2. Welfare Reform
The timetable for
change
www.adviceleeds.org.uk March 2012 2
3. April 2011
• Child Benefit rates frozen for three years
• Higher rate mobility component of
Disability Living Allowance to cover those
with a severe visual impairment
• Consumer Price Index (CPI) will replace
Rossi and Retail Price Index (RPI) as the
tool used to decide benefits increases in
April each year
www.adviceleeds.org.uk March 2012 3
4. • Some Jobseeker's Allowance claimants
may have to do unpaid work, or work-
related activity
• Pension Credit - Maximum Savings
Credit award to be frozen for four years
• Sure Start Maternity Grant will only be
available for the first child
www.adviceleeds.org.uk March 2012 4
5. Housing benefit
• £15 excess rule will be removed
• Local Housing Allowance (LHA) restricted to four-
bedroom rate regardless of household size
• Non-dependant deductions (NDD) to be increased
(up-rated) on the basis of prices using the Consumer
Prices Index
• Baby element of family premium will no longer be
available
• An extra room will be allowed for a non-resident carer
• New maximum LHA rate based upon property size
• LHA rates will be at a value of 30% of the average
rents in an area
www.adviceleeds.org.uk March 2012 5
6. Excess benefit rule removed
Old rules
Rent charged is £60 per week
LHA is £100.38
HB worked out on actual rent plus max £15 excess.
HB paid at £75 per week.
New rules
Rent charged is £60 per week
LHA is £100.38
HB worked out on actual rent with no excess.
HB paid at £60 per week.
www.adviceleeds.org.uk March 2012 6
7. Excess benefit rule
New claims
- no excess from April 2011
Existing claims
- excess stops on Annual Review date
www.adviceleeds.org.uk March 2012 7
8. 4 bedroom maximum
The 5 bedroom rate was abolished for
new applicants from April 2011
March 2011 5 bed rate £335.00 p/week
April 2011 4 bed rate £173.08
p/week
www.adviceleeds.org.uk March 2012 8
9. 4 bedroom maximum
• Existing applicants have 9 months
protection from review date.
Example
• Claim made April 2010 – rent used £325.00
• Reviewed April 2011 – should fall to £173.08
but granted 9 months protection
• Rent reduced to 4 bed rate January 2012
(£184.62)
www.adviceleeds.org.uk March 2012 9
10. 30th percentile
• LHA rates originally based on the 50th
percentile of market rents.
• 50% of the rents above the LHA and 50%
below
From April 2011
• Based on the 30th percentile
• 30% of rents below the LHA and 70% above
www.adviceleeds.org.uk March 2012 10
11. Reduction in LHA - Leeds
March 2011 April 2011
Shared 61.50 59.00
1 room 109.62 98.08
2 room 126.92 114.23
3 room 144.23 126.92
4 room 206.54 173.08
5 room 335.00 XXXXX
www.adviceleeds.org.uk March 2012 11
12. Reduction in LHA - Leeds
New claims after April 2011 – applies straight
away
Existing applicants as at April 2011 have 9
months protection from review date
Example (1 bed rate)
• Claim made January 2011 – rent used £109.62
• Reviewed January 2012 – should fall to £100.38 but
granted 9 months protection
• Rent reduction takes effect from October 2012
www.adviceleeds.org.uk March 2012 12
13. Maximum LHA
From April 2011 the weekly LHA cannot
exceed
• £250 for a one bedroom property
• £290 for a two bedroom property
• £340 for a three bedroom property
• £400 for a four bedroom property
National figures - No claims in Leeds affected
www.adviceleeds.org.uk March 2012 13
14. Carers – Extra Room
• Extra room allowed when a claimant with a
disability
has a non resident carer
• Must need overnight care and be getting
– Attendance Allowance, or
– the middle or high rate of DLA for care, or
– if not getting one of these benefits will need to
provide sufficient evidence to show that they
require overnight care
www.adviceleeds.org.uk March 2012 14
15. Carers – Extra Room
The local authority must be satisfied that
they
• reasonably require, and
• have arranged for one or more people
– to be engaged in providing overnight care
– regularly stay overnight to provide care
– be provided with the use of a bedroom
which is additional to those used by the
claimant.
