16 January 2013 Welfare reform: national policy ~ local impact

National policy ~local impact National policy: –Government cuts already imposed –Government cuts effective from 2013 Local impact: –Estimating and monitoring local impact –Mitigating local impact

National policy: overview £18 billion cut from benefits / tax credits spending Most cuts fall on people of working age Cuts come from: –Housing benefit – (all tenures) –Working and workless families with children –Sick and disabled Government autumn statement has cut £3.7 billion more from benefit bill by

National policy: cuts already imposed Work Capability Assessments for everyone on sickness benefits; contribution-based ESA limited to 52 weeks All benefits and tax credits up-rated by Consumer Prices Index ‘til 2013 (a lower index than the RPI, previously used) Child Benefit frozen for three years to 2013 Cuts to in-work tax credits Local Housing Allowance for private tenants capped Local Housing Allowance up-rated by CPI not market rent 27% hike in housing benefit non-dependant deductions Etc.

National policy: cuts effective from 2013 Social housing under-occupation HB penalty – 14% and 25% General out of work benefit cap: £350 / £500 Abolition of council tax benefit – transfer to local authorities with 10% cut Abolition of social fund crisis loans and community care grants Abolition of disability living allowance Benefits, tax credits and LHA caps up-rated by 1%, not CPI Phased introduction of Universal Credit and abolition of housing benefit

Impact on local people Islington’s share of £18 billion cut is about £40 million The benefit cuts target specific groups in the local population: –Tenants on housing benefit (all tenures) –People sickness and disability benefits –Families with children – in or out of work But these groups also overlap significantly

Private tenants hit by LHA caps 3,250 private tenants covered by LHA caps (86% lone parents) 1,316 (40%) LHA households exceed the cap Average loss of benefit is £45.71 a week Range is between £34 and £1000 a week

Under-occupying social housing tenants Size criteria that apply to private tenants will be imposed on social tenants under pension credit age 2,300 council tenants affected – unknown number in other social housing If under-occupying by one room – will have to meet 14% of base rent before housing benefit If under-occupying by more than one room – will have to meet 25% of base rent before housing benefit Does not apply to ‘supported exempt accommodation’

Adults claiming disability living allowance 7,780 Islington people of working age claiming DLA Phased from 2013, all will be told their DLA will end and they will be invited to claim Personal Independence Payment DWP expects 500,000 to come off DLA – this equates to 1600 (20%) Islington DLA claimants losing benefit

Families with children – in or out of work A total of 17 reforms reduce benefits for families Families with young children –Sure Start maternity grant for 1 st child only –Health in Pregnancy Grant abolished –Child Tax Credit baby element abolished –Child benefit frozen for three years Working families –Multiple cuts to in-work tax credits –Childcare element of Working Tax Credit cut by 10% –Working Tax Credit: excludes couples working under 24 hours

Workless households: benefit cap From September 2013, no household on out of work benefits can get more than £500 a week (couples) £350 a week (single) DWP have identified 900 Islington households above the cap –600 households lose more than £30 a week –728 households with children (1853 children) –Of the 728 households with children: –112 households are ‘troubled families’ (373 children)

Workless households: benefit cap Households exempt if claiming a number of benefits: disability living allowance; ESA (with support element); war pensions etc Most benefits other than council tax benefit count towards the cap – Housing benefit does not count to the cap total for those living in ‘supported exempt accommodation’

Ready reckoner Family Type No. of children JSA/ISChild Benefit Child Tax Credit Maximum housing costs Lone parent 5£71.00£73.90£268.45£86.65 “6£71.00£87.30£320.04£21.66 “7£71.00£100.70£371.63£0.50 Couple4£111.45£60.50£216.86£ “5£111.45£73.90£268.45£46.20 “6£111.45£87.30£320.04£0.50

General benefit cap and local services Temporary Accommodation Children’s Services Adult Social Care LHA 15 Total households in Children’s Services caught by general benefit cap – 112 Total in Temporary Accommodation caught by general cap – 227 Total subject to LHA caught by general benefit cap – 457 Total Adult Social Care households caught by general benefit cap - 10

The policy challenge Slightly worse offMuch worse offDestitute Very vulnerable Coping Workless families Working families Sick Disabled Large families Single LHA claimants under 35 Private tenants

Our local response Identify the cumulative impact of the reforms at household level Use new data sharing flexibilities to target households for support Work in partnership with JCP to offer households advice on benefit rights, housing options and access to employment and training Mitigate hardship and prevent escalation of need arising from welfare benefit cuts

Contact Martin Baillie Income Maximisation Service (freephone)