Welfare reform October 2012

Welfare reform The Welfare Reform Act 2012 has introduced changes to the benefits system. This presentation will consider when these changes will come into force. Some of the timetable is unclear but is more likely to slip than be brought forward. The benefits / changes we will consider are: benefit cap under-occupancy penalty discretionary social fund replacement council tax benefit replacement personal independence payment (PIP) universal credit.

Benefit cap Benefits cap of £500 per week for a couple / lone parent and £350 for a single person (not if in receipt of DLA, WTC or war pension). Comes into force April ‘Excess’ will be deducted from housing benefit. Letters were sent in May / June 2012 to those affected. In Scotland, approximately 3,000 households will be affected.

Under-occupancy penalty Working age claimants living in social housing will have their housing benefit reduced if they are considered to be ‘under- occupying’ their home 14% deduction for under-occupying by one bedroom, 25% for under-occupying two or more bedrooms Children will be expected to share a bedroom if: – under 16 and the same gender – under 10 regardless of gender DWP impact assessment suggests that 80,000 people in Scotland (30% working age claimants) will be affected and lose on average £12 per week.

Under-occupancy: timetable In force from April 2013 DWP advice to local authorities suggests that letters should be sent to those who may be affected in September / October 2012 A second letter should be sent with a notification of the housing benefit award in April 2013.

Discretionary social fund Community care grants and crisis loans for living expenses will be abolished from April Scottish Government are developing successor arrangements with Local Authorities – working title ‘Scottish Community Support Fund’ to start in April Scottish Government owns the guidance and local authorities will have their own delivery arrangements. These interim arrangements will be reviewed after a year and then permanent arrangements will be put in place from April 2015.

Council tax benefit replacement Council tax benefit will be abolished from April 2013 and the successor will be determined locally (Scotland) with a 10% reduction in funds. April 2013–14, Scottish Government and COSLA are making up the 10% shortfall, therefore only small changes to council tax benefit rules for Scotland. April 2014–15, changes will need to be implemented to take account of the shortfall and to introduce rules to include Universal Credit. As yet, no detail available of how / what will be introduced.

Questions

Personal independence payment Personal independence payment (PIP) replaces DLA for people over 16 and under 65. PIP has two components: – daily living – mobility Each component will be paid at one of two rates: – standard – enhanced A claimant must have had the condition for three months and expect to have it for at least a further nine months.

Assessment of PIP The assessment will be made against a number of criteria, based on a range of activities. A point score will be allocated to the claimant based on their ability to do these activities. This point score will determine whether they receive a PIP award and at what level. Initial questionnaire Provide supporting evidence Face-to-face consultation with a health professional Award decision made by decision maker in DWP

Activities assessed against * Daily livingMobility Preparing food and drink Taking nutrition Managing therapy or monitoring a health condition Bathing and grooming Managing toilet needs or incontinence Dressing and undressing Communicating Engaging socially Making financial decisions Planning and following a journey Moving around * from 2 nd draft; final draft due Autumn 2012

Timeline for introduction of PIP April 2013: pilot for new claimants in N. England June 2013: all new claimants nationwide October 2013: existing claimants who report a change of circumstance or come to end of fixed term award October 2013: 30,000 existing DLA claimants invited to claim PIP to test systems January 2014: full national re- assessment; letters to claimants inviting them to claim PIP

Existing DLA claimants INVITATION claimants invited to claim PIP award stopped claimants sent initial letters

Existing DLA claimants claimants sent initial letters February 2013 Initial letters, informing existing claimants about PIP and the assessment process, will be sent out

Existing DLA claimants claimants invited to claim PIP October 2013 – 2016 Existing DLA claimants will be sent letters inviting them to apply for PIP and explaining the assessment process. If apply within four weeks, will continue to receive DLA until PIP assessment complete. If don’t apply within four weeks, DLA will be suspended (re-instated if apply in next four weeks, until PIP assessment complete). If don’t apply within eight weeks of letter, DLA stopped. INVITATION

Existing DLA claimants award stopped Upon completion of assessment Once PIP assessment is complete, the DLA award will stop whether or not a PIP award is made

Some concerns with PIP DWP figures state that they expect the PIP working age case load will be 500,000 lower than for DLA by 2016 in UK. Impact Scotland believe that 75,000 of the 225,000 existing DLA claimants will be refused entitlement to PIP. Assessment process is similar to the process for ESA, which has had a number of issues, and resulted in large numbers of appeals. Short-term awards and a more regular review process will place added stress on those with long-term and / or fluctuating conditions.

Questions

Universal credit The means-tested benefit for people of working age (in most cases, from 18 years to pension credit age). Will include help with housing costs and the care of children. Replaces: – income support – income-based JSA – income-related ESA – child tax credit – working tax credit – housing benefit. Paid monthly in most cases.

Maximum universal credit standard allowance (single / couple) child element and disabled child element childcare element limited capability for work-related activity element or limited capability for work element carer element housing element (rent or mortgage interest)

Claimant commitment All claimants will be placed in one of four conditionality groups based on individual circumstances. The commitment will be based on the conditionality group for the claimant. All claimants (each individual in these case of a couple) will have to agree to a claimant commitment. Conditionality groups are: – no work-related requirement – work-focused interview – work preparation – all work-related requirements.

Sanctions Breaches of the claimant commitment will result in sanctions. Sanctions will vary depending on which conditionality group a claimant is in. Most severe sanctions will only be for those in the all work- related requirements group (those expected to seek work, additional work or better-paid work). Repeated breaches will result in harsher sanctions. Sanction for a third failure to take up work could be as much as 1,095 days.

Safeguards and hardship payments Claimants will not be sanctioned if they can demonstrate ‘good reason’ for a failure. Claimants with limited capability for work, mental health conditions or a learning disability will be contacted for a discussion prior to a sanction being imposed. Hardship payments are available to protect those unable to meet basic and essential needs (accommodation, heating, food and hygiene) of the claimant or a child. Hardship payments may be paid at 60% of the amount sanctioned until the next UC payment is due if claimant meets conditionality.

Universal credit: new claimants New jobseekers claim UC, starting with one DWP district in Scotland. Additional districts will be added one at a time, possibly monthly. New claimants who: are in low paid work have limited capability for work are carers are lone parents with a child under five will claim UC. October 2013 Early 2014

Universal credit: existing claimants From April 2014, existing claimants of i-b JSA, i-r ESA, IS, WTC and HB will transfer to universal credit, probably in the following order: those with significant changes of circumstance those who will benefit most from the transfer to UC jobseekers based on local authority area. All claimants will have been transferred to UC. April 2014 October 2017

Some implications of UC On-line claim and management of the account for those without access to or skills for on-line activity may prove problematic. Monthly payment may make budgeting more difficult for some claimants, including housing costs paid directly to claimant. Some disability premiums in old system not part of universal credit, so some disabled claimants would be worse off. Disabled child element will be less than the old equivalent. Conditionality and harsh sanctions may cause hardship.

Questions

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