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Welfare Reforms Ursula Barrington. Welfare reforms On 16 February 2011 the Welfare Reform Bill was introduced to Parliament. The Bill legislates for the.

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Presentation on theme: "Welfare Reforms Ursula Barrington. Welfare reforms On 16 February 2011 the Welfare Reform Bill was introduced to Parliament. The Bill legislates for the."— Presentation transcript:

1 Welfare Reforms Ursula Barrington

2 Welfare reforms On 16 February 2011 the Welfare Reform Bill was introduced to Parliament. The Bill legislates for the biggest change to the welfare system for over 60 years.

3 Welfare Reforms It introduces a wide range of reforms that are intended to deliver the commitment made in the Coalition Agreement their aim to make the benefits and tax credits systems fairer and simpler

4 Summary of the Bill The Bill provides for the introduction of a 'Universal Credit' to replace a range of existing means-tested benefits and tax credits for people of working age, starting from 2013.

5 Summary of the Bill Besides introducing Universal Credit and related measures, the Bill makes other significant changes to the benefits system.

6 Key areas Introduces Personal Independence Payments to replace the current Disability Living Allowance Restricts Housing Benefit entitlement for social housing tenants whose accommodation is larger than they need Up-rates Local Housing Allowance rates by the Consumer Price Index

7 Key Areas Amends the forthcoming statutory child maintenance scheme Limits the payment of contributory Employment and Support Allowance to a 12-month period Caps the total amount of benefit that can be claimed.

8 Benefit Increases Increases will be based on the Consumer Price Index rather than the Retail Price Index From 2013 A cap on the total amount claimants can receive in benefits.  £500 per week for families  £350 for single people

9 Benefit Increases If their benefits exceed this amount it will be the Housing Benefit that is reduced to limit the total to £500/£350.

10 Impact Will depend on factors such as family size and rent – An unemployed couple with five children would only have £67.13 in benefit left from the cap for rent Impact on TMO’s – higher arrears, evictions, people unable to occupy due to affordability.

11 Non- dependant deductions Increased at the beginning of April 2011. These deductions have been frozen since 2001 Staged increases will be applied from 2011 to bring them up to the level they would have been if there had been an ongoing annual uprating.

12 Impact Tenants getting into difficulty paying increased contributions with benefit increases lower than RPI Possible increase in rent arrears

13 Underoccupation From April 2013, social housing tenants of working age will only get Housing Benefit based on their family size. Disabled tenants who have a non- resident carer can get Housing Benefit for an extra bedroom in their home.

14 Impact An impact assessment carried out Department of Works and Pensions estimated 32% of Tenants will be affected losing between an average of £11 to £20.00 per week. Once again increase in rent arrears. Tenants having to relocate.

15 Disability Living Allowance From April 2013 all new claims and existing claims for Disability Living Allowance will be based on a new medical test that will apply to those aged 18 - 64 only. It is estimated that it will take about 3 years to test all the existing claimants.

16 Tax Credits Some people with higher incomes will have lost entitlement from April 2011. Others will get less money. From April 2011 people aged 60+ can qualify for working tax credit by working at least 16 hours.

17 Tax Credits From April 2012 the extra amount a claimant aged 50+ gets when they return to work after long-term illness or unemployment is abolished. Other changes include reducing backdating from 3 months to 1 month and the amount of increased earnings that can be ignored has reduced.

18 Other Changes Child Benefit has been frozen for 3 years from April 2011. The £500 SureStart maternity grant for people on certain benefits will only be for the first birth in the family from April 2011. The new £190 health in pregnancy grant was abolished from January 2011.

19 Other Changes Lone parents whose youngest child is 7 years old have had to claim Job Seekers Allowance instead of Income Support since October 2010 and this will drop to age 5 from October 2011. The Child Trust Fund has also been abolished for births from January 2011.

20 Incapacity Benefit This has been replaced already for new claimants by Employment Support Allowance. The reassessment process started in February 2011, to see if those currently getting Incapacity Benefit will get Employment Support Allowance.

21 Incapacity Benefit The test for Employment Support Allowance is tougher than the previous test for Incapacity Benefit and there will be regular reviews to reassess entitlement. Anyone not entitled to Employment Support Allowance will have to claim Job Seekers Allowance instead.

22 Universal Credit The idea of the Universal Credit is to simplify the benefits system from several means tested benefits to one benefit. The Welfare Bill abolishes; income based Job Seekers Allowance, income based Employment Support Allowance, Income Support, Housing Benefit, Council Tax Benefit, Child Tax Credit and Working Tax credit.

23 Universal Credit The transfer from old benefits onto Universal Credit will start in 2013. Universal Credit will be centrally administered by the Department of Works and Pensions and this will mean that the Housing Benefit part of Universal Credit will be taken away from local authorities.

24 Universal Credit The Housing Benefit part of the Universal Credit will be based on the current Housing Benefit rules. Under-occupation measures will carry forward. The housing element of universal credit can only go direct to a landlord in very limited circumstances.

25 Universal Credit There is great concern in the social housing sector that this will see the end of direct payments.

26 Overall Less income- higher outgoings Impact on peoples ability to pay rent Impact on TMO community Impact on staff Impact on services

27 WHAT CAN YOU DO Use your profiling information to identify the Tenants that will be affected. Provide staff with training :- –financial inclusion –Financial capacity building –Prevention measures to stop households falling into poverty

28 WHAT CAN YOU DO Start Talking to your Tenants before the changes take place Send out bite sized information to Tenants regarding the reforms. Carry out home visits to individuals to discuss impact

29 What Can You Do Review your allocations schemes- Priority to Tenants needing to move to smaller properties? Limit underoccupation Carry out affordability test at offer stage Inform applicants at offer stage of benefit reforms that may affect them

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