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Welfare Reform Update John de la Rue East Midlands IRRV 15 th August 2013.

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Presentation on theme: "Welfare Reform Update John de la Rue East Midlands IRRV 15 th August 2013."— Presentation transcript:

1 Welfare Reform Update John de la Rue East Midlands IRRV 15 th August 2013

2 LAs and Welfare Reform And the rest...  Increased DHP funding  Benefits Cap  Universal Credit April 2013 CTRS Social Sector rent restrictions LHA limited to CPI Social Fund Crisis loans (£133.3m) Community Care Grants (£141m) £m2013/142014/15 LP conditionality(£220)(£300) Size restrictions(£470) LHA uprating(£40)(£240) DLA(£350)(£1040) Benefit cap(£220)(£260) ESA time-limiting(£1130)(£1430) ESA Youth Provisions (£10) Other(£60)(£110) TOTAL(£2510)(£3870)

3 LAs and Welfare Reform And the rest...  Increased DHP funding  Benefits Cap  Universal Credit April 2013 CTRS Social Sector rent restrictions LHA limited to CPI Social Fund Crisis loans (£133.3m) Community Care Grants (£141m) £m2013/142014/15 LP conditionality(£220)(£300) Size restrictions(£470) LHA uprating(£40)(£240) DLA(£350)(£1040) Benefit cap(£220)(£260) ESA time-limiting(£1130)(£1430) ESA Youth Provisions (£10) Other(£60)(£110) TOTAL(£2510)(£3870)

4 CTRS Yr1 CTS scheme options 123 Leave as is and make up the difference Arbitrary cap [protecting vulnerable groups] Vary multiple parameters within existing CTB structure Example 1 338k properties77.5k CTB claims  30% reduction  Protection for disabled, households with children <5 and War Pensioners  Abolition of 2AR Band D: £1,31230% = £7.60 pw Example 2 32k properties4k CTB claims  15% in-work taper on 100% of liability  Abolish non-dep deductions  £6k capital limit  Band E restricted to Band D  Nil entitlement for Bands F, G and H  80% of liability  Protection for disabled and War Pensioners  Child Benefit and Child Maintenance  13 week protection  Nil entitlement for under 25s Band D: £1,46720% = £5.64 pw

5 CTRS Yr1 and beyond Approach to Yr1  82% (of 326 LAs) reduced entitlement  18% made no change  72% introduced a minimum payment  46% went for DCLG 8.5%  40% opted for 10 to 20% cut  Remainder are at 20% +  34% introduced a discretionary fund Questions for Yr2  Collection rates for CTRS debt  Option to change and align with CTax  Option to leave aligned to HB  Option to align with wider Welfare Reform agenda

6 The bedroom tax “Trying to define ‘significantly adapted accommodation’ for exemption purposes... would be difficult and expensive to deliver effectively, especially within Universal Credit. It would either be too broad brush or leave out many other, equally deserving cases. We therefore recommend increasing the DHP pot... this approach would enable local authorities to make decisions at a local level about which cases should be prioritised for financial help to meet any shortfall caused by this measure. This approach may produce inconsistencies in the way individual cases are treated across different parts of the country.” DWP Sept 2011 Emerging issues Shortage of suitable social sector housing Increasing rent arrears Tenant behaviour Non-engagers Payers-and-stayers Movers Increased and co-ordinated DHP activity Pressure on Social Housing providers Shifts in HB caseloads April % or 25% reduction in HB Only applies to working-age claims Exemptions for foster carers, and parents of disabled children and armed forces personnel Increased DHP funding available

7 The Benefits cap The following incomes are included:  Bereavement Allowance  Carer’s Allowance  Child Benefit  Child Tax Credit  ESA (except support Comp)  Guardians Allowance  Housing Benefit  Incapacity Benefit  Income Support  Jobseekers Allowance  Maternity Allowance  Severe Disablement Allowance  Widowed Mother’s Allowance  Widowed Parent’s Allowance  Widows Pension 2 tranches:  Working age  Private and public sector tenancies  Temporary homeless tenancies  DWP’s decision implemented by LAs  Limits amount of out of work benefits in payment to £350/£500.  HB reduced to apply the cap until Universal Credit is introduced  If applying the cap reduces HB to nil, leave £0.50 in payment so that a DHP may be considered.  Certain exemptions including meeting the qualifying conditions for WTC  Grace period of 39 weeks

