WELFARE REFORM THE OTHER BITS GARY VAUX

Transcription

1 WELFARE REFORM THE OTHER BITS GARY VAUX NOVEMBER 1 ST. 2012

2 The key issues.2012/16 Migration from Incapacity Benefit to ESA Changes to LHA and bedroom tax Time-limiting of Contributory ESA April 2012 Reductions in tax credit entitlement - April 2012 Sanctions and penalties October 2012 Introduction of PIP to replace DLA April Total Benefit Income cap - April 2013 Localisation of council tax support - April 2013 Ending of Community Care Grants and Crisis Loans - April 2013 Universal Credit entitlement, conditionality, calendar monthly payment, new rules, administration - Oct 2013 Need for financial, benefit and budgeting advice as a result of all the above and more..now!

3 Pensioners Raising of pension age impacts on pension credit, winter fuel payments etc Protected to some extent no changes to attendance allowance, council tax support; exempt from under-occupation penalty Mixed-age couples are NOT protected unless in benefit system by April/October 2013 Some pensioners may decide to go on working out of necessity or choice

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5 Income support for lone parents From 21 May 2012 new claims for IS by lone parents can only be made if they have a child under 5 (some exceptions e.g. disabled child). Existing lone parent claimants with a youngest child aged 6 began to lose their entitlement. From 20 August applied to existing lone parent claimants with a youngest child aged ,000 affected by this change.

6 Council Tax Benefit/Support April CTB to be localised and replaced by fixed grant 10% cut compared to present expenditure but pensioners (and others?) protected. Increased take-up/more protection means less money available per claimant. Plans have to be in place by Jan 31st 2013 Maximum rebates set at 70-80% in many authorities. Other changes e.g non-dep deductions/capital limits/withdrawal taper/certain discounts etc Severely undermines and complicates the better-off in work calculations

7 INCAPACITY BENEFIT NO NEW CLAIMS SINCE OCTOBER 2008 ALL EXISTING IB CLAIMANTS TO SWITCH TO ESA FROM APRIL 2011 ONWARDS (COMPLETED BY MARCH 2014) except those approaching pension age. WITH EXISTING I.S. CLAIMANTS AROUND 1.5m PEOPLE TO BE MIGRATED SO FAR, 37% ARE FOUND FIT FOR WORK, 29% GO INTO ESA SUPPORT GROUP AND 34% GO INTO ESA WORK-RELATED ACTIVITY GROUP

8 EMPLOYMENT AND SUPPORT ALLOWANCE Income-related ESA affected by partners earnings/capital Work Programme if in WRAG C-ESA limited to 12 months from April 30 th 2012 (unless in support group) then means-tested Some lose all benefit; some switch to income-related ESA (and then Universal Credit)

9 Tax credits April 2012 Reduced help with child care (April 2011) Reduction in income cut-off point for CTC (down to 26k in some cases) New rules for couples (must work 24 hours per week, not 16 hours) New rules if income falls (first 2500 of fall wont count) Universal Credit will be less generous to most new claimants with a disabled child.

10 FIXED PENALTY NOTICES From 1 October 2012, DWP or local authorities can impose a 50 penalty in the event of a claimant - making an incorrect statement or representation or negligently giving incorrect information or failing to provide information or evidence about a claim for a benefit or failing to notify the appropriate authority of a change of circumstances The civil penalty will be added to the overpayment amount, and will be recoverable by the same means as the overpayment

11 New sanctions October 22nd, 2012:- new sanctions for people who leave work voluntarily without a good reason (a fixed13 weeks disentitlement apart from hardship payment - 26 weeks for a second offence and 156 weeks for a third). fail to make themselves available for work or fail to undertake work preparation action (disentitlement to benefit until the claimant remedies the offence PLUS a further 4 weeks sanction for the first offence and 13 weeks for every repeat).