www.adviceleeds.org.uk March 2012 15
16. Non-dependent deductions
How the rates have increased since 2010
2010/11 2011/12 2012/13
Other income 7.40 9.40 11.45
Gross income levels based on 2012/13 figures (in work)
less than £124.00 7.40 9.40 11.45
£124 to £182.99 17.00 21.55 26.25
£183 to £237.99 23.35 29.60 36.10
£238 to £315.99 38.20 48.45 59.05
£316 to £393.99 43.50 55.20 67.25
£394 and above 47.75 60.60 73.85
A further comparable increase is planned for April 2013
www.adviceleeds.org.uk March 2012 16
17. January 2012
Housing benefit
• the age threshold for the shared
accommodation rate of Local
Housing Allowance (LHA) will be
increased from 25 to 35
www.adviceleeds.org.uk March 2012 17
18. Shared Room Rate
• age limit increasing from under 25 to under 35
January 2012 LHA rates
Shared £61.50
1 bed £100.38
loss in HB of £38.88 per week (£168.50 per
month)
• 1500 people in Leeds will be affected
www.adviceleeds.org.uk March 2012 18
19. Shared Room Rate
New claims from January 2012 –
applies immediately
Existing claims
• Next review date, or
• At end of 9 month transitional
protection from April 2011 changes
www.adviceleeds.org.uk March 2012 19
20. Shared Room Rate
Exemptions – shared room rate does not
apply
• Responsible for a child
• Have a non resident carer who regularly
stops overnight to provide care
• Have another adult who lives in the home
(for example non dependant)
• If the tenant qualifies for a severe disability
premium on their Housing Benefit
• Care leavers under the age of 22
www.adviceleeds.org.uk March 2012 20
21. Shared Room Rate 25-35
Two new exemptions introduced
1) Over 25 and subject to active multi-
agency management under the Multi Agency
Public Protection Arrangements (MAPPA)
2) Over the age of 25, and spent more than
3 months in a specialist hostel for the
homeless
www.adviceleeds.org.uk March 2012 21
22. April 2012
ESA
• People in the Work Related Activity
Group of contribution based ESA
will have their claims limited to one
year
• Contributory ESA in youth to be
abolished
www.adviceleeds.org.uk March 2012 22
23. Tax credits
• 50+ element removed from Working Tax Credits (WTC)
• Couples with children must work at least 24 hours a week
between them, with one working at least 16 hours to
qualify for WTC
• If your income falls by up to £2,500 during the Tax Credit award
year, the amount you get will not be revised to see if you are
entitled to a higher Tax Credit payment
• Second income threshold removed
• Backdate for new applications and changes of
circumstances for up to one month instead of three
• Couple and lone parent rates of Working Tax Credit will
be frozen
www.adviceleeds.org.uk March 2012 23
24. • Income support - Lone parents with a child aged 5 and over
not longer eligible for IS
• Tougher sanctions for failure to meet conditionality
requirements
• Housing benefit - A further £40million per year will be added
to the Discretionary Housing Payment budget
• From April 2012 the LHA will be frozen for one year
• DLA mobility Component withdrawn for those in residential
care (now postponed)
• New payment system will replace benefits cheques (date to
be confirmed)
www.adviceleeds.org.uk March 2012 24
25. April 2012 continued
Fraud and Error changes
• Cautions scrapped
• Admin Penalty increased to 50% of
overpayment or £350 whichever is greater
• 1-strike sanctions extended
• £50 civil penalty introduced for
failure/negligence in reporting changes
www.adviceleeds.org.uk March 2012 25
26. January 2013
• Child benefit abolished for higher
rate tax payers
www.adviceleeds.org.uk March 2012 26
27. April 2013
• Council Tax Benefit is to be replaced by
localised support for Council Tax
• Social Fund scheme transferred to councils
Housing Benefit
• Size criteria will apply in the social rented
sector for working-age claimants
• LHA rates will be increased in line with
the Consumer Price Index instead of the
market rents in each area
www.adviceleeds.org.uk March 2012 27
28. Local scheme of support for
Council Tax
• The new Council Tax Support scheme
means a 10% reduction in funding in
comparison to the current scheme
• Pensioners protected (may be potential to
also protect other groups)
• No decision on scheme to be adopted in
Leeds
www.adviceleeds.org.uk March 2012 28
29. Local scheme of support for
Council Tax
Customers affected in Leeds
• 94k claims for CTB received in 2010/11
of which 35k from pension age
claimants and 15k from vulnerable
claimants; overall 10% reduction in
funding would need to be applied to the
remaining 44k claimants. LA estimates
that this would mean a reduction of
18% in CTB for these claimants
www.adviceleeds.org.uk March 2012 29
30. Social Fund scheme
transferred to council
Crisis Loans and Community Care Grants to
councils
