Welfare Benefit Reform: From Housing Benefit to Universal Credit Peter Meehan HB Adviser CIH Scotland/HSEU Edinburgh 20th March 2014

Major HB Changes so far in 2013/14 Spare room subsidy restriction (bedroom tax) Benefit Cap (July/Sept 2013) LHA rates continue to be restricted (CPI for 2013/14 and 1% annual increase limit from April 2014) LHA Shared Accommodation Rate emerging as a real difficulty for under-35s

Emerging issues predicted increases in rent arrears have become a reality. political debate on bedroom tax has heightened Homeless families in TA holding out for correct size of permanent social sector housing? DWP announced extra DHP funding midway through financial year Scottish Government also announced extra funding midway through financial year to cover gap between DWP’s basic DHP allocation and DHP upper spending limit (basic allocation x 2.5) First tier tribunal decisions now beginning to highlight perceived inadequacies in both policy and guidance. Court of Appeal has rejected appeals that the reforms conflict with European Human Rights, that women have been unfairly discriminated against and that a disabled adult should have an extra bedroom on same terms as disabled children.

Options for claimants faced with cuts in Housing Benefit Make up shortfall from current income? Take up paid employment? Increase earnings to meet shortfall? Downsize to smaller accommodation? Apply for DHP? Take in a Lodger? Challenge decision to class a room as a bedroom?

HB/UC (Size Criteria) (Miscellaneous Amendments) Regulations 2013 Criteria for extra bedroom for disabled child in HB includes requirement that the child be ‘entitled’ to DLA care component at higher or middle rate. Criteria for extra bedroom for disabled child in UC includes requirement that the child be ‘in receipt’ of the DLA care component at the higher or middle rate

Pre-1996 ‘loophole’ Any HB claims that have been running continuously, unbroken since before 1996 are exempt from under- occupation and any such deductions should be added back to the HB from April DWP has amended the HB regulations from 3 rd March 2014, closing the ‘loophole’ and re-introducing deductions for those who had qualified for the pre exemption (approx. 4,000 cases in Scotland)

For those out of work For those already in work Sanctions if failure to meet conditions

Conditionality roll-out Jobseekers Agreement beginning to roll out now in advance of the full Claimant Commitment which will be a key condition for Universal Credit Either meet conditions or JSA/UC standard element will be subject to sanction ( 4 week withdrawal of JSA for first period of non- compliance then 13 week withdrawal for second and subsequent periods) Introduction of Community Work Placements Sanction does not apply to HB or to housing element of Universal Credit

JSA Claimant Commitment When someone makes a new claim for JSA or returns to JSA from the work programme they will attend an interview with a work coach. At the interview they will agree a personal plan outlining what the claimant will do as part of their Claimant Commitment to give themselves the best chance of finding work.

JSA Claimant Commitment (contd) This could include regular specific tasks and training opportunities. The work coach will explain the penalties claimants could face for failing to meet their responsibilities to get into work The plan will be reviewed regularly

Sanctions Number of Sanctions in , % of JSA claimants per month One third are for failure to actively seek employment One third are for failure to participate in work programme or training One fifth are for failure to attend advisory interview

New Appeal arrangements for Social Security benefits. Introduces a reconsideration stage before appeal can proceed to Tribunal Service No time limit for reconsideration stage Does not apply for HB ( which was scheduled to have been closed down for new claims from those of working age starting from October 2013) Ministers considering introducing a charge for appeals

Single Fraud Investigation Service Staff Transfer mechanism to be finalised (Section38 of the Employee Relations Act 1999?) Phase 1- a small number of sites in summer 2014 followed by evaluation Phase 2- implementation to re-commence in October 2014 and run for further 18 months to March 2016 by which time transfer will be completed for all LAs. Detailed discussions with sites are due to commence in May with Road Shows from April to May 2014 to explain all aspects of the transfer to LA representatives

JSA (income based) ESA (income related) Income Support Child Tax Credit Working Tax Credit Housing Benefit

Standard Allowance element Child Element Child Care Costs element Capability for Work element Carer element Housing cost element

For private tenants the ‘housing costs element’ in Universal Credit will carry forward existing Local Housing Allowance provisions. For council tenants and tenants of Registered Social Landlords ( including Housing Associations) the actual rent less any ineligible service charges, non- dependant deductions, restrictions or sanctions

Recent developments Universal Credit national roll out, originally scheduled to begin from October 2013, has been delayed. A root and branch review of the whole Universal Credit development was carried out by new Director General, Howard Shiplee, against the background of a scathing report by National Audit Office. HB for pensioners will remain in place for all claimants over 60 until at least financial year 2017/18 (delayed because the introduction of the Single Tier Pension brought forward to 2016).

Recent statement by IDS on Universal Credit IT development Change in IT strategy Development of a ‘Digital’ solution Testing during 2014 and 2015 End State Solution complete and ready by end of 2015 No new claims for JSA by end of 2016

Universal Credit UC is currently live in 9 Pathfinder areas. Original 4 sites (Tameside, Oldham, Wigan and Warrington) Hammersmith/Fulham went live from October 2013 Rugby and Inverness went live from November 2013 Bath/NE Somerset and Harrogate went live from February 2014 One final pathfinder, Flintshire, due to go live from April 2014

UC Pathfinder caseload data April to October 2013 Between April 2013 and 30 th November 2013 a total of 3,610 single people had started on Universal Credit On 30 th November 3,200 claimants remained on UC Male to female ratio 7:3 Majority of new claims (70%) under 25 (so how many have housing costs????) So, with first year almost complete still small numbers of the easiest possible claims, mainly being processed manually using spread sheet technology

UC roll-out : next steps in 2014 claimant scope will be expanded in the pathfinder sites to include couples and then families (when depending on ‘system’ readiness) geography will be expanded to take in more of the North West of England using a flexible approach to sequencing, dependant on testing and learning this will conclude investment in the pathfinders

UC roll-out : 2014/15 build a core digital service that will deliver to 100 people initially, continuing progressive approach to test, learn and implement as programme is delivered

UC roll-out : 2016 all areas will go live for new claims, with no new claims for existing benefits for those of working age by end of calendar year some migration will start, with all existing claims to be transferred over to Universal Credit by the end of 2017 (with the exception of 700,000 sick and/or disabled who will remain on ESA and HB for foreseeable future)

Autumn Statement 2013 and Budget Statement 2014 An overall cap on the Welfare Benefit Budget (excluding expenditure on State Pensions, JSA and JSA/HB) with an initial budget adjustment for 2015/16 followed by an annual increase limit of no more than 1%. No Housing Benefit/UC housing cost element for under 25 year olds?????