Welfare Rights
Benefit Training
2013
WELFARE REFORM?
MULTI MILLIONAIRES MAKING
DECISIONS THAT MAKE THE
POOR, POORER
WORKING TAX CREDIT (WTC)
AND
CHILD TAX CREDIT (CTC)
CHANGES
Recent main negative changes:
Tax Credits:
Most couples must now work 24 hours weekly with
one working at least 16 hours to get WTC.
Child care costs reduced to 70% from 80%
Excess income reduced at 41% rather than 39%
Over 50’s no longer allowed to claim WTC when
working 16 hours after being on certain benefits for 6
months
Tax Credits Continued:
The extra amount (£40 or £25 weekly) paid in WTC for one year for
the over 50’s who stop benefits to start working has been stopped
Backdating claims for WTC or CTC are now limited to 1 month
previously this was 3 months
The limits on earnings and income have been reduced resulting in
many people previously entitled no longer qualifying for CTC.
E.g 1 child upper limit is now £26,000, 2 children £32,000.
You could still qualify from 6 April 2012 if your income is above these
amounts. For example, if you pay for registered or approved
childcare, are disabled, or have more than one or two children.
Previously all claimants with children and income under about
£50,000 would have had £10+ weekly paid.
Tax Credits Continued:
Baby element in CTC worth £11 weekly removed.
On a positive anyone over 60 can now claim WTC
if they work 16+ hours and their earnings / income
is low enough?
* INCAPACITY BENEFIT (IB)
* SEVERE DISABLEMENT
ALLOWANCE (SDA)
* INCOME SUPPORT (IS)
BECOMES
* EMPLOYMENT SUPPORT
ALLOWANCE (ESA)
Incapacity / Income Support / Sickness Benefits:
The 2 year linking rule that allowed people to try work for up to 2
years knowing that they could get back their previous sickness
benefit has stopped
Incapacity for Youths (IBY) and Employment Support for Youths
(ESAY)
These benefits allowed a disabled child under 20 (Some under 25’s)
to qualify for the non-means tested contributory IBY or ESAY without
the need to have worked and paid the required national insurance
contributions over the previous two years.
Anyone already on IBY or Severe Disablement Allowance (SDA) who
is then transferred to ESAY could find it only remains payable for one
year.
Everyone on these benefits will be moved at some stage to
Employment Support Allowance (ESA) with most being
subject to the new stricter medical.
Contribution Based ESA is taxable
* Contribution based ESA for most only lasts one year,
when Incapacity Benefit and Severe Disablement
Allowance previously claimed would have lasted forever
* This one small change will cost the D&G economy £14
Million Pounds yearly
Local Housing Allowance (*LHA) / Housing Beneift (*HB)
Changes:
Shared room rate only for most under 35’s previously under 25’s
In Universal Credit (October 2013 onwards) HB will be paid
directly to Council / Social tenants, this already happens in LHA
Non – Dependent deduction increased by 24% over 2 years
The amount payable in LHA reduced to 30% of the average rents
The maximum amounts payable under LHA reduced, this will
effect high rent areas, London, Birmingham etc
* LHA is for private lets
* HB is for others
BEDROOM TAX
BEDROOM TAX: April 2013
This new change is ONLY for tenants of Council and other Social
Landlords in our area the main ones include DGHP, Loreburn Housing,
Irvine Housing and Home In Scotland
If tenants of working age (Under Pension Credit age currently 61.5 or
born after 5/10/51 at April 2013) have extra bedrooms they could lose
some or all of their existing Housing Benefit, so it is down to D&G
Council to stop or reduce peoples on-going Housing Benefit from April.
Once Universal Credit (UC) applies to the claimant it will be the on-going
UC that will be reduced.
Once UC is fully up and running there may be no Housing Benefit
departments needed in any Councils
From April 2013
Social housing tenants of working age
with one or more spare bedrooms will
have their housing benefit reduced by a
fixed percentage of:
14% if they have one spare room
25% if they have two or more spare
rooms
Bedrooms allowed?
* One bedroom for each adult couple
* Any other person over 16
* Two children of the same sex who are both under 16
* Any two children under 10
* Any other child
* A Carer who is required to stay overnight on a regular
basis to care for a disabled person and who has their own
home elsewhere
No reduction will apply if:
During the last year you have worked and not had any
help with your rent, no reduction will apply for 13
weeks.
