Presentation is loading. Please wait.

Presentation is loading. Please wait.

Welfare Reform and Impact on Life Course Groups Michael Tornow

Similar presentations

Presentation on theme: "Welfare Reform and Impact on Life Course Groups Michael Tornow"— Presentation transcript:

1 Welfare Reform and Impact on Life Course Groups Michael Tornow

2 Welfare reform in the UK and Scotland Key points: On 5 December 2012 the UK Chancellor announced that annual increases of many working-age benefits from April 2013 until April 2016, excluding disability and carer’s benefits, will be limited to 1% per year. It is estimated that 15,000 children will be pushed into poverty in Scotland, and that 200,000 children across the UK will be in relative poverty as a result of benefits being uprated by only 1% from 2013–16. In April 2013 the Scottish Government introduced a welfare fund which will include crisis payments for those who cannot afford to feed their children. Benefits not subject to the 1% annual increase, such as disability benefits, will rise at the rate of CPI rather than the more generous RPI used previously.

3 The weekly rates of Personal Independence Payment were published on 13 December 2012, and are similar to those paid for Disability Living Allowance. The DWP anticipate that 330,000 of the 560,000 Disability Living Allowance claimants to be reassessed by October 2015 for Personal Independence Payments will either lose their benefit entirely or have payments reduced. There is a lack of published detail about the Universal Credit despite it being initiated from 2013. The Welfare Reform (Further Provisions) (Scotland) Act was enacted on 7 August 2012 to allow the Scottish Government some power to mitigate for the negative impacts of welfare reform. Practical details are still to be published. In February 2013, Scottish regulations were published which ensure that passported benefits, such as free school meals continue.

4 Scottish Government, and COSLA are providing £40 million in 2013/14 to maintain Council Tax Benefit payments to claimants once responsibility for the benefit transfers to Scottish Government. From 2008 until 2014, disabled people claiming Incapacity Benefit are being transferred to Employment Support Allowance, resulting in incomes being reduced and, in some cases, benefits are time limited. As of April 2012, eligibility criteria for Tax Credits, Child Benefit and Housing Benefit are being significantly tightened. From April 2013 single people and couples who are housing association and local authority tenants with more than one bedroom have their Housing Benefit reduced, on average by 14%.

5 In Scotland, 8 out of 10 households facing reductions in Housing Benefit include a disabled adult. The ‘bedroom tax’ aspect of Housing Benefit was subject to a legal challenge by law firm Leigh Day, on the grounds that disabled people in the UK are disproportionately affected. From September 2013 a benefit cap of £26,000 a year is being introduced throughout Great Britain. This translates to weekly limits of £350 for individuals, or £500 a week for families. Claimants of Working Tax Credit or Disability Living Allowance are exempt. In Scotland in 2013/14, approximately 2,500 households will on average lose £93 a week with around 3,500 adults and 7,000 children affected by the benefits cap. Households containing three or more children or living in high rent areas will be most affected.

6 Impact of welfare reforms on life course groups Early years Young lives Income work and health Older people

7 Early years Financial support conditions have now tightened for single parents, with Income Support eligibility continuing only until children are aged under five, instead of the previous support to age ten. To be able to claim Working Tax Credit, single parents will be required to work at least 16 hours per week. Annual increases of 1% between April 2013–16 (for Working Tax Credit, Income Support and Child Benefit) mean a real-term reduction in the financial resource of both single and dual adult recipient households, putting families on the lowest incomes at increased risk of child poverty.

8 Early years continued Couples with children claiming Working Tax Credit now need to work a combined total of 24 hours or more per week, with one of them working a minimum of 16 hours. Means testing has tightened for Child Tax Credit and Child Benefit entitlement. For the former, support will not be given if a claimants’ salary exceeds £26,000 with one child, or £32,000 with two children. Universal Child Benefit has now stopped, with higher paid individuals no longer being entitled to payments. Eligibility for free school meals after Universal Credit and Personal Independence Payments are introduced is still unclear. Access to Healthy Start vouchers for milk and fruit available to pregnant women or mothers with children aged four or under and who are on a low income) will continue once Universal Credit is introduced.

