Richard Vianello, District Manager Jobcentre Plus Surrey and Sussex District Medwyn House Mountfield Road Lewes East Sussex BN7 2XR

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1 Richard Vianello, District Manager Jobcentre Plus Surrey and Sussex District Medwyn House Mountfield Road Lewes East Sussex BN7 2XR Our phone number surreyandsussex.dmsupportteam@jobcentreplus. gsi.gov.uk Dear Stakeholder Date: 10 May 2012 Welfare Reform Act 2012: benefit cap I am writing to provide you with information about the introduction of the benefit cap and to advise you of the steps DWP is taking to support claimants affected. What is it? From April 2013, the Government will introduce a cap on the total amount of benefits that working-age people can receive, so that households on out-ofwork benefits should no longer receive more in welfare payments than the average weekly wage for working households. Based on current forecasts on wage levels in 2013, the cap will be set at around 500 per week for a couple and single parent households, equivalent to a 35,000 gross salary for someone in work and at around 350 per week for single adult households without children. In the short-term, the cap will be administered jointly by Department for Work and Pensions (DWP) and Local Authorities (LAs) and will be deducted from Housing Benefit payments. In the long-term it will form part of the new Universal Credit system.

2 Why is a cap being introduced? The Government believes that there should be a limit on the overall level of benefit it is appropriate for the state to provide to those who are not working. They want to restore fairness to the claimant through making work pay and provide fairness to the taxpayer by ensuring money is not wasted on trapping people on benefits. Households entitled to Working Tax Credit will be exempt from the cap to help ensure that someone in work will be better off than if they were on benefits. How will the benefit cap be implemented? The benefit cap will take effect from April From May 2012, DWP will identify and make contact with claimants potentially affected through the issue of a direct mail letter. This will give claimants almost 12 months notice of the changes; providing them with a Helpline telephone number and the offer of an appointment to talk through with a DWP adviser the help and support available to them. The support on offer to claimants affected. This is a significant change and DWP is working closely with LAs to ensure a smooth transition. We will know who the people are that are likely to be affected by the cap and we have advisers who will inform them of the existing support and provision available through DWP - the Work Programme and Work Choice, to help them find work. On receipt of system generated reports, DWP Districts will be contacting claimants to ensure they have received the notification and to offer support. Where appropriate, claimants will be encouraged to participate in employment support to help them find work. For those claimants whose immediate concern relates to housing and accommodation, they will be sign-posted to the LAs for advice. What should claimants do? Claimants are being made aware that there will be no change to their benefits until April 2013, but they may well require further support which is available via the Helpline available from 9 May 2012 Helpline Number: (text phone ).

3 More information Please contact the Relationship Manager for your area within Surrey and Sussex District if you have any queries on the benefit cap; I have attached their contact details below Area Covered Relationship address Managers Brighton Wayne Edmunds wayne.edmunds@jobcentreplus.gsi.gov.uk Hove, Worthing, Steve Wood steve.wood1@jobcentreplus.gsi.gov.uk Littlehampton, Bognor, Chichester Guildford, Woking, Staines, Camberley, Weybridge Simon Dann simon.dann@jobcentreplus.gsi.gov.uk Redhill, Epsom, Crawley, Horsham Eastbourne, Newhaven, Lewes, Haywards Heath Paul Niner Lee Hawkins paul.niner@jobcentreplus.gsi.gov.uk lee.hawkins@jobcentreplus.gsi.gov.uk Hastings, Bexhill Amanda Brookes amanda.brookes@jobcentreplus.gsi.gov.uk You can find out more information about the Welfare Reform Act 2012 via DWP website. Articles to inform Advisers and Intermediaries are also included in the monthly Touchbase e-zine (available via the DWP website). In addition, I have attached a Q&A brief which you may find useful. Yours sincerely Richard Vianello Surrey and Sussex District Manager

4 Questions and Answers Why is a cap being introduced on the level of out-of-work benefits that households can receive? The Government firmly believes that there has to be a limit on the overall levels of benefit it is appropriate for the state to provide to those who are not working. It is not reasonable or fair that households should receive a greater income from benefits than the average weekly wage for working households. What benefits count towards the cap? The following benefits count towards the cap: Bereavement Allowance Carer s Allowance Child Benefit Child Tax Credit Employment and Support Allowance (ESA) (except where it is paid with the support component) Guardian s Allowance Housing Benefit Incapacity Benefit Income Support Jobseeker s Allowance Maternity Allowance Severe Disablement Allowance Widowed Parent s Allowance Widowed Mother s Allowance Widow s Pension Widow s Pension Age-Related What will happen to households with vulnerable claimants? In recognition of their additional needs all households which include someone who is receiving the following will be exempt: Disability Living Allowance Industrial Injuries Disablement Benefit Personal Independence Payment The support component of ESA Attendance Allowance War Widows or War Widower s pension In addition households with a member who is entitled to Working Tax Credit will also be excluded from the benefit cap. Why is Child Benefit included in the cap? The Government believe that it is right to set a cap at around 500 per week including child benefit for couple and single parent households. This is the

5 equivalent of 35,000 a year gross or 26,000 net. This strikes the right balance between supporting families and providing incentives to work. Families will still receive Child Benefit but there will be a clear upper limit to the total amount of benefits a family can receive. Does this disadvantage large families? The aim of benefit cap is to achieve long-term positive behavioural effects through changed attitudes to welfare. It will mean that households on out-ofwork benefits will have to make the same decisions with regard to the lives they lead as families in work taking responsibility for the decisions they make in the light of what they can afford. Even within the limits of this cap, households will still be able to receive significant amounts of financial assistance from state welfare payments, amounts up to the average national wage without going out to work. Will the introduction of the benefit cap cause people to move or lead to rent arrears and repossessions? There is no evidence that people will be made homeless as a result of the cap but some may have to move to cheaper accommodation if they do not work. People may be able to get temporary help from LAs for their housing costs via the Discretionary Housing Payments Scheme. Will there be any transitional arrangements in place for those households affected by the cap? There will be a grace period whereby the cap will not be applied for 39 weeks to those who have been in work for the previous 12 months and who lose their job through no fault of their own. The Discretionary Housing Payments Scheme will allow LAs, where appropriate, to make additional payments to people entitled to Housing Benefit where they need temporary help with housing costs.