Issue 12 : May Welfare Reform. Special issue: PIP, HB, Universal Credit, localism explained

Transcription

1 Issue 12 : May 2012 Welfare Reform Special issue: PIP, HB, Universal Credit, localism explained

2 Issue 12 : May 2012 Introduction to welfare reform pages 1 2 An overview of the main changes taking place over the next four years. PIP implementation pages 3 4 Where and when the replacement for Disability Living Allowance is to be introduced, and how existing claimants will be affected. Universal Credit pages 5 6 An introduction to the main features of the new system that will replace most of the current means-tested benefits. HB restrictions page 7 Housing Benefit restrictions for underoccupation will have a major impact on families and social landlords in Durham. This article explains the new rules. IS for young people in education page 8 Changes to Income Support in April 2012 should make claiming a smoother process for some young people. Here we explain how. Localism and welfare reform pages 9 10 The Welfare Reform Act places two major new responsibilities on local authorities to deliver aspects of the social security system. Here we examine some of the problems LAs will face in implementing the systems. Welfare reform briefings page 11 Details of our welfare reform briefings for Durham County Council staff and how to book a place. Contacts and advice back page How to get in touch with, and refer cases and provide feedback, to the Welfare Rights Service. welfare writes is written by Durham County Council's Welfare Rights Service see back page for contact details

3 Issue 12 : May 2012 page 1 Introduction to welfare reform Chris Graham takes an overview of the biggest package of reform to the social security system since Beveridge, and highlights some of the immediate impacts that the cuts are likely to have in areas such as County Durham sees one of the biggest shakeups of the UK social security system since Beveridge built the foundations of the modern welfare state after the Second World War. The Government states that its aims with welfare reform are to: contain growing Housing Benefit expenditure encourage greater mobility within the social rented sector localise the council tax and Social Fund schemes improve work incentives In many (though not all) cases, the reforms will lead to cuts in benefits generally and reduced entitlements for individuals; the losses suffered by some claimants are likely to be very significant. For example, the DWP estimates that 500,000 existing DLA claimants will lose all entitlement when they are reassessed under the new Personal Independence Payment (PIP) rules; it is likely that hundreds of thousands more DLA claimants will continue to get benefit but at a significantly reduced rate. There are several major vehicles for welfare reform : the introduction of Universal Credit and the abolition of the benefits it replaces the introduction of the Personal Independence Payment and the abolition of DLA major reforms to Housing Benefit, Council Tax Benefit and The Social Fund further refinements to ESA, particularly the Work Capability Assessment Some of the changes to existing benefits are already ongoing: for example, cuts to Tax Credits (mainly Working Tax Credit) and Local Housing Allowance have already been made, and more are proposed. The most significant changes from April 2012 onwards are timetabled on the next page. Cuts to ESA Some of the immediate impacts can already be felt. From 1 May 2012, contributory employment and support allowance (cbesa) will stop after 12 months for claimants who are not in the support group. Nationally, 175,000 people will be affected straightaway, with 85,000 of those able to switch to income-related ESA (iresa). In Durham County Council Welfare Rights Service we have already taken calls from people losing their ESA altogether, usually

4 Issue 12 : May 2012 page 2 New benefit Benefit(s) abolished Timescale cbesa changes N/A May 2012 Housing Benefit changes N/A April 2013 Localised Council Tax Council Tax Benefit April 2013 Benefit Localised Social Fund The Social Fund April 2013 (discretionary) Personal Independence DLA for working age April Payment (PIP) claimants Universal Credit (UC) Income Support Income-based JSA Income-related ESA Child and Working Tax Credits Housing Benefit October because of a partner s income. As well as being refused iresa because of the income of a partner, people whose cbesa stops after 12 months because of the new rule may also be refused iresa on the basis that they have too much in savings. Benefit cap Nationally there are 70,000 households affected by the benefit cap in April 2013 who will be getting a letter from Jobcentre Plus telling them about what lies in store, and offering them support and advice about finding work or moving to cheaper accommodation, in order to avoid the cap. There are about 400 households in County Durham expected to be affected; however, we have heard from other local authorities where the lists supplied by the Department for Work and Pensions erroneously included households which have a child in receipt of Disability Living Allowance(DLA). These households should not be subject to the cap as DLA is being paid. It is important that a check is done on the type of benefits being paid into a household. The capping figure will be set at around 500 per week for families and 350 for single people however there are some exceptions such as people getting DLA or Attendance Allowance. It is clear that a lot is happening on Welfare Reform and that its impact on the people of County Durham will be significant. If you would like to keep pace with the changes, I invite you to attend our Welfare Reform briefings for Adults, Wellbeing and Health staff in the Summer (see details on page 11). Please note we hope to be involved in further briefings to other organisations and services later on in the year.

