Welfare Reform Jude Bevan Revenues & Benefit Service Manager

Welfare Reform Changes to Housing Benefit Benefit Cap Local Council Tax Reduction Scheme Welfare Grant Universal Credit Employment Support Allowance Child Benefit

Changes to Housing Benefit Local Housing Allowance (LHA) Changes

Local Housing Allowance (LHA) changes LHA is a way of working out Housing Benefit for people who rent from a private landlord. We use the LHA rate based on the size of the household, different rates are associated to different areas within the country. Changes to LHA were introduced in April 2011 and the main changes were: LHA rate reduced from 50% average market rent to 30% Maximum rooms limited to 4 Shared Accommodation Rate was extended for single occupants with no children from 25 year olds to those under 35

Changes to Housing Benefit Social Sector Size Criteria (Bedroom Tax)

Social Sector Size Criteria From April 2013 if a social sector tenant is over accommodated their Housing Benefit will be restricted Either by 14% - one bedroom 25% - two or more bedrooms Percentage is applied to eligible rent

Social Sector Size Criteria One bedroom for each of the following: A couple/single person A person who is not a child (age 16 or over) Two children of the same sex under 16 Two children of same or opposite sex who are under 10 Any other child

Social Sector Size Criteria A disabled tenant or partner who needs a non-resident overnight carer Foster carers will be allowed one additional room Parents with adult children in the armed forces (or reservists) who normally live with them Disabled (medical condition) child who is unable to share a bedroom. Household bereavement protected for 12 months

Changes to Housing Benefit Benefit Cap

Overall Benefit Cap Limit on the total amount of benefit National roll out to be completed The level of the cap will be: £500 a week for couples (with or without children living with them) £500 a week for single parents whose children live with them £350 a week for single adults who don’t have children, or whose children don’t live with them Administered jointly by DWP & local authorities

Benefit Cap Includes Bereavement allowance Carer’s allowance Child tax credits and child benefit Employment Support Allowance unless in support group Guardian’s allowance Housing benefit Incapacity Benefit Income support and jobseekers’ allowance (IB) Maternity Allowance Severe Disablement Allowance Widowed Parent’s Allowance and Widow’s Benefit

Benefit Cap Disregards include: Bereavement payment Local Council Tax Reduction Scheme Discretionary housing payments Retirement pension Welfare Grant payments Pension credit Statutory adoption pay Statutory maternity/paternity pay Statutory sick pay

Benefit Cap Exempt households Entitlement to Working Tax Credit Any one in the household in receipt of: Disabled Living Allowance Industrial Injuries Benefit Personal Independence Payment (replacement to DLA for working age) Attendance Allowance Employment Support Allowance support component Armed Forces compensation scheme, War widow(er) pension or war disablement pension

Local Council Tax Reduction Scheme

On 31 March 2013 council tax benefit was abolished Every local council required to devise their own local scheme South Glos over 15% reduction in grant funding for awards New schemes need to either award less, cost less or be funded by the LA South Glos introduced a one year scheme replicates Council Tax Benefit rules

Local Council Tax Reduction Scheme Pensioners are a mandatory protected group Applies to both existing customers of pensionable age and new claimants of pensionable age LCTR Scheme is no longer treated as a Benefit but as a Council Tax discount Consultation for 2014/15 scheme closed 20 September Consulted on 3 options

Local Council Tax Reduction Scheme Option 1 – standard percentage Option 2 – income bands Option 3 – change existing scheme

Local Council Tax Reduction Scheme We also wanted views on protection to vulnerable groups A – Families & lone parents with child under five B – Families and lone parents with disabled children C – Those with additional needs due to disabilities all premiums D – Those with additional needs due to disabilities enhanced premium E – Those with additional needs due to disabilities severe disability premium

Standard Percentage Current scheme rules would remain the same All recipients would have their entitlement reduced Reduction would be 38% where there is no additional protection for some groups Reduction could be up to 52% where there is additional protection for some groups

Income Bands There would be new rules for this option A person’s net income (combined with that of their partner if they had one) would determine entitlement Income would fall in to one of eight bands Band would determine percentage entitlement to council tax reduction