Budgeting Loans stay with Jobcentre Plus
Funding for Crisis Loans to be reduced
No compulsion to run a scheme
Councils can provide goods rather than cash
Councils can devolve schemes to voluntary
sector to run
www.adviceleeds.org.uk March 2012 30
31. Social Housing – Size Related Criteria
• Applies to both LA and Housing Association
tenants
• Size criteria similar to LHA
• Reduction in HB will be achieved by reducing
eligible rent for HB purposes by 14% where
1-room too many and 25% for 2 rooms or
more
• Average loss of Housing Benefit of £13 per
week for 670,000 claimants nationwide
www.adviceleeds.org.uk March 2012 31
32. Size Related Criteria - Impact on Leeds
LA analysis of caseload suggests that:
– 360 tenants would lose £0.01 to £5.00 pw
– 4300 tenants would lose £5.01 to £10.00 pw
– 1230 tenants would lose £10.01 to £15.00 pw
– 1360 tenants would lose £15.01 to £20.00 pw
– > 50 tenants would lose >£20 pw
• Assumes 14% cut for 1-bed and 25% cut for
2-bed or more
www.adviceleeds.org.uk March 2012 32
33. April 2013 continued
•DLA to be replaced with a new benefit called
Personal independent payment
•Tax credits - Any rise in income of £5,000 or
more during the award year will be taken into
account when finalising your Tax Credit
award
•Total household welfare benefit cap to be
introduced
www.adviceleeds.org.uk March 2012 33
34. Personal Independent Payment
• From April 2013, Personal Independence Payments
replace DLA for claimants aged between 16 and 64
• Programme of reviews will take place to reassess
current DLA recipients for PIP
• Assessment will cover 11 areas
• Claimants will need to score over a certain threshold
of points to be entitled to PIP with level of
entitlement affected by level of score
• DWP impact assessment states that changes will
save £2.1bn
• DWP stats suggest around 21,000 DLA recipients in
Leeds aged between 16 and 64
www.adviceleeds.org.uk March 2012 34
35. ‘Benefit Cap’
• The ‘benefit cap’ will limit the amount of
benefit that a family not in work can
receive to the average earnings
• The ‘benefit cap’ will be applied by
local councils who will reduce the
amount of Housing Benefit in payment
until the cap limit is reached
www.adviceleeds.org.uk March 2012 35
36. ‘Benefit Cap’
• Cap will apply to combined income from:
– JSA, IS, ESA, HB, Child Benefit, Chid Tax Credit,
Industrial Injuries Benefit, Carer’s Allowance
• People getting the following benefits will
be exempt from the cap:
– DLA, Personal Independence Payment, Constant
Attendance Allowance and Attendance
Allowance;
– War Widows and War Widowers will also be
excluded as will people working sufficient hours
to get Working Tax Credits
www.adviceleeds.org.uk March 2012 36
37. ‘Benefit Cap’ - Impact on Leeds
• Latest analysis indicates 184 families in Leeds
would be affected with reductions ranging from
£1.60 a week through to loss of full Housing Benefit
• All are families with 4 or more children
• 14 families lose all their Housing Benefit entitlement
(including some families renting in the social sector)
with all these families having 7 or more children
• Average reduction in Housing Benefit for the 184
families affected is £65pw
www.adviceleeds.org.uk March 2012 37
38. October 2013
• Universal Credit to be introduced – a
new benefit that will replace tax
credits, HB, IS, income based JSA
and ESA
www.adviceleeds.org.uk March 2012 38
39. Universal Credit
• Will be delivered by DWP from Jobcentre Plus and
HMRC teams
• Will be ‘digital by default’ with expectations that
50% of claimants will claim online from October
2013 rising to 80% by 2017
• Jobcentre Plus will provide ‘front of house’ services
in the first instance with longer term delivery model
to be decided in 2015
• Will normally be paid monthly in arrears directly to
the claimant (including housing rent element and
mortgage interest element)
www.adviceleeds.org.uk March 2012 39
40. Universal Credit
• All claimants need to sign a ‘Claimant
Commitment’ setting out conditionality
requirements. Conditionality
requirements are expected to apply to
in-work claimants earning up to
£212.80 a week (35hrs x National
Minimum Wage)
www.adviceleeds.org.uk March 2012 40
41. Universal Credit
• Migration Strategy:
– Phase 1 (Oct 13 – Mar 14): new claims
and ‘natural’ migration i.e. certain changes
in circumstances
– Phase 2 (Apr 14 – Dec 15): those likely to
benefit from Universal Credit
– Phase 3 (Dec 15 – 2017): managed
migration by LA boundary
www.adviceleeds.org.uk March 2012 41
42. Save the Children CEO Justin Forsyth said -
'Universal Credit will help some families, but
mums working hard to stay above the
breadline are its big blind spot. It's incredibly
hard bringing up 3 kids on £370 a week -
losing almost a fifth of that will push many
families over the edge.