A family member has died leaving you with an extra
bedroom, no reduction will apply for 12 months.
You have a shared ownership property.
You are in temporary (Normally) homeless
accommodation provided by the Council, the full HB
paid will count towards the benefit cap though.
Other exempt accommodation
Examples:
Single parent with three children, boy 7, boy 12, boy 14 Mum
needs a three bedroom property the 2 boys under 16 can share.
Couple with two children, boy aged 11 girl aged 6, they need a
three bedroom property, children off opposite sex can share if
under 10 but as the boy is 11 he needs his own bedroom.
Couple with two children, boy aged 15 and a baby boy aged 11
months, two children off the same sex under 16 can share, mum
needs a two bedroom property. Once the child turn 16 they will
need a three bedroom property as anyone over 16 needs their
own room.
Single parent with two severely disabled twin boys aged 13, both
boys have wheelchairs and live in a specially adapted four
bedroom house which has been extended with two extra
bedrooms added on the ground level for the wheelchair users?
This tax will hit foster carers who have spare
bedroom/s for when they foster.
People who share the care of children and have
extra bedrooms for when they live there
Disabled who are unable to sleep with partners
due to disability and use the spare room.
Disabled who need an extra bedroom for Dialysis
or other treatments or therapies
People who have extended and added an extra
bedroom for a disabled child ect
How Much?
Mums rent is £100 weekly
She is on Income Support as a Carer for her
disabled son aged 8, she also has another son
aged 14
Full Housing Benefit is paid at £100 weekly to
cover her full rent
She is with DGHP and has a three bedrooms
property
What if anything will she lose?
As the two boys are under 16 they can
share a bedroom so mum needs a two
bedroom property, leaving her with one
extra bedroom.
This extra bedroom will cost her 14% of
her £100 weekly Housing Benefit
meaning she will need to find £14
weekly from April.
How Much?
Mum & Dad live in this four bedroom property and
have done so for 35 years, all the family have now
left home.
Their full rent due to Home in Scotland is £100
weekly
They do not get full help with this as dad works
and earns £180 weekly, due to his low earnings
they do still get £60 weekly Housing Benefit help.
How much if anything will they lose?
They have three extra bedroom so the
maximum 25% reduction applies.
This 25% reduction is applied to their
full rent due at £100 weekly and not to
the actual Housing Benefit paid at £60
weekly.
So they will have to find £25 weekly not
the £15 you would expect?
How much?
Dad is 55 and has means tested Employment Support
Allowance
Mums only income is her old age pension and
Disability Living Allowance
They get full housing benefit at £100 weekly
For their 3 bedroom Loreburn property
They live with their 22 year old unemployed son
How much will they lose if anything?
Nothing as mum is not of
working age the bedroom tax
does not apply to them at this
time.
This will change later
How much?
Mum and dad have been foster carers to many
children all their lives.
They have a 3 bedroom DGHP property getting full
help with the £100 weekly rent via Housing Benefit
At this time they have two foster children a boy
aged 14 and a girl aged 8.
How much will they lose if anything?
Mum and dad have two foster children
Both children need their own bedroom as a boy at
14 and girl at 8 cannot share a bedroom
You would expect that mum and dad would not
lose anything a all three bedrooms are needed?
But foster children DO NOT COUNT
So a 25% reduction applies as they are deemed to
have two extra bedrooms
Mum and dad will lose 25% or £25 weekly
Discretionary Hardship Payments (DHP)
Councils have been given large increases
in DHP funding to help people effected by
the bedroom tax, always ask for this help.
This is not a long term solution.
SOCIAL FUND
Social Fund Ending
The budgeting loan scheme will remain in place for
claimants in receipt of existing benefits until they migrate to
universal credit
Community Care Grants and Crisis Loans will be abolished
from 1st April 2013
In Scotland, a 'Scottish Welfare Fund' is to be created, with
an additional £9 million being allocated
The above ‘Scottish Welfare Fund’ will be given to local
councils to administer, it is NOT ring fenced for this specific
purpose.
DISABILITY LIVING
ALLOWANCE (DLA)
CHANGES TO
PERSONAL INDEPENDENCE
PAYMENT (PIP)
DLA CHANGES & Personal Independence Payment (PIP)
What is PIP?
The personal independence payment (PIP) replaces working
age Disability Living Allowance (DLA) from 8 April 2013. The
change applies across the UK.