Change existing scheme A number of changes would need to be made Combine it with scheme that limits entitlement Modelled without protection to vulnerable groups as scheme is complex Two kind of changes – Amending current rules – Introducing entitlement limits

LCTR – next steps Report to P & R committee 25 November Decision made by Council 12 December Customers will be advised in writing of option Effective from April 2014

Abolition of Discretionary Elements of Social Fund

Social Fund Changes New power devolved to local authorities following abolition of DWP community care grants and crisis loans. No statutory requirement for the council to provide a scheme Government expects the funding to be used to provide the new service SGC allocated programme funding of £344,050 for 2013/14. Once funding exhausted there is no further funding available unless the council itself provides it.

Social Fund Changes No cash awards Only 2 applications is a rolling 12 month period Tel number is Apply online or by phone Policy is on Welfare Reform page of Internet Working with sofa project & Emmaus

Universal Credit

Universal Credit will be a new single payment and it is aimed to simplify the benefits system UC will being rolled out slowly and will replace: Income-based Jobseeker’s Allowance Income-related Employment and Support Allowance Income Support Child Tax Credits Working Tax Credits Housing Benefit.

Universal Credit The main differences between Universal Credit and the current welfare system are: Universal Credit is an in work and out of work benefit Most people will apply online and manage through online account Universal Credit will be responsive to people’s changes Universal Credit still paid when employment found One monthly payment made paid into a bank account Support with housing costs will go direct to the claimant as part of their monthly payment.

Employment support allowance (ESA)

Employment support allowance Introduced from 27th October 2008 and was designed to replace Incapacity Benefit and Income Support paid because of incapacity. It is for customers who are sick or disabled and is financial support if a customer is unable to work and offers personalised help to return to work for those that are able to. ESA can be applied for if a person is employed, Self employed, unemployed or a student in receipt of disability living allowance Basic Conditions – At least 16 years old – Must have a limited capability for work – Must not be over pensionable age – Must be in Great Britain – You are not entitled to IS or JSA – Not entitled to SSP.

Employment Support Allowance ESA has both a Contributory and Income Related element. Customers who satisfy the National Insurance contribution conditions or meet the youth rules will get Contributory ESA. If a customer’s income is low enough, this can be topped up by Income Related ESA. This can also be paid if they do not qualify for Contributory ESA but have a low enough income. ESA Rates Basic Allowance 2013/14 – Age £56.80 – Age (main phase) £71.70 – Age 25 + £71.70 – Work Related Activity Component £28.45 – Support Component £34.80

Employment support allowance The figure can be reduced if in receipt of a personal or occupational pension or personal health insurance of over £85 gross per week. The benefit will be reduced by 50% of any amount over £85. Certain pensions paid in respect of death due to war or military service and certain other armed forces compensation is ignored. income and savings can affect income-related or contribution-based ESA. Income can include: – Customer and customer’s partner’s income – savings over £6,000 – pension income – IF savings are over £16,000 income-related ESA can not be applied for. ESA isn’t usually affected if a customer : – works and earns up to £20 a week – work and earn up to £99.50 a week doing work supervised by someone from a local council or voluntary organisation – Supported permitted work – work less than 16 hours a week, earn up to £99.50 a week for up to 52 weeks – Permitted work

Child Benefit

Changes to the rules on child benefit came into force from January 2013 Will reduce the entitlement of about 1.2 million families. Families where one parent is earning more than £50,000 a year will no longer be able to claim the total amount of child benefit. Rules include an expectation that couples will disclose to each other whether they claim child benefit, or earn above £50,000 a year

Earners Annual Child Benefit after taxDetails One Income of £49,000£1,752 With one earner on an income of less than £50,000, this family keeps the full child benefit, which for two children is £1,752 a year One income of £54,000£1,052 Can keep some benefit but must repay 1% per £100 earned over £50,000. In this example the charge is £700 Two incomes: £35,000 + £20,000 £1,752 Although the couple's joint income is over £50,000 they keep all their child benefit as neither one earns over the threshold. Two incomes: £20,000 + £61,000 £0 Because one partner earns over £60,000 they must either stop claiming or repay the full £1,752 through the tax charge.

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