The government must make sure mums who
want to work keep more of their incomes and
get more support with childcare. Otherwise
we’ll see fewer women in the workplace and
more children growing up in poverty.'
www.adviceleeds.org.uk March 2012 42
43. 9.05.12
• Responding to the legislative programme
announced in the Queen’s speech, the Chief
Executive of Child Poverty Action Group,
Alison Garnham, said: From next year, low
income families with a disabled child will face a
massive cut of £1,400 a year to disability
additions when they are moved onto universal
credit. This will mean a total cut of £22,000 by
the time a disabled child is sixteen, which will
do far more harm to health, learning and life
chances than you can remedy by changing
how ‘choice’ works in education.”
www.adviceleeds.org.uk March 2012 43
44. Cut to the legal aid budget by
£350 million
• Debt advice
Legal aid will only fund debt advice when
a person’s home is at ‘immediate risk’
• Employment law advice
All legal aid funding will be cut, except in
cases of discrimination
www.adviceleeds.org.uk March 2012 44
45. • Family law advice
Legal aid will only fund advice on family
problems in cases of domestic violence.
In all other cases, legal aid will not fund
advice on issues like divorce, contact
with children, adoption or family
maintenance
www.adviceleeds.org.uk March 2012 45
46. • Housing law advice
Legal aid will only fund advice on
homelessness or serious disrepair
threatening health
• Immigration law advice
Legal aid will only fund cases where someone
is detained or fleeing torture, persecution or
otherwise seeking asylum.
www.adviceleeds.org.uk March 2012 46
47. • Welfare benefits advice
All legal aid funding will be cut, including
issues like appealing decisions for
sickness benefits
• Other advice
Many other specific issues will no longer be
funded through legal aid. This includes advice
and representation at many types of tribunal
against companies or government agencies
www.adviceleeds.org.uk March 2012 47
48. 2015
• Means-tested pensioner benefits will
be replaced by a new flat rate ‘Citizen’s
Pension’ which is not linked to National
Insurance contributions
www.adviceleeds.org.uk March 2012 48
49. April 2016
State Pension Age
• Equalisation of women’s pension age with
men’s will be sped up from April 2016 so that
women’s pension age reaches 65 in
November 2018Pension age for men and
women will then increase to 66 by Oct
2020Further increases to the State Pension
age are being considered to raise it from 66
to 68
www.adviceleeds.org.uk March 2012 49
50. Advice Leeds Partnership
• Making best use of available/reducing resources
• Developing gateway services
• Develop telephone and web-based services
• Prioritising most vulnerable for most support
• Self-help and signposting information and materials
• Training for front-line staff – reception, support workers, advice
workers
• Social policy
www.adviceleeds.org.uk March 2012 50
51. Possible options for clients
• Check the clients circumstances and that the changes
are being applied correctly
• Try to negotiate a rent reduction with the landlord
• Get ‘money advice’ to budget carefully and cope with the
extra cost of a shortfall in HB
• Move to a cheaper area, or cheaper property
• Apply for discretionary housing benefit
• Apply for a grant from a charity
www.adviceleeds.org.uk March 2012 51
52. Support & Advice - Clients
• Maximise clients income
– Are they getting the right benefits?
– Do they need extra help due to illness, disability or caring responsibilities?
• Turn2us
• Local advice services
• Budgeting, money or debt advice
– Turn2us
– Money Advice Service
– Consumer Credit Counselling Service (CCCS)
– National Debtline
– Local Advice Services
• www.adviceleeds.org.uk
• Overcoming financial difficulty – A guide to services
• Credit Union
• Housing information or advice
• Other support or advocacy
www.adviceleeds.org.uk March 2012 52
53. Support & Advice - Frontline staff
• Resources
– Information, updates
– Leaflets, websites
• Training
– Briefing sessions
– Tool kits
www.adviceleeds.org.uk March 2012 53
Notes de l'éditeur
Uprating Consumer price index (CPI) will replace Rossi and Retail price index (RPI) as the tool used to decide benefits increases in April each year (also known as uprating). The Government’s reasoning for this change is that CPI is a better measure of inflation and a more appropriate measure for benefit claimants as it does not take account of housing costs. This change is expected to result in £6billion savings per year by 2015. Institute for Fiscal Studies (IFS) analysis found that only 23% of claimants will be protected by this change, the rest will be paying for things not covered by CPI so there will be a real loss of income over time. This change saves the Government the most money out of all things announced. CPI was just 3.1% in September 2010 and this is the figure that will be used for uprating benefits in April 2011, at that time RPI was 4.6%.
Some Jobseeker's Allowance claimants may have to do unpaid work, or work-related activity, for up to four weeks in order to continue receiving their benefit.The Personal Advisers at Jobcentre Plus will decide which claimants will benefit from being referred onto this scheme which will be delivered by a range of organisations from the private, voluntary and third sector. Pension credit - maximum Savings Credit award to be frozen for four years this has actually reduced for 2012/2013 from £20.52 to £18.54 for a single person and from £27.09 to £23.73 for a couple Sure start maternity grant will only be available for the first child, unless it is a multiple birth or the new child is the only one in the family under 16.
(MAPPA is a statutory scheme for managing sexual and violent offenders. It is anticipated that the relevant agency or MAPPA co-ordinator will notify a nominated contact at the benefit office that the relevant criteria for exemption applies) (Note the 3 months does not have to be continuous or in the same hostel, and there is no time scale over how long ago the stay in the hostel was) The two new exemptions only apply to persons over the age of 25 The new exemptions do not apply if the claimant is living in shared accommodation
09 March, 2012 The DWP has announced the introduction of 'Simple Payments' for claimants who are unable to use bank accounts. In the latest edition of its Touchbase magazine, the DWP says that cheque payments are being phased out and that Simple Payments will be introduced from summer 2012 for those people who are unable to make use of mainstream bank accounts or the Post Office card account to receive their benefits, pensions and child maintenance. The DWP advises that claimants using the new service will be issued with a Simple Payment card that allows them to receive their cash at PayPoint-enabled outlets. In addition, the DWP says that, if claimants require a regular carer or family member to collect payments for them, an additional card will be issued. Introducing the new service, DWP official Kerry Fern said - 'We know that for some people, using a normal account, such as a bank, building society or Post Office card account, is simply not an option. We are working very hard on the design of the Simple Payment service to make sure it meets the needs of our most vulnerable claimants and that it is accessible to all. No claimants will be moved over to the new method of payment until we are satisfied that they fully understand the change and know how to collect their money.'
National scheme for pensioners likely to remain Primary legislation expected in summer 2012 Straight 10% reduction for Leeds (approx £6m) No additional funding from council ‘ Vulnerable ’ claimants will be protected against reductions (i.e people not required to undertake work-related activity) Universal Credit earnings disregard will be adjusted to prevent people moving into work facing loss of benefits of greater that 65% when local schemes are taken into account. Government response issued on 16th December 2011 confirming that local schemes will be introduced from April 2013. Responses confirmed a number of key aspects: Funding will be reduced by 10% with Government grant distributed directly to Councils and major precepting authorities on the basis of their share of council tax collection; Pensioners will be protected and Government will prescribe a national scheme for pensioners; Councils need to adopt local schemes by Jan 31st 2013; primary legislation will not be available until spring and secondary legislation will follow in early autumn; Formal public consultation on local scheme will be required DCLG has set up a Delivery Group to look at issues relating to toolkits for modelling schemes, financial issues, data sharing and systems issues and model timetables for implementation. None of these tools will be available before March 2012. Local scheme powers are contained in a new Local Government Finance Bill that also deals with localisation of Business Rates as well as reforms to Council Tax which would allow councils to amend discounts and exemptions on empty properties.
