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The Impact of Welfare Reform Bethany Eckley Research Manager, Church Urban Fund June 2013.

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Presentation on theme: "The Impact of Welfare Reform Bethany Eckley Research Manager, Church Urban Fund June 2013."— Presentation transcript:

1 The Impact of Welfare Reform Bethany Eckley Research Manager, Church Urban Fund June 2013

2 Mission: to transform the lives of the poorest and the most marginalised in England.

3 Overview 1.It All Adds Up: cumulative, financial impact of welfare reforms. 2.The Human Cost of Welfare Reform: broader impact on people’s everyday lives.

4 1. Financial impact of reforms Case studies simulate tax-benefit changes 2010 – 17 Methodology: – Figures adjusted using RPI – Gross earnings rise with inflation – Rents rise by 4% pa – Hholds move to Universal Credit in 2016/17

5 Mark and Sarah Mark is a full-time cook, earning £25,000 pa. Sarah looks after their three children. They live in a private property in east London.

6 Gain £450 per year – increased tax allowances Gain £240 per year – freeze in Council Tax charges Lose £1,470 per year – reductions in tax credits Lose £1,760 per year – changes to Housing Benefit Lose £400 per year – changes to Child Benefit Mark and Sarah: = loss of £3,000 pa

7 Mark and Sarah’s annual disposable income (after housing costs), 2010/11 to 2016/ % - 5% Signifying a 13% reduction in five years.

8 Sam Single man of working- age. Disabled, but moves from incapacity benefit to JSA. A local authority tenant in the north east.

9 Continues without earnings Loses £1,750 per year – the move to JSA Loses £470 per year – the ‘bedroom tax’ Loses £140 per year – a Council Tax charge Sam: = loss of £2,300 pa

10 Sam’s annual disposable income (after housing costs), 2010/11 to 2016/17 Signifying a 44% reduction in five years. - 44%- 45%

11 Representative? Mark and Sarah: – 5-7% average reduction for families with children (IFS 2013). Sam: – 1.5m reassessed by 2014, so far one in three judged fit for work. – 420,000 disabled people affected by ‘bedroom tax’.

12 2. The human cost of welfare reform 19 interviews at ten church or faith- based community organisations. To understand impact of reforms on people’s every day lives. To reflect on how churches might best support those affected.

13 Incapacity Benefits Jobseeker’s Allowance Work Capability Assessment Impact of changes to disability benefits Employment and Support Allowance

14 “The biggest change is the move from ESA onto JSA. Now I would say personally that in many cases it is a good thing... But some of them that are being forced onto Jobseeker’s aren’t well and they can’t cope and those are the ones that we help.”

15 Those correctly found fit for work: the difficulty of moving into employment.

16 Those incorrectly found fit for work: appealing the decision.

17 Impact of changes to Housing Benefit From April 2011, a cap on Local Housing Allowance: —£230 per week, one bedroom —£290 per week, two bedroom —£340 per week, three bedroom —£400 per week, four bedroom From April 2013, the ‘bedroom tax’: —14% less eligible rent for one spare bedroom —25% less for two or more spare bedrooms

18 “Some of our families from the school have been completely moved out of the area because of the housing benefit changes... They've gone all over the place, but miles away... And of course they’re still travelling into school because their whole network is here.” Families moving home, leaving support networks behind.

19 Families struggling with the ‘bedroom tax’.

20 “For me, the biggest issue is the lack of compassion in the changes that are taking effect. Amongst the people making the decisions, there is either a refusal or an inability to understand that when you change something at the top, it is the people at the bottom of the food chain that it hits the hardest, and it hits quickest.”

21 Church-based responses Three groups affected by specific reforms: 1.Former incapacity benefit claimants who need to move into employment. 2.Former incapacity benefit claimants wrongly judged as fit for work. 3.Households affected by Housing Benefit changes.

22 ChallengesPossible church-based responses Short-termReduction or delay in benefit payments. In-kind support Cash support Transitional Overcoming barriers to employment: ­ poor CV or job application writing skills; ­ access to computers for job searches; ­ cost or lack of public transport; ­ childcare costs. Running job clubs Providing access to computers Setting up car shares Increasing availability of childcare Long-termLack of self-esteem, qualifications or skills.Confidence building courses Offering training opportunities Hosting voluntary placements Former incapacity benefit claimants who need to move into employment

23 Together: we can help to transform the lives of the poorest and most marginalised in England.


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