Welfare reform: a progress report Julia Sweeney, DWP South West welfare reform conference 5 th October 2012 1
Reform begins in earnest in 2013 DLA replaced by Personal Independence Payments benefit cap linked to average earnings localised council tax support introducing locally-based welfare assistance (from social fund).and of course beginning the transition to universal credit 2
Personal Independence Payment: background replaces Disability Living Allowance for people of working age (people aged 16-64) from April 2013 reforms are designed to ensure that those claimants who face the greatest barriers to living full, active and independent lives continue to receive the right levels of support phased introduction: beginning with new claims in North West England so we can test and review processes October 2013 - begin assessing everyone who gets Disability Living Allowance for Personal Independence Payment March 2016 - all current Disability Living Allowance claimants of working age will have been contacted about assessment to Personal Independence Payment 3
Benefit Cap introduced from April 2013 and will apply to the combined income from the main outof-work benefits, plus Housing Benefit, Child Benefit and Child Tax Credits the benefit cap levels will be: 500 per week for couples and lone parents 350 per week for single adults about 56,000 households will be affected by the cap in 2013/14 with average benefit reduction of 83 a week per household 4
Social Fund reforms Community Care Grants and Crisis Loans for general living expenses will be abolished in April 2013. New provision and funding through local authorities. 2013/14 Budgeting Loans will continue for existing customers but will be replaced by Budgeting Advances at the point where people move to Universal Credit. Budgeting Advances will be available to Universal Credit claimants from April 2013 (in the pathfinder areas). Budgeting Loans will remain for existing income-related benefit claimants until migration to Universal Credit has been completed localising and reforming Community Care Grants and Crisis Loans for Living Expenses gives local authorities the flexibility to respond to needs according to local circumstances as they are better placed to do so than the current, more remote, centralised system 5
Housing cost changes: a continuing programme Without reform, HB spend would reach 26 bn by 2014-15, reforms save 2bn p.a from April 2011: LHA reform removal of 5 bed rate and 15 excess, LHA caps -max 400 pw size criteria: additional room for a non-resident carer where a disabled person has need for overnight care staged increase in non-dependant deductions LHA rates reduced from median to 30 th percentile of local rents from January 2012: Shared Accommodation Rate raised to those between 25 and 35 from April 2013: Increases in LHA rates linked to CPI Underoccupation penalties for working age social tenants 6
DCLG social housing policy: adding local flexibility freedom for councils to determine who should qualify to go on their housing waiting list, and to develop local solutions which make best use of limited stock making it easier for existing social housing tenants (including underoccupiers) to move by taking those who are not in housing need out of allocation rules flexibility for landlords to offer fixed term as well as lifetime tenancies to new tenants was introduced on 1 April 2012 7
Social Rented Sector Size Criteria Housing Benefit entitlement for working-age tenants in the social rented sector will be restricted to reflect the needs of their household from April 2013 for all current and new claimants reduction in their eligible rent of 14% for under occupation by one bedroom and 25% for under occupation by two or more bedrooms the number of bedrooms Housing Benefit will cover will be based on the LHA size criteria rules (but with no shared accommodation rate): one bedroom for each of the following: a couple a person who is not a child (age 16 and over) two children of the same sex two children who are under 10 any other child 8
Preparing for Social Rented Sector Size Criteria DWP working with local authorities and Housing Associations to develop implementation plans and guidance the Chartered Institute of Housing toolkit designed to aid landlords in the implementation of this measure we have engaged with welfare rights organisations while developing this policy to ensure the needs of different customers are taken into account along with the guidance we have produced products to aid with implementation that will include letters, leaflets and posters designed to draw customer attention to the changes 9
Preparing for Social Rented Sector Size Criteria local authorities are collecting information from social sector landlords about how many bedrooms there are in their properties local authorities will inform those claimants who are potentially under-occupying their property and ask them to confirm the information they hold. local authorities may also write to landlords to notify them of tenants likely to be treated as under-occupying their properties you may then wish to work with these tenants to discuss their options and provide advice and support 10
How are we simplifying the system? Current system Income related JSA) Income related ESA) (including SMI) Income Support ) Working Tax Credits Child Tax Credits Housing Benefit New system Universal Credit Disability Living allowance Pension credit Child Benefit, Carer s Allowance (will remain) Council Tax Support (localised scheme) Personal Independence Payment will include support for housing and children Contributory JSA and ESA (still considering how these will work) 11