5 Issue 12 : May 2012 page 3 PIP implementation: Durham first in line In the last issue of Welfare Writes we explored how the new PIP assessment is going to work and who is likely to lose out as a result. In this issue Phillip Allen looks at how and when the new system is going to be implemented, and what the timetable will mean for claimants already receiving DLA. PIP ( Personal Independence Payment ) will be introduced in April It will affect people of working age this means everyone who is aged between 16 and 64 when they claim or, if they are an existing DLA claimant, everyone aged between 16 and 64 on 8 April 2013, regardless of the age they are when reassessment takes place. This reassessment activity excludes those aged 15 or under. This means that DLA will continue to exist for claimants under 16, including new claimants. Therefore three benefits will exist from next year whose purpose is the same DLA for under 16s, PIP for those aged 16-64, and AA for those 65 or over (or DLA for those over 65 who are already on DLA and are aged 65+). The Government has committed to consult again before considering introducing PIP for people aged under 16, as the current PIP assessment rules are focussed on the needs of adults, not children. Transition from DLA for a child to PIP for an adult will be handled by writing to the parent or guardian a few months before the child s 16th birthday. This letter will include an intent to claim form. This should be completed and returned, and if this is done an invitation to claim should be issued on the claimant s 16th birthday. DLA will remain in payment until the PIP claim is decided. Timescale It is estimated that around 2 million people will be asked if they want to be reassessed (if they do not, their entitlement to DLA will end anyway). The DWP estimated in the notes to the second draft assessment criteria that around 500,000 existing claimants will lose all entitlement, which would mean about a quarter of those reassessed. Many more will see their award reduced, and a very much smaller number will see an increase in their award. Phase 1: Pathfinder stage 1 The initial pathfinder stage of PIP takes place for two months starting on 8 April During this phase a few thousand claims per month will be taken from a distinct geographical area and processed by a particular benefits centre. Those claimants living outside this area will still claim DLA in the normal way and will be reassessed at a later date. The benefits centre for the initial pathfinder

6 Issue 12 : May 2012 page 4 is Bootle Benefits Centre. It takes claims from various parts of the north and northeast, including Durham (DL and DH), among others. Phase 2: all new claims Phase 2 is scheduled to start in June From this date all new claims from anywhere in the country will be for PIP; it will be impossible to claim DLA after this date. At this stage no reassessments will be taking place, and no claims for PIP from existing DLA claimants will be permitted. Phase 3: full natural reassessment, pathfinder for managed reassessment Phase 3 is scheduled to start in October This begins the process of reassessment, which takes two forms: natural reassessment and managed reassessment. Natural reassessment is where an existing DLA claimant enters the reassessment process after reporting a change in their care or mobility needs (supersession) or when an existing award comes to an end (renewal). It is therefore important that anyone with an existing DLA award who needs a supersession requests this before October, otherwise they will be subjecting themselves to the new assessment. Managed reassessment is where the DWP initiates the reassessment process. From October this forced migration will be restricted to another pathfinder exercise. This will take approximately 30,000 existing indefinite DLA awards between October and December 2013 and force a reassessment of those awards. The selection process is essentially random, but will exclude some claim types, for example those from terminally ill claimants and those in receipt of IB who have already been scheduled for reassessment for ESA. Phase 4: full managed reassessment From January 2014 every remaining working age DLA claimant will be contacted to ask if they want to claim PIP and if they do, will be engaged in the claim process. As long as they engage in that process, DLA will continue to be paid until the assessment is complete. They will have 4 weeks to claim, and if they do not, DLA will be suspended and they will be notified and reminded to claim again. If they claim within another 4 weeks DLA will be reinstated until the PIP assessment is complete. If they do not claim, DLA will be terminated. There will be limited appeal rights against this decision. The DWP estimates that every DLA claimant will have been invited to claim PIP by March However, the full managed reassessment process will not be completed until later in 2016, because the process itself takes time and there will be a number of outstanding appeals to settle before everyone is brought in and final decisions are made. In our experience, it is likely that there will be a very substantial number of appeals against refusals of benefit and reduced awards, loss of income forcing many to obtain advice, evidence and representation from advice organisations or other professionals.