8 LGA ~ The Local Impacts of Welfare Reform (Aug 2013) 1.71 million households will be affected by HB cuts 1.18 million of these will be ones where no-one works Highest impact in London and coastal towns 31.5% of households in Blackpool Relatively few are looking for or finding work Estimated that 155,000 may find work Estimated that 115,000 may move home 270,000 may therefore mitigate the impact of cuts Heavily dependent on local jobs and housing market Households on benefit will be £31 pw worse off (£1 in £7 of household income) Reasonably even spread across LAs (except London) Likely to have the largest impact on areas with high levels of Benefits dependence NE, Lancashire, Central NW, Birmingham, the Black Country, parts of London and coastal towns 59% of cuts fall on working households Impact can be mitigated by moving or finding work (but this is dependent on jobs and houses)

9 LGA ~ impact of HB reforms LHA changes Restriction to 30 th percentileApril ’11 LHA capApril ’11 Shared Room Rate for <35sJan ’12 Uprating limited to RPI (and thereafter to 1%) Apr ’13 Saving£1.51 billion Affecting1.15 million Average£25 pw Benefits cap Cap to £500/£250By Sept ‘13 Affecting50,000 Average£64 pw Affects: All couples with 4+ children and 4+ bedrooms All single parents with 5+ children Bedroom tax 14% or 25% for WAApr ‘13 Saving£395 million Affecting540,000 Average£14 pw Overall Affecting1.71 million Average£23 pw

10 DWP Nov 2010

11 Local Support Services Framework (Feb 2013)  Mental health issues  Learning difficulties  Drug or alcohol addiction  Homelessness  English language limitations  Literacy difficulties  Prisoners and detainees  16 and 17 year olds  Non EEA including refugees  Physical disabilities  Working abroad  Domestic violence victims  Sensory disabilities  Severely indebted  Over 18 care leavers  Gabling addiction  MAPPA claimants  Numeracy difficulties  Troubled Families programme  Rural isolation Building on existing support  Tailored and specialist support  Home visits  Verification  Identifying cases for payment direct  Tackling homelessness  Urgent support Support for new features of UC Triage and reorientation Online assistance Money advice Alternative payment arrangements Work related support

12 The UC claimant journey and local support (Feb 2013) Learn about UCCreate a UC accountProvide details for claim See likely payment amount Submit claimPrepare for interview Attend initial interview Prove ID and sign claimant commitment Receive award notification UC paid into bank account Budget monthly and pay rent Demonstrate actively seeking work Start/increase work Update detailsUC payment adjusts automatically

13 Universal Credit (Aug 2013) October 2013  UC on track for 2017  6 additional JCPs to take new UC claims from single unemployed claimants  10 in-work conditionality pilots  Improved access to digital services  Funding will be maintained to manage the full administration of HB in 2014 and 2015 Local Support Services Framework “continue to develop certain items where production is underway” Test aspects within the pathfinder and new UC areas Develop new opportunities over the next 18 months Another version in October 2013 and fully updated in October 2014

14 DWP Nov 2010

15 Welfare Reform & customers Welfare Reforms CTRS and bedroom tax from April ‘13 Elements of Social Fund devolved to 1 st tier authorities Benefits cap from July onwards CTRS YR 2 (without DCLG transitional grant) Housing Credit element of UC paid direct to claimants monthly in arrears Increased debt Increase in CTax arrears Increase in rent arrears Increase in DHPs, s13A applications and Social Fund claims Customers need Social Housing of the appropriate size or a regulated private rented sector Budgeting support and financial products (jam jar accounts) A joined-up approach to recovery and discretionary awards Supported self-service for digital-by-default services New jobs or increased hours

16 Welfare Reform & LAs Challenge No timetable Increasing demand and discretionary activity Local Support Services Framework Shortage and uncertainty of funding Inconsistent approaches and standards Role Support for vulnerable customers F2F, budgeting and finding work Increased discretion, managing demand and efficiencies Locally tailored but consistent with a national framework Customer segmentation for targeted provision LAs need Varying states of readiness 50% have caseloads <20,000 Confirmation of UC timetable, delivery model, LA role and funding arrangements Resilience to deal with diminishing caseloads and residual activity

17 Questions


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