What are the rules for PIP?
To get the personal independence payment you must:
be age 16-64
satisfy the daily living and/or mobility activities test for 3 months
prior to claiming and be likely to continue to satisfy this test for a
period of at least 9 months after claiming.
Residence and presence tests
In order to claim personal independence normally you
must:
have been present in Great Britain for 104 weeks out of the
156 weeks before claiming (2 out of the last 3 years) and
be habitually resident
You will not be able to claim PIP once you are 65 years old but
you will be able to stay on PIP if you claimed or received it
before you reached the age of 65. (If you are over 65 you can
claim attendance allowance)
You can receive PIP whether you are in or out of work.
12.
In order to qualify for PIP you will have score a certain
number of points in relation to 12 activities.
These are:
1 Preparing food.
2 Taking nutrition.
3 Managing therapy or monitoring a health condition
4 Washing and bathing.
5 Managing toilet needs or incontinence.
6 Dressing and undressing.
7 Communicating verbally.
8 Reading and understanding signs, symbols and words.
9 Engaging with other people face to face.
10 Making budgeting decisions.
11 Planning and following journeys. (used in the test for
the mobility component)
12 Moving around. (used in the test for the mobility
component)
Each activity above has a set of descriptors.
Points are awarded for each activity that you cannot
do based on whether you fit a descriptor within those
activities.
You can score points for more than one activity but If
more than one descriptor applies in any activity you
will be awarded whichever descriptor gives you the
most points.
If you can show that a descriptor applies to you for 6
months within a 12 month period you will be awarded
the appropriate points.
How will the activities tests be applied?
In most cases you will be asked to attend a face-toface consultation with an independent healthcare
professional (HCP).
At the consultation the HCP looks at your ability to
carry out the PIP activities.
The HCP will look at your claim form and any medical
evidence from your GP or consultant, if you have one.
You will be able to take someone with you to the
consultation such as a family member or carer.
Following the consultation the HCP will advise a
benefit decision maker at the Department for Work
and Pensions who will be the one who actually
decides if you are entitled to PIP and which
component applies.
The decision maker will also decide the length of
your award and the date when it will be reviewed,
based on the likelihood of your health condition or
impairment changing.
Depending on your circumstances you may get a short award of
up to 2 years or a longer award lasting up to 5 or 10 years.
If you are given a longer award you may still be contacted,
during this time, to see if your needs have changed.
Two organisations are responsible for carrying out consultations.
Atos IT Services will carry out assessments in London, Southern
England, the North East, the North West England and Scotland
Capita Business Services Ltd will carry out assessments in
Central England, Wales and Northern Ireland
Atos will be working in partnership with the NHS, private
hospitals and national networks of locally-based health
professionals, such as physiotherapists, using their premises
and staff to undertake face-to-face consultations.
2.
How much is PIP?
The weekly amounts of PIP are:
Daily living component
standard rate – If you have a limited ability to carry
out daily living activities - £53.00
enhanced rate – If you have a severely limited ability
to carry out daily living activities - £79.15
Mobility component
standard rate – If you have a limited mobility - £21.00
enhanced rate - If you have a severely limited
mobility - £55.25
The entitlement thresholds (pass mark) for the rates
and components of the PIP are:
Daily Living component (activities 1 to 10)
Standard rate: 8 points
Enhanced rate: 12 points
Mobility component (activities 11 to12)
Standard rate: 8 points
Enhanced rate: 12 points
If you have a terminal illness (that is if you are suffering
from a progressive disease where death can be expected
within 6 months) you will automatically receive the daily
living component enhanced rate.
If you are terminally ill you only have to be present in the
UK at the date of claim with no waiting period either
You will also be able to apply for the mobility component
and receive it immediately if you qualify.
If you are in a care home you will be entitled to the mobility
component so long as you satisfy the qualifying conditions.
If you are paid PIP you are free to spend the money in the
way that suits you best.
PIP 'delivery timetable' is From 8 April 2013:
New claims for PIP will be taken in a 'controlled start area'
in the North West and part of the North East of England.
Postcodes affected are: BL, CA, CH (except CH5, CH6,
CH7 and CH8), CW, DH, DL (except DL6, DL7, DL8, DL9,
DL10 and DL11), FY, L, LA (except LA27, LA28, LA62 and
LA63), M, NE, PR, SR, TS (except TS9), WA and WN.
