Welfare reform workshop presentation, by Ros White of Lasa

1. Welfare reform- an update
London Advice Conference – 3 July 2012
Ros White
Editor
www.rightsnet.org.uk

2. Themes of welfare reform
• simplification of the benefit
system
• reduction in spending
• making work pay
• getting claimants back to work

3. ESA and Work Programme
• 1.5m incapacity benefit claimants being migrated
to ESA between Feb 2011 to March 2014;
• of 114,000 who started reassessment process
before July 2011, 63% entitled to ESA (34%
WRA group and 29% support group);
• Minister for Employment says 700,000 people
now on work programme;
• less ESA referrals than expected to Work
Programme causing concern to providers.

4. Pensions Bill (May 2012)
• introduction of flat rate state pension
higher than pension credit (£140?)
• brings forward increase in pension
age to 67 between 2026 and 2028
• commitment to increasing pension age in
future in line with changes in longevity

5. Tax credit changes include -
• April 2011 – taper on income reduced from 39% to 41%,
childcare element reduced from 80% to 70% of costs
• April 2012 – hours requirement increase for couples from
16 to 24 combined, freeze in adult elements, reduction in
backdating from 3 to 1 months, 50+ element abolished
NB – tax credits to be superseded by universal credit from
2013

6. Welfare Reform Act 2012
[the biggest shake up of the system for 60 years]
‘Our reforms will end the absurdity of a system where
people too often get rewarded for doing the wrong thing,
and those who strive to do the best by their families get
penalised … [and] will put work, rather than hand-outs, at
the heart of the welfare system.’
Iain Duncan Smith | February 2011

7. Personal
independence
payment
Housing
Universal Benefit
benefit
credit cap
changes
Localisation
of the
social fund

8. Other measures include -
• limiting awards of contributory ESA to maximum
of 365 days – May 2012
• lone parent with children 5 and over to claim
jobseeker’s allowance – May 2012
• more stringent sanction regime – up to 3 years
• administrative penalties – minimum £350 up to
£2,000 for ’low level fraud’ from May 2012

9. Personal independence payment
• replaces disability living allowance for working age claimants
• introduced in north west from spring 2013 and everywhere
in summer 2013
• two components - ‘daily living’ and ‘mobility’ – each paid at
two rates (losing lower rate care component), no night time.
• new 'objective assessment' based on descriptors with
assessment by doctor under contract to DWP
• 3 month backwards and nine months forward qualifying
period
• DWP estimates number of working age claimants cut by
500,000 and save £2.24bn in benefit expenditure by
2015/2016
‘Reassessment of existing DLA claimants should only
proceed once DWP is confident that the assessment
process produces accurate results and is working
properly for new claimants .’
Work and Pensions Committee

10. Household benefit cap
• to be introduced from April 2013
• applies to, e.g. income support; JSA; ESA; HB & CTB; child
benefit; child tax credit; carer’s allowance …
• capped by reference to the average earnings of working
households (£350 / £500)
• exemptions, e.g. for DLA recipients; and war widows
• DWP writes to 67,000 affected families in May 2012 to offer
‘support’ to get work, with suggestion of considering moving
house
• average weekly loss £83 per week, 17% with loss of more than
£150
If the welfare state is going to gain the trust of the
British people, it needs to reflect the British sense of
fair play … no family should get more from living on
benefits than the average family gets from going out
to work.'
George Osborne

11. Housing benefit changes
• April 2011 – removal of 5 bedroom rate; cap on weekly
LHA (£250 for one bedroom, £290 for 2 bedroom etc; LHA
rates set at 30th percentile of rents rather than median;
£15 excess benefit rules abolished)
• January 2012 - shared accommodation rate rules extended
to most single people aged under 35
• April 2013 - size criteria for working age HB claimants in
the social rented sector – reduction of 14% for one
bedroom and 25% for two (average £12 and £22 a week);
and linking LHA rate increases to the CPI

12. Abolition of the social fund – April
2013
• Community care grants and crisis loans to disappear
• Social Fund Commissioner and the Independent Review
Service to be abolished
• to be replaced, from April 2013, by ‘locally-administered
assistance’
• no new statutory duty on local authorities to deliver the
service
• funding transferred from the DWP to local authorities will
not be ring-fenced
NB – council tax benefit also goes, to be replaced by local provision
with 10% cut in funding and protection for pensioners

13. Universal credit
• replaces income support; income based JSA; ESA; working tax credit and
child tax credit; and HB
• means tested, with a single taper (proposed to be 65%)
• paid in and out of work
• to be administered by the DWP …
• … based on ‘Real Time Information’ provided by HMRC (pilot of 10
employers starts in April 2012)
• tougher sanctions and conditionality
• pathfinder in North West from April 2013, new claims in one district per
region from October 2012 with rest of new claims by ‘mid 2014’. for new
claimants and those whose circumstances change;
• existing claimants migrated between 2013 and 2017 –details to be
announced this summer.
‘Both universal credit and Real Time
Information are on track and on time’
Lord Freud, April 2012

14. Impact in London
• more than 130,000 households will be impacted by
either LHA or benefit cap
• two thirds of those affected by benefit cap face
shortfall of over 10 per cent; and one sixth face loss
of over 30 per cent
• average loss across London of £105/week
Does the Cap fit?
London Councils (Nov 2011)

15. Legal Aid Reform
(Legal Aid, Sentencing and Punishment of Offenders Act 2012)
Areas of social welfare law taken out of scope include –
• welfare benefits (except to upper courts and where appeal
contains ‘legal issue’)
• debt, where the client’s home is not at immediate risk
• specified housing matters
• employment
• certain immigration cases
‘Legal aid is not justified in [welfare benefit] cases because the issues
are not generally of sufficiently high importance to warrant funding,
and the user-accessible nature of the tribunal will mean that appellants
are able to represent themselves. In addition, they may also have
access to help and advice from other sources in order to help them
resolve their issues ….’

16. The future?
• Chancellor signalled further £10bn of cuts to welfare by
2016 (on top of £17bn by 2015 already announced) in
Budget 2012;
• 25 June 2012 – Prime Minister suggests major cuts to
‘working-age benefits’ including cut to housing benefit for
under 25s, reduction in uprating, reduction in benefit
after period of entitlement and possible restriction for
families with more than three children –
‘Quite simply, we have been encouraging working-age
people to have children and not work, when we should
be enabling working-age people to work and have
children.’

17. resources
www.rightsnet.org.uk
• universal credit discussion forum … /forums
• universal credit, personal independence payment
& welfare reform workshops … /training
• universal credit and personal independence payment areas ...
/toolkit
subscribe … rightsnet@lasa.org.uk