPI (Consumer Price
Index) not RPI (Retail Price Index)
• Education Maintenance Allowance abolished
2011-2012 changes
Migration to Employment
and Support Allowance
Migration to Employment and
Support Allowance
• Commenced October 2010
• Change to Limited Capability for Work
Assessment in March 2011
• Protection of amount of benefit received
leading to a static income for those
transferred
• Increase in number of
jobseekers.
Employment and Support
Allowance
April 2012
• Contributory work-related activity
group limited to 12 months
• Waived NI contributions rules
for young people abolished
Housing Benefit
Housing Benefit
• Main changes affect Private Rented Sector
• Local Housing Allowance
Housing Benefit

Deductions for non-dependants
increased
Local Housing Allowance April ‘11




£15 weekly top up ends
Max LHA level 4 bedroom
rate
Maximum national upper
limit
Additional bedroom for
overnight non-resident carer
Local Housing Allowance
Reduction in Rates
• Reduced to 30th percentile from April ‘11 for
new claims
• Re-assessed from ‘Anniversary Date’ for
existing claimants
• 9 months transitional protection January ‘12
Local Housing Allowance Jan ‘12
• Shared room rate
for 35 year-olds
Local Housing Allowance April ‘12
• Rates set annually, not
monthly
Local Housing Allowance
Estimated impact
“We estimate that, in total, 99 per cent of cases
assessed under the Local Housing Allowance
arrangements (1.02 million at March 2010) will
be affected in some way by the changes to the
Local Housing Allowance arrangements ”
(Explanatory memo to SSAC para 40)
Discretionary Housing Payments
“There should be no need
with the discretionary
allowance that anyone
should be made homeless.
“There is no need for
councils to think or to worry
about the idea of having to
put people into homeless Iain Duncan Smith
accommodation.”
Secretary of State for
November 2010
Work and Pensions
Changes to Tax Credits
2012
Changes to Tax Credits
• Couples must work 24 hours, one
doing at least 16 hours
• 50+returners category withdrawn,
60+introduced (16 hrs work)
• Family element included in full
assessment, removal of £40,000
threshold
• First £2,500 of income reduction
will be ignored
• Backdating reduced to 1 month
Lone Parents
May 2012
Income Support abolished for lone
parents whose youngest child is 5,
(they need to claim Jobseekers
Allowance)
Changes for 2013 and
beyond
HB changes 2012-2013
April 2013

Size criteria rules for working age customers
living in social rented sector
Other Benefits changes 2013
January
• Child Benefit withdrawn from higher
rate taxpayers
April
• Household benefit payments capped
• PIP introduced
• Housing Benefit to be reassessed
annually
October
• Introduction of Universal Credit
Personal
Independence
Payments
2013
Personal Independence
Payments
• Replace DLA for 16 to 64
• 2 components @ standard and
enhanced rates
• Awarded and reviewed through an
objective assessment process.
• Aim to target those with greatest need
for:
– support; and
– to overcome barriers
Universal Credit
2013
Universal Credit
• Planned introduction 2013
• One single benefit for working age people
• Replaces existing income based benefits:
– Income Support
– Jobseeker’s Allowance (IB)
– Employment & Support Allowance (IR)
– Working Tax Credit
– Child Tax Credit
– Housing Benefit
Universal Credit
=
single benefit of many elements
• Income Element – living costs
• Housing Element – rent or mortgage costs
• Disability Element – long-term incapacity for
work
• Child Element – children and child care
costs
Universal Credit
Claimant Commitment
to agree – on line, telephone, face to face
Work-related requirement
• No work-related requirement
• Work-focused interviews
• Work-focused interviews and
work prep
• All work-related requirement
Universal Credit
• Simpler! ??
• Transitional protection for those already
claiming Working Tax Credits
• New claimants for UC with £16,000 or
over will be excluded
• Couples with one member under PCQA
need to claim UC and not PC
• Some existing premiums abolished
Household Benefit Cap
• For single person proposed at £18,200 a year
or £350 per week
• Family proposed at £26,000 a year or £500
per week
• Exemptions include working households or
on DLA/PIP.
• Estimated 50,000 households with reduced
income
Localism Agenda
• April 2013 Council Tax Benefit abolished
• New LA schemes introduced
• Cost 10% less than CTB
• Social Fund – Crisis Loans and
Community Care Grants abolished
• Replaced by local LA schemes, food
vouchers, furniture stores, food banks
etc
Benefits changes 2014-17
• No new claims for Tax Credits
• Migration to Universal Credit for all - in
and out of work
• Monthly payments of Universal Credit
Do you have any questions ?