7 Issue 12 : May 2012 page 5 Universal Credit Universal Credit is the cornerstone of the Government s Welfare Reform Act and will bring around the biggest changes of all the elements in the current reform programme. Phil Hanns introduces the new scheme that will replace the current system of means-tested benefits and highlights some of its major features. In October 2013 Universal Credit (UC) will replace six means-tested benefits: income-based Jobseeker s Allowance, income-related Employment and Support Allowance, Income Support, Housing Benefit, Child Tax Credit and Working Tax Credit. In its White Paper on UC in November 2010 the Government stated its policy intention to create an integrated, simpler benefit which would improve work incentives and make it easier to move into and out of work. New earnings rules would make work pay by letting people keep 35p in every pound of earnings. There was a commitment that no-one would be worse off when they were moved onto the new system. Described at its most basic, UC is a benefit for people who are of working age who are in work or out of work (due to lack of a job or capacity to work) and whose resources (income) falls below prescribed levels (needs). These prescribed levels of need include amounts for a single person or a couple plus additional amounts for children. Extra amounts may also be added to the basic allowance depending on someone s circumstances, for example illness or disability, or caring for a disabled person. The existing Housing Benefit scheme will be subsumed into UC, as will help with mortgage costs. It s likely that a percentage of childcare costs (if working) will also be included. This will be a maximum amount that can be offset against the costs of childcare. There will also be an overall capital limit of 16,000. Most people claiming UC will be subject to some level of conditionality a commitment related to getting into and remaining at work. Tougher sanctions will be applied to those who don t meet those new rules. The new benefit will be administered by the DWP. HMRC, who currently administer Tax Credits, will provide real-time PAYE information so that changes to earnings can take effect as soon as possible. Local authorities, who currently deliver Housing Benefit, will continue to assess local rent levels upon which housing support will be paid, but the role is expected to be much smaller than before. The Government has suggested that local authorities will have a part to play in providing face-to face-support for vulnerable people who struggle to make claims for UC.

8 Issue 12 : May 2012 page 6 Claims for UC are expected to be made online, with changes being managed online, though there is also expected to be some method of telephone contact and claiming. Timescales for move to UC The first claims for Universal Credit will be made nationally from October 2013 with a rolling programme of migration thereafter. October 2013: New out of work claims treated as for UC. New IS claims treated as for UC. New HB claims treated as for UC. Movers into work transfer onto UC April 2014: No new claims for tax credits & changes in circumstances April 2014 to October 2017: Transfer of all other claimants onto UC At this stage (May 2012), although the framework for UC is apparent, there is still a lot which is either not known or unclear. Whilst the new system will in many ways be simpler one benefit with one claiming route which continues as someone enters work and then tapers off this comes with its own set of problems. People s lives aren t simple and that requires added complexity to be built into UC, which adds further risk. The IT system underpinning payment is new and if its does not function effectively from the start then families are likely to experience real hardship. The Government has said that existing payments in means tested benefit for disabled people are difficult to deliver and can be confusing. However the attempt to simplify them has meant that they are likely to be less generous. There will no equivalent to disability, enhanced or severe disability premiums, nor a disability element as within Tax Credits. Instead there will be a lower additional amount at and a higher rate at (current rates) based on the work-related activity group and support group determinations for ESA. These amounts won t be paid in addition to the amount for carers and it s unclear whether more than one extra amount would be paid if there were two disabled people in a couple. There has been a suggestion from the Government that the higher rate will be increased to around 77 as resources become available. However at these levels disabled people would be significantly worse off than before. Similar concerns have been raised by charities such as the Child Poverty Action Group about the level of extra amounts for disabled children. The details of passported benefits things like free school meals, help with prescription and dental costs have not yet been confirmed. In the current system, anyone who is working would not receive passported benefits like these, but because UC is payable to those in work as well as those out of work, a sophisticated way to make sure this support is available needs to be considered. It is thought that an extra amount could be added to compensate if these concessions are removed. As more the fine detail of Universal Credit becomes known we ll endeavour to make sure that we keep you updated.

