Download - An overview of the Welfare Reforms The Welfare Benefits Unit Heather Theobold October 2012
An overview of the
Welfare Reforms
The Welfare Benefits UnitHeather 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 changes2011-2012 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 ofjobseekers.
Employment and Support AllowanceApril 2012
• Contributory work-related activity group limited to 12 months
• Waived NI contributions rules for young people abolished
Housing Benefit
• Main changes affect Private Rented Sector
• Local Housing Allowance
Housing Benefit
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
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
Local Housing Allowance Jan ‘12
• Shared room rate for 35 year-olds
Local Housing Allowance April ‘12
• Rates set annually, not monthly
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)
Local Housing Allowance
“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 accommodation.”
November 2010
Iain Duncan Smith
Secretary of State for Work and Pensions
Discretionary Housing Payments
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 ParentsMay 2012
Income Support abolished for lone parents whose youngest child is 5,
(they need to claim Jobseekers Allowance)
April 2013April 2013
Size criteria rules for working age customers living in social rented sector
HB changesHB changes 2012-2013 2012-2013
Other Benefits changes 2013Other Benefits changes 2013
JanuaryJanuary• Child Benefit withdrawn from higher
rate taxpayers
AprilApril• Household benefit payments capped• PIP introduced• Housing Benefit to be reassessed
annually
OctoberOctober• Introduction of Universal Credit
PersonalIndependence
Payments2013
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
• 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 CreditUniversal Credit
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 CreditClaimant 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
• 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
Universal Credit
• 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
Household Benefit CapHousehold Benefit Cap
• 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
Localism Agenda
Benefits changes 2014-17Benefits 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
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