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Welfare reform and impact Clive Davis Newcastle Welfare Rights Service Newcastle City Council.

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Presentation on theme: "Welfare reform and impact Clive Davis Newcastle Welfare Rights Service Newcastle City Council."— Presentation transcript:

1 Welfare reform and impact Clive Davis Newcastle Welfare Rights Service Newcastle City Council

2 To cover An overview of welfare reform Its impact on people and in Newcastle What is being done to try to mitigate the impact Your ideas? Who can help?

3 Welfare reform: Government savings £18 billion a year by 2014/15 £83m + a year in Newcastle + £4.5bn in Autumn statement Further £10bn planned by 2016 DWP & HMRC cut by over a quarter Higher benefit areas – hit harder e.g. Newcastle 14% on out of work benefits (28,790) York 7%

4 People incapable of work Incapacity Benefits reassessed under new Employment & Support Allowance (ESA) till 2014 (100 a week) Tougher test  4,000 plus in Newc to fail test and sign on - drop in income of about £40 a week Appeals & demands on services increase 40% appeals are successful May Contribution based ESA (for those who have paid National Insurance) stops after 1 year Income drop by up to £91 a week for some Some exemptions

5 Tax Credits from April 2011 Amounts cut & less people able to claim e.g. help with child care costs cut couples with children have to work 24 rather than 16 hours a week - April 2012 (exemptions) e.g. £8k yr wage - lost WTC of £61 a wk Average TC cut £1,000+ a yr 27,700 on Tax Credits in Newcastle (£5m lost) Nationally, £6.5b Tax Credits goes unclaimed

6 Housing Benefit - private Since 2008 limited to average rent on set No. of bedrooms. £91(1), £103(2), £113(3), £150(4) … 2011 limited to 4 bedrooms & cheaper rents (3,000 in Newc losing £4 - £34 HB a week) Jan12 bedsit rate for single under 25’s extended to under 35’s (344 in Newc losing £31 a wk) Exemptions

7 Housing Benefit - social April working age only, YHN, HA’s. Under occupancy rule (bedroom tax) = cut in the rent that’s eligible for HB. If: 1 spare bedroom = 14% (av HB cut £12/wk), 2 spare bedrooms = 25% (av HB cut £22/wk ) 6,000 YHN tenants affected. Some exceptions. Extra discretionary housing payment for hardship

8 Who is a bedroom allowed for? –Single person or couple –Any other person aged 16 or over –Two children of the same sex under the age of 16 –Two children aged under 10 regardless of their sex –A child aged 10 or over with no siblings of the same sex –A non-resident carer providing overnight care for the claimant or their partner –A severely disabled child who the LA considers cannot share a room with a sibling –Foster children in some circumstances –Armed Forces personnel in some circumstances

9 Impact of Housing Benefit changes Will have to find the rest of the rent or move home to cheaper/overcrowded property Increased demand for affordable social housing Increased arrears, hardship and demands on services Vulnerable may want to remain in supported housing Lack of one bed properties in social housing Eg. Jobseeker 25+ left with £37.50 after fuel, water, TV If bedroom tax (£7.57), left with £29.93 a week If LHA bedsit cut, left with £4.50 a week

10 Children Child Benefit Frozen till 2014 Withdrawn from higher earners £50 - £60K yr [Jan 2013] Lone parents – no Income Support once youngest child turns 5 Maternity Grant now only for first child Cancelled: Free school meals for those on Working Tax Credit £190 pregnancy grant Child Trust Fund EMA (up to £30/wk) replaced by smaller bursaries A baby born to a low-income family from April 2011 is around £1,500 worse off compared to a sibling born in April 2010 IFS predict child poverty will rise by 600,000, peaking at 3.1 million by 2013.