How is Universal Credit different? Current System The welfare system has more than 30 benefits each with their own rules and criteria Universal Credit Universal Credit provides a new single system means-tested support for working-age people who are in or out of work Work incentives can be very low, benefits are reduced to take account of earnings but different benefits have different rules Conditionality: some benefit claimants are capable of working but have no obligations to look for work Payments are paid to different adults in a household and for various periods Universal Credit will ensure that work pays. Financial support will be reduced at a consistent and predictable rate and people will generally keep a higher proportion of their earnings Universal Credit will personalise conditions according to people s capability and circumstances Universal Credit is a single monthly payment to each household (Though we will retain the ability to pay more frequently or to split payment in exceptional circumstances) 12
Universal Credit implementation and transition Universal Credit will support people into work and ensure that work pays. To deliver this we need to: convert 12 million claims to 8 million household accounts create a digital platform that both meets the needs of people who are used to managing their lives online, whilst helping claimants who need extra support to get online ensure the right support for vulnerable people create a system capable of flexibility and continuous improvement DWP is leading delivery, drawing on tax credit and housing benefit expertise Options open for approaches to delivery in the longer term. 13
Testing the universal credit delivery model live innovation trialling and model office (from April 2012) Programme initiatives to develop the end to end business proposition for delivering UC and test the (physical) space for delivering UC. direct payment demonstration projects (June 2012) testing the impact of direct to claimant rent payments and means of managing the associated risks to social landlords' financial position Pathfinder (April 2013) Will test live running of the UC offering in a real world setting in Greater Manchester and Cheshire LA led pilots (summer 2012) Will test service integration at local level for improved claimant support and work focus. 14
Direct Payments Demonstration Projects Project purpose is to: test the impact of various trigger points and safeguards on social landlords and tenants evaluate claimant communication strategy and test landlords strategies for maintaining financial viability Participating local authority areas: City of Edinburgh Council and Dunedin Canmore Housing Association Torfaen Borough County Council and Bron Afon Community Housing and Charter Housing. Wakefield Metropolitan Borough Council and Wakefield and District Housing Shropshire Unitary County Council and Bromford Group, Sanctuary Housing, and Wrekin society. Oxford City Council and Oxford Citizens (part of the Greensquare Group) Southwark Council and Family Mosaic 15
Universal Credit LA led pilots The local authorities selected to run the pilots are: England: Bath and North East Somerset Birmingham Lewisham Melton and Rushcliffe partnership North Dorset Oxford West Lindsey Oldham and Wigan will run as part of the Pathfinder preparations Scotland: Dumfries and Galloway North Lanarkshire West Dunbartonshire Wales: Caerphilly Newport 16
Migration moving customers into UC/pension credit APRIL 2013 Pathfinder Phase 1 Go-Live OCT 2013 New claims from unemployed claimants start APRIL 2014 New claims from in-work claimants start Managed migrations start 2017 Managed migration activity completed 17
Working with local authorities: joining it all up collaborative design, inclusive governance, new working groups LAA steering group and LA transition working group contributing to design and transition plans web pages, guidance, best practice and networks close working with DCLG building on existing systems and capability where it makes sense: next phase of data sharing programme consultancy services to support housing costs business delivery during transition 18
Preparing for the changes 19
Helping tenants get online and get used to using the internet understand the changes - how will your tenants be affected provide support for those tenants who may need additional help do your tenants have bank accounts and can they budget well enough to manage their own money? consider putting in place new arrangements for rent collection work with Jobcentre Plus, your local authority and key voluntary organisations to agree upon how tenants will be routed to the support that they need 20
What should you be doing now? work together - include Jobcentre Plus, local authorities, registered providers, private landlords and third sector partners to prepare for the reforms identify which and how tenants will be affected consider implications for your business planning and future business model plan communications with those affected plan transition Universal Credit will be phased 2013-2017 support the cultural change: new channels and personal responsibility consider partnership and integration opportunities perhaps sharing estates? 21
Conclusion radical changes to the benefit system move towards Universal Credit over time, with implications for delivery of housing services and costs work in progress on delivery model: joining up services we will need to do things differently: on-line claims and real-time processing and so will our citizens Universal Credit in context of broader welfare transformation Welfare Reform alongside some major work to configure broader services especially localised Council Tax support and new fraud services Pension Credit will provide help with eligible rent and dependant children for pensioners 22
Questions 23