9 Issue 12 : May 2012 page 7 HB restrictions for social landlords From April 2013 Housing Benefit will be restricted for some people who are living in the social rented sector. This includes local authority tenants, tenants of registered providers of social housing and registered social landlords. Gillian Osgerby explains how the new rules will affect tenants and the social housing sector. From April 2013 size criteria will be introduced for all new and existing working age tenants of social landlords, which will replicate the criteria currently used for Local Housing Allowance and affect the incomes of thousands in County Durham. These restrictions will not apply to people who have reached the qualifying age for state pension. Under the new rules, one bedroom will be allowed for: every adult couple (married or not); any other adult aged 16 or over; any two children of the same sex; any two children regardless of sex under age of 10; any other child. If you have more than the number of rooms allowed by the criteria, your housing benefit will be reduced and you will have to make up the difference from your other income, even if you receive the bare minimum permitted by law. The DWP will determine the size of the home a family require using these criteria, and then compare this to the number of bedrooms they actually have. When determining the number of bedrooms a family needs, they will exclude children who move between separated parents. However, a bedroom for a non-resident carer will be taken into account in determining the relevant size criteria where that carer provides necessary overnight care for the claimant or their partner. This system imposes a rigid formula on which people should share rooms and a family s specific circumstances are not taken into account. For example, if a child is unable to share a bedroom due to a disability or without disrupting a sibling, or a family needs additional space to store vital medical equipment, these needs cannot be taken into account. The maximum rent, for Housing Benefit purposes, will be reduced by 14% for anyone who has one spare bedroom, if the family has more than one spare bedroom then their maximum rent will be reduced by 25%. There is no way around this reduction, so moving to cheaper accommodation won t help if the property is still too large for the family s needs. This reduction may mean that anyone receiving a small amount of Housing Benefit may no longer qualify.

10 Issue 12 : May 2012 page 8 Income Support changes for young people In the midst of the plethora of welfare reform measures which see the social security budget cut dramatically, one change that should benefit some young people crept in quietly on April 1st. Natalie Rigby explains what the change means for claimants and how it might lead to savings for the local authority. On April 1st, the Government introduced an amendment to the then-current rules which allow a young person to claim Income Support based upon education and estrangement. In the pre-april rules there were a number of discrepancies within the scheme, so these changes should simplify matters. Prior to April, someone who was between the ages of 18 and 20 (or 21 in some instances) could claim Income Support on the grounds of being in relevant nonadvanced education (i.e. not above A-Level standard) which lasted over 12 hours per week, if they were estranged from their family or someone acting in place of their family. However, to be able to qualify up to the maximum age they would need to be enrolled on the course of study before their 19th birthday. From 1st April these rules changed. What happens since that date is that a claim can be made under the same general criteria, but instead of the claim having to be made before the age of 19, it can instead be claimed at any point up to the 21st birthday. Perhaps more importantly, the student can then remain on that course of study until the end of the academic year rather than their Income Support ending as soon as the terminal age, in this case the age of 21, is attained. A further amendment allows a smooth transition from GCSE to A Levels too, without the need to stop the Income Support claim which would previously have occurred. This change should make the process of claiming Income Support on the grounds of estrangement a less problematic experience for many young people in fulltime education. It should also bring into entitlement some young people who could not previously claim because they did not enrol on the course until after their 19th birthday. We in the Welfare Rights Service are currently working with colleagues in the Children and Young People s Service to identify situations where the County Council is paying for living expenses and rent payments for young people, in the hope of identifying savings to the authority as well as gains for the young person.

11 Issue 12 : May 2012 page 9 Localism and the social security system The Localism agenda is a key part of the Government s Welfare Reform programme and involves transferring responsibility for delivering the benefit system to local authorities. Chris Graham looks at what this is likely to mean for Durham County Council. As part of the localism agenda, from April 2013 Durham County Council will be given responsibility for delivering two key parts of the social security system. From this date, all local authorities are going to have to develop their own: Council Tax Benefit scheme. System for delivering Community Care Grants and Crisis Loans for living expenses Council Tax Benefit scheme The current system for delivering help for those that need help to pay their Council Tax is through the social security system, where the rates of benefit are set down by Parliament each year. As with Housing Benefit, local authorities administer the scheme on the behalf of central Government. Under the new proposals set out by Government, local authorities will have to devise their own scheme instead. The Government is proposing applying a 10% cut to the scheme s funding before handing the monies to local authorities. This means in County Durham that a 6 million cut could potentially be applied to those that receive Council Tax Benefit. In addition, the Government has told local authorities that they have to protect pensioners who represent 50% of the current caseload in the County and the vulnerable. The County Council has a statutory duty to work to alleviate child poverty, so families with children are one group that the local authorities could seek to protect. In this context it s not difficult to imagine a scenario where a greater percentage cut in benefits is applied to those of working age without children. It also offers the potential scenario where local authorities could be trying to collect relatively small amounts of Council Tax from people who do not have the means to pay. The design and implementation of a Council Tax scheme presents a challenge to local authorities, particularly as the Communities and Local Government Committee report described the proposals for local authorities developing their own scheme within the constraints imposed by central Government outlined above as the illusion of delegation

12 Issue 12 : May 2012 page 10 with a minimum of real discretion. It remains a challenge to design a scheme which works fairly whilst operating within those constraints. The Social Fund The Government also proposes transferring to local authorities the monies it currently distributes under the Social Fund (SF). The Social Fund is the system that encompasses one-off and emergency payments within the social security system, these taking the from of Community Care Grants, Budgeting Loans and Crisis Loans. The SF is a system that replaced the earlier provision of grants for one-off expenses that normal weekly rates of benefit were never designed to cover. For example, until 1988 it was possible to obtain grants for items like beds, cookers and carpets, and payments for other needs like those arising from an emergency. The SF replaced this with a system that is discretionary, and where the majority of payments are made in the form of loans, not grants. The Government regard the current Social Fund as not concentrating on those most in need, in part because it is difficult in a centrally administered system for all staff to exercise a high degree of discretion. For example, in the case of crisis loans where it is necessary to determine if there is a severe risk to applicants health or safety (SSWP (2010) Universal credit, p47) A significant issue for local authorities is exactly how they will deliver a scheme that replaces the functions of the Social Fund. There is actually no statutory duty for local authorities to deliver such a scheme at all, and at the time of writing there is no indication how much local authorities will actually receive in funding for them. The proposals in the Government s document give examples of best practice where, in order to relieve severe hardship, local authorities act as the assessor of need, and seem to point towards providing help in kind rather than in cash. Accordingly, there is reference to recycling schemes, food banks and furniture banks, rather than cash payments as we see in the current Social Fund. According to Dr Chris Grover in his article Abolishing the Discretionary Social Fund: Continuity and change in relieving special expenses, we may see in a marked shift in the delivery of welfare to a system that more closely resembles models that were once abandoned in the post-war era: The provision of goods and food was a familiar part of poor relief in Britain under the Poor Law, a mode of relief that was abandoned in the post WWII period when Britain moved away from it at least in part and with varying degrees of success because of its residual and stigmatising nature. Clearly, with the pace of change comes a great deal of work for local authorities to carry out in preparation for the new responsibilities being transferred in 2013 to deliver relief to the most vulnerable in the County.

13 Issue 12 : May 2012 page 11 Welfare Reform Briefings: Summer 2012 Welfare Reform is a vast subject with many significant consequences for people and organisations in County Durham. Durham County Council Welfare Rights Service has organised a series of briefings to act as an introduction to the subject. Below are the details of the events and how to book a place. Who are the briefings for? All Durham County Council Adults, Wellbeing & Health front line staff including integrated teams. How long will they last? Each briefing will last approximately 1 hour. Aims There are significant changes in the social security and Tax Credit system planned by Government that are to be implemented over the next two parliaments. To give an understanding of the Welfare Reform programme. Objectives These briefings will: Give details on the Welfare Reform changes including the new Universal Credit and changes to the Disability Living Allowance Examine the timetable for reform Look at the impact on the County Council, communities and individuals Explore the possible impact on frontline staff Course Leader Chris Graham Welfare Rights Team Manager Dates and Venues 25th June 2012 Glebe Centre, Murton 27th June 2012 Council Chamber, Spennymoor 29th June 2012 Council Chamber, Chester Le Street 3rd July 2012 Stanley Education Centre, Stanley 4th July 2012 The Hub, Barnard Castle 10th July 2012 County Hall, Durham (All timings are 10.00am 11.00am) To Book If you would like to book a place on the briefings, please contact Paula Walshaw Tel: / Course Type: Welfare Rights Benefits Course ID: Further Information Contact: Gary Grainger / Paula Walshaw Adults, Wellbeing and Health, Learning & Development, County Hall, Durham Tel: / VPN: /

14 Issue 12 : May 2012 Consultancy and Referral line :30 pm - 3:30 pm Please note: Advisers, staff, and other professionals must use the consultancy and referral line for benefit queries and referrals to the service. The public advice line number given below is for members of the public only. Public advice line :00 am - 12:00 noon Further info, contributions, requests & feedback: welfare.rights@durham.gov.uk Please us if you need further information on any of the articles in this issue, or want to suggest or contribute future articles Welfare Rights Service Crook Civic Centre North Terrace Crook County Durham DL15 9ES welfare.rights@durham.gov.uk