12 DLA and PIP DLA CHANGES TO PERSONAL INDEPENDENCE PAYMENT BASED MORE CLOSELY ON MEDICAL ASSESSMENT BUT STILL MOBILITY AND DAILY LIVING ELEMENTS POINT-SCORING SYSTEM NON-CONTRIBUTORY AND NO MEANS-TEST

13 PIP Primarily phone-based claiming and a twopart process before reaching the medical assessment ( making a claim and how your disability affects you ) limited role for advisers. Harder to get claim form unless with claimant Both components will have: Standard rate limited ability (8 points) Enhanced rate severely limited ability (12 points) Payment rates still to be decided

14 DLA/PIP DWP ESTIMATE IS 500,000 FEWER CLAIMANTS (2.2m reducing to 1.7m) ONLY TWO RATES FOR DAILY LIVING, NOT THREE AS WITH DLA CARE ALL CLAIMS TO BE REASSESSED EXCEPT THOSE AGED UNDER 16 OR OVER 65 TRANSFER NOT AUTOMATIC CLAIM HAS TO BE MADE EITHER RATE OF PIP FOR DAILY LIVING WILL ENABLE CARER TO GET CARERS ALLOWANCE IMPACT OF LOSS OF DLA/PIP ON OTHER BENEFITS AND RULES EG BENEFIT CAP OR PREMIUMS

15 SOCIAL FUND April 2013 Abolition of community care grants and crisis loans (but alignment payments to remain with DWP) Money going to top-tier local councils (i.e. Social Services) instead but not ring-fenced 'Based on a sample of 12 authorities, the average reduction in funding for the social fund replacement schemes between 2011/2012 and 2013/2014 will be 13.9% (CPAG August 2012) Each council to make own priorities and

16 The Social Fund now and in the future Current social fund provision Provision after April 2013 The regulated social fund: funeral payments, cold weather payments, winter fuel payments and Sure Start maternity grants Budgeting loans Remain the responsibility of DWP. Replaced by a system of budgeting advances within IS/universal credit from April 2013 Crisis loans for alignment purposes, benefit disallowance or sanction Replaced by a system of short term advances within IS/universal credit from April 2013, or by DWP hardship payments All other crisis loan expenditure Funding devolved to local authorities Community care grants Funding devolved to local authorities

17 Universal Credit abolishes Income related Jobseeker s Allowance Income related Employment and Support Allowance Income Support Child Tax Credit Working Tax Credit Housing Benefit Social Fund (budgeting loan elements) But the following benefits will still be available Disability Living Allowance (replaced by PIP in 2013) Contributory Benefits Child Benefit Pension Credit (to include a Housing Credit to replace HB and an additional amount for children to replace CTC) Carers Allowance Council Tax Support

18 When will DWP deliver UC? Feb 11 Design & build Apr 13 Oct 13 Apr 14 Oct 14 Oct 15 Oct 16 Oct 17 Test New claims from out of work customers New claims from in work customers Natural migrations as a result of changes of circumstances Managed migrations 2.5m 4.5m Legacy load JSA, ESA, IS, HB, WTC, CTC 6m 8m UC load

19 UNIVERSAL CREDIT Oct 2013 for new claims; for existing claims. Brings together all major means-tested benefits for working age people except council tax rebates. Basic allowance plus amounts for children, disability, housing and caring. No losers at point of change but frozen benefits and reassessed when circumstances change. Comparative losers making new claims e.g. parents of disabled children Digital by default make and maintain claims online including ed notifications etc Extended conditionality e.g. p/t workers; substance misusers; parents of 1-4 year olds

20 UNIVERSAL CREDIT Conditionality The Welfare Reform Act 2012 prescribes the 4 conditionality groups: No work-related requirements Work-focused interview Work preparation All work-related requirements

21 BBA s, POCA, jam jars and CU s Basic bank accounts how available? Post Office card accounts how useful? Jam-jar accounts money placed into dedicated sub-accounts Credit unions offering current accounts with saving/membership option ublication/finance/universal_credit_and_fin ancial.aspx

22 DEMAND FOR LOANS Loss of income from e.g. changes to ESA; DLA; HB (e.g. Capping and bedroom tax ); CTB changes Switch to calendar monthly payments Absence of direct payments for rent Reliability of UC administration especially link to tax information when working. Abolition of CCG s and crisis loans

23 HOW INTERESTING? WONGA 4214% APR PROVIDENT 272.2% APR PAYDAYUK 1737% APR LOGBOOK LOANS 478.3% APR KRAYDAY LOANS 2512% APR CREDIT UNIONS 12.7% APR

24 HOW INTERESTING? Total amount borrowed Duration - 78 weeks Total amount repaid Fixed annual interest rate % Repayments a week

25 HOW INTERESTING? From a credit union Amount borrowed Duration - 52 weeks Total amount payable Fixed annual interest rate 12.7% Repayments a week

26 Thank you Questions and comments. A video explaining welfare reform featuring rabbits, owls and hedgehogs: