Children’s Partnership Board 12th May 2016 Welfare Reforms

The Welfare Reform Act 2012 introduced a wide range of reforms to the benefit system – some of which were implemented in April 2013 The Act legislated for the biggest change to the welfare system for over 60 years. It introduced a wide range of reforms with a purpose to make the Benefits and tax credits systems fairer and simpler by: –creating the right incentives to get more people into work –protecting the most vulnerable in our society –delivering fairness to those claiming benefit and to the taxpayer. The changes have had implications in Essex for People, place and services, although the implementation of some changes has been incremental

Timeline of changes 3

Welfare Reform Project Set up to ensure that ECC is in a position to understand and react to the changes bought in by the welfare reforms. Data Analysis and The Essex Bulletin : This bulletin provides a high level position statement on the known potential impacts of welfare reform across people, place and services. This has developed as the changes have been implemented and data is made available Raising awareness : working with other authorities and partnership groups including the LGA and ACCE to understand impacts, allow the sharing of data and provide a coordinated response. Communication : ensuring that key messages are communicated through the creation of materials and stakeholder engagement

Key Welfare Changes for Families A Summary Universal Credit Benefit Cap Size Criteria Tax Credits Social Fund 06/07/2016 5

Universal Credit For those of working age – in or out of work Aimed at simplification of the system – one single benefit Replacing: - Income-based Jobseeker’s Allowance - Income-related Employment and Support Allowance - Income Support - Working Tax Credit (including help with childcare costs) - Child Tax Credit - Housing Benefit 06/07/2016 6

Universal Credit : key features  A single, monthly payment - designed to mirror salaries  claimant commitments with new sanctions for fraud and error  childcare costs included for working a few hours a week  housing costs (mortgage interest payment) if 0 hours of paid work  claims and claim management will be digital by default  centrally and remotely managed 06/07/2016 7

Universal Credit in Essex 06/07/ DistrictUniversal Credit go live date (New Claims) Basildon Implemented 16 March 2015 BrentwoodImplemented 16 March 2015 ColchesterImplemented 16 March 2015 TendringImplemented April 2015 Castle PointImplemented Between May 2015 and July 2015 BraintreeImplemented Between September 2015 and November 2015 UttlesfordImplemented Between September 2015 and November 2015 ChelmsfordImplemented Between September 2015 and November 2015 MaldonImplemented Between September 2015 and November 2015 Epping ForestImplemented Between December 2015 and April 2016 HarlowImplemented Between December 2015 and April 2016 RochfordImplemented Between December 2015 and April 2016

Claims in Essex 9 MonthFebruary 2016 (r)March 2016 (p) Employment indicatorNot in employmentIn employmentTotalNot in employmentIn employmentTotal Basildon and Billericay Braintree Brentwood and Ongar Castle Point Chelmsford Colchester Epping Forest Harlow Maldon Rochford and Southend East Thurrock

Universal Credit: Potential implications Payment - budgeting and financial skills - division of household finance - Direct Payments - Processing times Claimant commitment - in - work conditionality - sanctions Digital by default - access to computers and internet 06/07/

Benefits Cap For working age families and single claimants The total benefit income is ‘capped’ at £500 per week for families or £350 for individuals. Includes Housing Benefit –Child Benefit, –Carer’s Allowance (removed from Autumn 2016) –Income Support Child Tax Credit and most other benefits Further proposed reductions in Autumn

Benefits Cap in Essex 12 Basildon251 Braintree85 Brentwood31 Castle Point99 Chelmsford103 Colchester133 Epping Forest124 Harlow111 Maldon24 Rochford59 Tendring242 Uttlesford23 TOTAL1285 Numbers affected across Essex via DWP statistic as at February families affected with 3 or more children 40 households losing between £400 and £600 per month 77 households between £200 and £400 per month

Benefits Cap: potential implications Payment - Reduced weekly income - Larger families impacted more - Use of Discretionary housing payments - Increased use of payday loans Claimant support - Assistance in finding work - Budgeting support 13

Size Criteria – Under Occupancy For tenants of working-age living in social sector housing who claim housing benefit. Claimants will have to meet the first 14% of their rent with 1 spare bedroom Claimants will have to meet the first 25% of their rent without housing benefit with 2 spare rooms 6% of Essex caseloads affected by legislation (5336) 06/07/

Size Criteria – removal of spare room subsidy in Essex (as of November 2015) All HB claimants Spare Room Subsidy Reduction Not applicable (private housing)Not applied Applied number average HB reduction amount per Week Basildon13,1273,0108,8501, Braintree8,4692,2085, Brentwood2, , Castle Point4,4452,7861, Chelmsford8,4872,1745, Colchester11,0303,8106, Epping Forest6,6201,7964, Harlow7,9071,5075, Maldon2, , Rochford3,3181,3171, Tendring12,2918,0413, Uttlesford3, , Total84,72629,13450,2425,

Size Criteria: potential implications Reduced weekly income Potential for increased arrears Currently the primary use of Discretionary housing payments Resettlement and Migration Carer support impacted (currently under review) 16

Tax Credit and Housing Benefit Changes No change to Tax Credit taper rates and threshold Restriction on support for larger families from 2017 Equivalent changes will also be introduced to Housing Benefit (HB) removing the family element for those starting a family after April The equivalent in UC will also not be available for new claims after April The extra premium added to Housing Benefit for families (family premium) will be withdrawn for new claims from April /07/

Crisis Loans and Community Care Grants – Introduction of Essential Living Fund Support scheme for those in an emergency situation Supporting resettlement into a community Provision of Food, Fuel and Furniture Delivered through the local community Currently funded until April awards (25% of total awards) have been to families with children and 681 of these families had at least 1 child under awards to those with children under 5 included a food element. 06/07/

Essex County Council 19 Customer presents with need and contacts the assessment team (Within Southend Borough Council ) Assessment of need and eligibility checks carried out. Decision on award type and amount. For awards of utility payment and food, an all pay prepaid card is credited and made available at a distribution site for customer collection. All other awards are passed on to the ECC delivery function provided by Colchester CVS. Colchester CVS distributes award info to relevant partner. Customer receives support in form of advice, Furniture and white good, food parcels and other essential living items The ELF Process

Future proposed changes 2016/17 Changes to Tax Credits Further personal independence payment Rollout Further Universal Credit rollout Potential Benefit Cap reduction 20

What are we and districts doing to mitigate? Identification and support to those affected Use of Discretionary Housing Payments Ensuring links to Commissioning activity Informing Partners, departments and government bodies Lobbying 21

Considerations and Risks Removal of ELF scheme. Reductions and demand in DHP 4 years Benefits freeze Are we building the right housing? Are districts looking at further benefit cap reduction support? 22