11 Disability Living Allowance From 8 April 2013 DLA for those aged will be replaced by Personal Independence Payment 10,860 in Newcastle Based on 20% desired cut to DLA, 1,944 in Newcastle expected to lose (£5m a year) Connected benefits lost (extra IS, Carers Allowance etc) Less independence & mobility More appeals and demands on services Timetable: 8 April13. new claims in North for PIP 7 Oct13. Certain existing DLA claimants to claim PIP Oct15 – Oct17. rest of existing claimants to claim PIP

12 Older people Retirement age for women is increasing from 60 to 65 (by 2018), 66 (from 2020) then 67 from 2026 (8 yrs earlier) Age rise for other help e.g. Winter Fuel Payments and Pension Credit - so have to remain on working age benefit longer: Loss of £3,632 a year - single person Loss of £5,395 a year – couple (difference between JSA and Pension Credit)

13 Work and conditionality More work and training requirements for jobseekers and ESA claimants e.g. Youth Contract – subsidized work placements for 18–24 yr olds and Mandatory Work Activity – 4 weeks Fail to comply: JSA cut or reduced to £42 wk from 4 wks to 3 yrs - Oct12 ESA cut by £71 to £28.15 min. Plus £42.60 if hardship - Dec JSA sanctions a month average in Newcastle Can appeal but no or reduced JSA in meantime Jobseekers lose mortgage help after 2 years 9,000 people on JSA in Newcastle

14 More changes this year April: Devolved to councils: Social Fund grants and crisis loans (shortfall £150k) Supported Independence Scheme & Crisis Support Scheme Council Tax Benefit. Working age people to get less Support limited to 91.5% of the bill. Exempt if severe disability From July to September: Household benefit cap (exemptions: pension age, WTC, DLA, in ESA support group): Benefit limited to average wage e.g. unemployed family with 6 children could lose all Housing Benefit due to the benefit cap Average loss £83 a week, 120 families in Newcastle

15 Jill’s welfare reform story Mild Aspergers, gets ESA & low rate DLA. Loses ESA and DLA means a drop of £48.70 to £71 a week JSA. After outgoings of £38.50 £2 crisis loan repayment, £6 water rates, £15 gas & electric, £5.50 TV license, £10 rent and Council Tax due to April’s under occupancy rule and localised CT support Left with £32.50 for food, clothing, travel etc. Fails to comply with work requirements: £71 down to £42.60 hardship Left with £4.10 for food, clothing, travel etc

16 Universal Credit Oct Simplified income related benefit for those in and out of work Replacing IS, TC, HB & income related JSA & ESA (working age) Other benefits will interact with it – as now Online claims and contact (like online banking) * Housing element paid to tenant rather than landlord * Paid monthly (rather than 2 weeks) in arrears to one in a couple * Mortgage help may stop if start work Some disability additions not continued in UC e.g. £3,500 a yr less Timetable: Oct13 new claims from Jobseekers, treated as UC claim Oct13 existing claimants moved to UC if certain change in circumstances April14 new claims from people in work treated as UC claim April14 - Oct17 remaining existing claimants phased ‘migration’ to UC Transitional protection only for those migrated

17 Welfare reform actions ‘Financial Inclusion’ work by NCC, YHN, Newcastle Futures, vol sector etc Raising awareness e.g presentations, information Help people mitigate welfare reform, exceptions, maximising entitlement, targeted take up, housing advice, homelessness prevention, prepare services & people for PIP and UC, online training budgeting advice, saving opportunities, digital inclusion (online claims support), libraries (best fuel tariff advice), co- ordinated advice YHN bus, visiting 7000 tenants at risk, more advisers Employment and training support

18 Newc Welfare Rights Service Citywide service providing f2f benefit and money advice 9000 clients last year with 17,050 issues £19.5+ million (£48m in last 3 yrs) in annualised benefit gains (= 300 jobs) £3 million debts written off Information, training, support

19 More information and support Welfare Rights advice line (professionals and priority groups): 0191 – Referral form via Debt line: 0191 – Citizens Advice: All in ‘Where to Get Advice in Newcastle’ Social Fund replacements: and Website….

20 More on welfare reform Debt and benefit information Where to get advice Referral form Fact sheets Self help material e.g. DLA, how to appeal a decision Benefit bulletin – news – sign up

21 What can you do? Be aware of welfare reform and impact Understand cumulative impacts Know there may be exemptions and mitigations What can you do? Know who to sign-post/refer people to..


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