From June 2013:
New claims for PIP will be taken in all remaining areas of
Great Britain.
From October 2013:
Reassessment for PIP begins for existing Disability Living
Allowance (DLA) claimants reporting a change in their
condition, and the DWP will also start contacting those reaching
the end of fixed period DLA awards and young people turning
16.
From October 2015:
All remaining claimants already in receipt of a DLA award will
be invited to make a claim for PIP. DWP will randomly select
those recipients of DLA in receipt of an indefinite award or a
fixed term award, and notify them about what they need to do to
claim PIP.
DWP will prioritise DLA recipients who have turned
65 after 8 April 2013, when PIP was first
introduced.
DLA will remain in payment for all claimants until a
decision on PIP has been communicated to the
claimant.
UNIVERSAL CREDIT
Universal Credit (UC)
Universal credit is a new benefit that will be introduced from October 2013, replacing
current means-tested benefits and tax credits for working-age people.
Although it will start in April in certain controlled areas in the north of England for
single JSA claimants.
It will be paid to people in or out of work.
It’s been confirmed that, for the full October launch, UC will be the first service to use
the Identity Assurance Programme to identify claimants.
Claimants will choose which of these ‘Identity Providers’ to use and they will work
with existing online accounts to verify the identity of the person before passing them
onto DWP.
Identity Providers:
The Post Office, Cassidian, Digidentity, Experian, Ingeus, Mydex, Verizon and Paypal
October 2013 to April 2014
New claims for universal credit, to be introduced over this
period, possibly on a gradual basis by area.
No new income-based jobseeker’s allowance, income
related employment and support allowance, income
support or housing benefit claims are accepted once
universal credit has been introduced in an area.
People moving from out-of-work benefits into work
transfer onto universal credit.
April 2014
No new claims for tax credits (except for people over pension credit
qualifying age)
April 2014 to October 2017
Existing claimants transfer to universal credit.
The following benefits will be abolished and replaced by
universal credit:
· income support;
· income-based jobseeker’s allowance;
· income-related employment and support allowance;
· housing benefit;
· child tax credit and working tax credit;
· budgeting loans and crisis loan alignment payments – to be
replaced by payments on account (an advance of universal
credit) in cases of need.
Benefits other than those listed above will remain
· contribution-based jobseeker’s allowance. The earnings
rules will be aligned with universal credit;
· contributory employment and support allowance. The
earnings rules will be aligned with universal credit;
· child benefit;
· carer’s allowance;
· bereavement allowance, bereavement payment and
widowed parent’s allowance;
· maternity allowance;
· industrial injuries disablement benefit;
· statutory maternity/adoption/paternity pay;
· statutory sick pay;
· maternity grants, funeral payments and cold weather
payments – to be extended to people on universal credit
Where one member of a couple reaches the qualifying age
for pension credit and the other is of working age, they
must continue to claim universal credit until both have
reached pension credit qualifying age.
The capital rules will be the same as for income support,
with lower and upper capital limits and tariff income
assumed for capital between the limits.
This will exclude people with savings over £16,000.
How much will universal credit be?
See charts
The universal credit amounts will be at a ‘similar level of
support than the current system except:
The proposed amount for most disabled children is halved,
and
The amount for most disabled adults will be reduced due to
the abolition of disability premiums.
All claimants must accept a ‘claimant commitment’ as a
condition of receiving universal credit. They will then be
placed into one of the four following groups:
A. Claimants subject to no work-related requirements:
people with limited capability for work-related activity
because of health or disability – ie, those in the support
group for employment and support allowance;
lone parents or the lead carer in a couple with a child under
one;
carers with regular and substantial caring responsibilities
for a severely disabled person.
B. Claimants subject to the work-focused interview
requirement only:
lone parents or the lead carer in a couple with a child over one
but below the age of five
lone foster carers or the lead carer in a fostering couple, with a
foster child under the age of 16 This group will be expected to
attend periodic interviews to discuss their plans for returning to
the labour market.
C. Claimants subject to the work preparation requirement:
people with limited capability for work because of health or
disability – ie, those in the work-related activity group for ESA;
This group will be expected to take reasonable steps to prepare
for work, such as attending a skills assessment, improving
personal presentation, participating in training or an employment
programme, and undertaking work experience or a work
placement.
