1. Universal Credit and predicted impacts for recipients Mark Willis CPAG in Scotland

2. Aims of Today’s Seminar To get up to date with ongoing welfare reform and long term plans in Welfare Reform Bill To become familiar with universal credit To consider the effects of changes on claimants

3. Background Everyone on incapacity benefit / income support due to incapacity reassessed for Employment and Support allowance (ESA) Lone parents moved onto Jobseeker’s Allowance (JSA) when child turns 7 (5) Housing benefit cuts (especially affecting private sector) Tax credit cuts £18 billion of welfare cuts from 2010-2013

4. Welfare Reform Bill From April 2013: Disability Living Allowance to replaced by Personal Independence Payment Benefit cap = £26,000 Council tax benefit devolved & 10% cut Discretionary social fund (crisis loans and community care grants) abolished – replacement devolved

5. Universal Credit From October 2013 for new claimants under pension credit qualifying age Simplification – replaces working age means tested benefits and tax credits Increased incentive to work Increased conditions and sanctions if don’t look for work

6. Benefits to be replaced by universal credit Income support Income-based jobseeker’s allowance (JSA) Income-related employment and support allowance (ESA) Housing benefit Child tax credit Working tax credit No new claims from October 2013 Migration of existing claimants ongoing to 2017

7. Other benefits not part of universal credit Disability Living Allowance (Personal Independence Payment) Carer’s Allowance Pension Credit (to include additional amounts for housing and children) NB: both partners in couple must reach qualifying age Contributory JSA & ESA Child benefit

8. Universal Credit Single monthly payment direct to claimant Exceptions - in limited circumstances, payment may be direct to landlord/lender or split between members of a couple Abolition of hours rules – under 16 hours work will be worthwhile “No one worse off”

9. Universal Credit Claims, changes of circumstances and most client contact made online Local authority to provide support for people who cannot manage online Real-time earnings information from HMRC Claim, assessment and award made automatically

10. Universal Credit: Financial Conditions Income low enough to qualify: –some income disregarded in full; e.g. CB, DLA –other unearned income counted in full; e.g. contributory benefits, pensions –earnings subject to disregards and 65% taper Capital of less than £16,000 –tariff income between £6,000 and £16,000

11. Universal Credit - Amounts Single claimant or couple (joint claimants) Children or qualifying young persons (subject to benefit cap) Disabled child (amount halved) Severely disabled child Rent (all HB rules will continue) Mortgage interest (if not in work) Limited capability for work (ESA test remains) Limited capability for work-related activity Caring for a disabled person (changes to DLA)

12. Universal Credit: Conditionality 1. Claimants subject to no work-related requirements: –Lone parent with child under one (or main carer for baby in a couple –Very severely disabled people (support group in ESA) –Carers –Victims of domestic violence (within 13 weeks) –In work earning 35 x minimum wage

13. Universal Credit: Conditionality 2. Claimants subject to work-focused interview requirement only: –Lone parent with child aged 1-4 3. Claimants subject to work preparation requirement: –People with limited capability for work 4. Claimants subject to all work-related requirements: –Everyone else (jobseekers)

14. Universal credit: Sanctions Up to 3 years for repeated, regular failure if in all work-related requirements group Up to 26 weeks for failure if in work preparation Until attend work-focused interview Sanction covers personal allowance for adult only – amounts for children/housing not affected No sanction if in no work-related requirements group Hardship payments available (loan?)

15. Local authority issues? Increased homelessness/demand for social housing/discretionary housing payments Increased need for welfare rights advice Council tax benefit – new system? Assessment of crisis loan/community care grant Administering benefit cap/discretionary fund Help to deal with universal credit if not online Impact of sanctions on duty to children Regeneration / employment / loss to local economy

16. More Information www.cpag.org.uk COMING SOONCOMING SOON Universal credit guide CPAG in Scotland Advice Line for Advisers 0141 552 0552 (Mon to Fri 10 -12) Or email advice@cpagscotland.org.ukadvice@cpagscotland.org.uk