What we know From April 2013, elements of the Social Fund will be administered by local councils Social Fund elements that will stay with Jobcentre plus are: Budgeting loans Crisis loans relating to alignment loans Social Fund elements that will transfer to local councils are: Community care Grants Crisis Loans relating to general living expenses and ‘ disasters ’ Assumptions Funding will not be ring-fenced and there will be no requirement to run a social fund; scheme although councils are likely to be asked to explain what they use the funding for Funding will be less than current spend on Crisis Loans; Councils can administer crisis loans as grants rather than loans (too expensive to run a loans system); Councils can provide goods rather than cash Councils can devolve schemes to voluntary sector to run
Assessment will cover 11 areas: Planning and buying food and drink Medium scoring Preparing and cooking food Medium scoring Taking nutrition Medium scoring Managing medication Low scoring Managing prescribed therapies Low scoring Washing, bathing and grooming Medium scoring Managing toilet needs /incontinence Medium scoring Dressing and undressing Medium scoring Communicating with others High scoring Planning and following a journey High scoring Getting around High scoring
Had overview of changes Massive impact for clients and those services supporting them Advice Leeds is preparing for this Period of reduced funding and resources F2F debt advice services changing need to help more people therefore need to prioritise local face to face casework to those who need it most and where people are able to do things themselves are given information and support e.g. such as through CCCS, National Debtline Legal Aid reforms also removing Social Welfare Law – Debt, Welfare Rights and most Housing from scope. This will remove Legal Aid funding in these areas from April 13, but will begin to see impact by the end of the year. In Leeds currently funds 600 debt, 600 Welfare Rights and 1200 housing cases. Developing gateway – aim is for more coordinated advice services so clients can get appointments at appropriate advice services Have received additional funding from Council Working together to coordinate training, effective use of resources Social policy – collating feedback and information on the implementation and impact of the changes. Can feed into this, evidence form are on the Advice Leeds website.
Can use Turn2us benefits checker for this This will depend on who the landlord is and what the change is they are affected by E.g. Under-occupation rule in the social rented sector reduction is a % of the rent Money advice more detail next slide Move house – talk to landlords, housing options Guidance will be developed on DHP, may need to refer for advice Again Turn2us, Advonet to find advocate, other agencies for support Leeds Mental Health Directory online, produced by Leeds Mind , Age Concern
Check if clients are getting right benefits Online tool – Turn2us client can do themselves or you can work thro with them Or refer for advice Money advice There are a number of national websites and help-lines available Turn2us is particularly good source of information – has tools for checking benefits, money management and budget planning and to find grants for those in need. CCCS and Nat Debtline provide specialist debt advice For those who are able to take steps themselves or with some support these are great. For those who need more help, have very complex situations or need emergency help should be referred to a local agency for advice. The Advice Leeds websites has links to both national and local advice agencies Handout info on these and Financial Inclusion leaflet Housing and other support Housing Options Social Landlords – need to agree poliies and procedures National – Shelter, AdviceGuide Local – CAB, Law Centre Other support Information for Mental Health a comprehensive directory of mental health services in Leeds and beyond, covering the voluntary, community and statutory sectors. LeedsDirectory produced by Keeping House offers information on services across Leeds that can promote independence and help to support people and their carers in their daily lives. infostore The infostore is a website of information for older people in Leeds. Specific issue groups
How we can help you We are developing joint resources with the Council Timetable of changes Info and tools where clients can get help Cascading information Training /briefings We have briefing sessions – Overview of welfare reform, housing benefit changes and debt first aid, This includes step by step guide for people to use with clients Will be developing further sessions – Localised Council Tax, local Social Fund scheme, Universal Credit as detail is know to keep people up to date.