D. Claimants subject to all work-related requirements:
everyone else - the default for claimants including lone parents
and couples with children over the age of five.
This group will be subject to a work search requirement
(including making applications and registering with employment
agencies) and a work availability requirement (subject to
limitations to be prescribed), as they would under jobseeker’s
allowance.
Other qualifying conditions for each group may be prescribed.
Each adult in a household will be placed into her/his own
conditionality group depending on her/his individual situation.
There will be a new concept of ‘in-work conditionality ’ where
working claimants are required to look for more work unless they
are earning at least the minimum wage x 35 hours a week (or
less if reduced availability for work has been agreed)
Payments will change from the current fortnightly payments
to monthly payments in arrears, paid directly by the DWP
into a claimant’s bank account, this will also include
amounts for rent.
There will be provision to pay amounts differently if it
appears necessary to protect the interests of the claimant,
partner to child.
Claims will normally be made online with alternative access
kept to a minimum. Subsequent contact will also be online,
including claimants having access to an online account with
details of their award and a facility for reporting changes of
circumstances.
BENEFIT CAP
Benefit Cap
From April 2013 a cap will be introduced on the
total amount of benefit that working age people
can receive, pilot starts in London.
This will mean that workless households should no
longer receive more in benefits than the average
earnings of working households.
The cap will be administered jointly by DWP and
local authorities through deductions from Housing
Benefit payments. In the longer term it will form
part of the new Universal Credit system.
What is the benefit cap?
The benefit cap will mean that working age people can't
receive more than a set amount in benefits, even if they
would otherwise be entitled.
The cap will be set at the average net earned income of
working households.
This is estimated currently to be £350 per week for a single
adult with no children and £500 per week for a couple or
lone parent.
How will the cap be applied?
When the cap is brought in it will be applied via the
Housing Benefit system, so will be administered by Local
Authorities.
This means the effect of applying the cap will depend
entirely on a household's Housing Benefit entitlement.
A household receiving enough Housing Benefit to
apply the cap in full:
If a household is £50 per week above the benefit cap level,
after income from all appropriate benefits are added
together, their Housing Benefit award will be reduced by
£50 per week to bring them within the benefit cap.
A household not receiving enough Housing Benefit to
apply the cap in full:
If a household is £50 per week above the benefit cap level,
but receive less than £50 per week in Housing Benefit, their
Housing Benefit award will be reduced until just 50p
remains.
This means the household could still receive income from
benefits which is higher than the benefit cap level.
A household receiving no Housing Benefit:
Some households may receive no Housing Benefit but still
exceed the benefit cap level. These households will
not have their benefit income reduced as the cap cannot be
applied.
Once Universal Credit is brought in (October 2013 pilot
starts) the benefit cap will be applied by restricting the
Universal Credit payment.
This will enable all households affected to be capped in full.
Broadly, the cap will affect large families with several
children who are potentially in receipt of higher than
average amounts of Child Tax Credit and are more likely to
live in larger homes meaning more Housing Benefit.
It is estimated that 27% of households affected will have 5
or more children. 69% will have 3 or more children.
However, smaller households may still be affected if they
live in high rent areas and are therefore receiving larger
amounts in Housing Benefit.
Which benefits are included in the cap?
Add together your income from the following benefits:
Bereavement Allowance
Carer's Allowance
Child Benefit,
Child Tax Credit,
Employment Support Allowance (except support group)
Guardian's Allowance
Housing Benefit (HB)
Income Support
Industrial Injuries Disablement Benefit (except when getting
Constant Attendance Allowance) Jobseeker's Allowance
Maternity Allowance
Reduced Earnings Allowance
Severe Disablement Allowance
Universal Credit
Widowed Parent's Allowance
Households that aren't affected by the cap?
The cap won’t apply to households where a partner or any
dependant child qualify for Working Tax Credit or receive
any of the following:
Disability Living Allowance
Personal Independence Payment
Attendance Allowance
Constant Attendance Allowance
Employment Support Allowance with support component
Armed Forces Compensation Scheme payments
War Pension Scheme payments (including War
Widow’s/Widower’s Pension and War disablement
Pension).
Or
If you become unemployed after being employed for 12
months continuously prior to claiming benefits, and you lost
their job through no fault of your own.
In this case the household receives 9 months protection
from cap.
To date there is no current definition for what constitutes
employment.