9 Young Lives Age restrictions often prevent younger people from accessing financial support. Only 18 year olds can claim Jobseeker’s Allowance and this threshold is higher for claimants in education, who are not entitled to claim the benefit until aged 20. The eligibility ages for Working Tax Credit and the higher payment of Housing Benefit were raised from 18 to 25, and from 25 to 35 respectively. People aged under 25 can no longer claim Working Tax Credit and it is now a requirement to work a minimum of 30 hours per week to be eligible for this benefit. As full-time employment is scarce, particularly for young people, those who struggle to find this level of employment will be unable to claim Working Tax Credit.

10 Young lives continued Housing Benefit payments have been reduced, with only people aged over 35 now receiving sufficient benefit to rent their own home, compared to the previous entitlement for those aged 25. People aged under 35 will now need to share accommodation, which will result in limiting the housing options for young people. Young disabled people aged between 16 and 20 (or 25 for those in education) are no longer able to claim contribution-based Employment Support Allowance. Young people will need to claim income- based Employment Support Allowance instead, which is means-tested and may disadvantage some claimants. Annual increases of 1% between April 2013–16 (for Working Tax Credit, Jobseeker’s Allowance and Employment Support Allowance), mean a real- term reduction in the financial resource of both young single people and young couples.

11 Income work and health Restrictions now apply to financial support for people in work or unemployed and on a low income. Claimants are no longer entitled to claim either Income Support or income- based Jobseeker’s Allowance if they work more than 24 hours (or more than 16 hours if they are the partner of a claimant). People who are no longer entitled to these benefits or Tax Credits may cease to be eligible for passported benefits such as free school meals or concessionary travel, which would further depreciate a limited income.

12 Support for housing costs is being significantly curtailed, which will amount to a considerable cut in income for people who rely on this support. The amount of Housing Benefit available as Local Housing Allowance to private sector tenants was restricted to 30% of the value of local rents. Previously this was paid at 50%. Housing Benefit is now reduced for local authority or housing association tenants who are renting a house with more than one bedroom. An exception to this is in the case of disabled people who have a non-resident carer. The UK government intend that approved foster carers and households including Armed Forces personnel will also be exempt. Nevertheless, the changes are likely to result in many people struggling to pay rent or needing to relocate to smaller properties. The situation for people who now need to seek one-bedroom accommodation is problematic as very few one- bedroom housing association or local authority properties are available. Being limited to one-bedroom accommodation will also present complications for people who have shared access to their children, or for disabled people – especially those living in adapted accommodation, who will need to relocate.

13 Disabled people of working-age are experiencing considerable reductions to their incomes as entitlement to disability benefits are changing. Incapacity Benefit claimants are being transferred to Employment Support Allowance, which is paid at a much lower rate. Payments to claimants of contribution-based Employment Support Allowance in the ‘Work Related Activity’ group are being limited to a maximum of a year. Employment Support Allowance decisions are frequently challenged and successfully appealed, however, payments usually cease until appeals have occurred. Working-age disabled people now need to apply for Personal Independence Payment, with existing claimants of Disability Living Allowance being reassessed. The UK government anticipates 330,000 people will lose all or part of their benefit by October 2015. Eligibility criteria for the Personal Independence Payment differs from the existing Disability Living Allowance, and claimants who are reassessed and who no longer qualify for the higher rate will not be able to access support such as the Motobility Scheme. Unlike other benefits, Disability Living Allowance, the Personal Independence Payment and the ‘Support’ element of Employment Support Allowance will rise at the rate of the CPI from 2013–16. Previously the Retail Prices Index (RPI) was used, which is more generous.

14 Older People People aged 60 or over now need to work 16 hours to be eligible for Working Tax Credits. Older people have been protected against restrictions to other benefits. For example, pensioners are not affected by the reduction in Housing Benefit for local authority and housing association tenants occupying accommodation with more than one bedroom from April 2013. Eligibility for concessionary bus travel in Scotland and the winter fuel allowance are universally available to pensioners irrespective of their means. The state pension is rising by 2.5% in 2013/14.

Download ppt "Welfare Reform and Impact on Life Course Groups Michael Tornow"

Similar presentations

Ads by Google