Richard Exell and Nicola Smith TUC Welfare cuts Richard Exell and Nicola Smith TUC

Where is welfare spent? UK TCs and child benefit and GB for other benefits, all for 2009/10

Children and families

Tax Credits: current position for sample family Sample family: Couple household, one member working 30+ hours and one 16 hours, two children in childcare (one baby) Maximum award: around £19,000 (salary dependent) Working Tax Credit Basic element: £1,920 Couple element: £1,890 30 hour element: £790 Childcare: £12,480 Child Tax Credit Family element: £545 Child element: £4,600 Baby element: £545

Tax Credits: Budget and CSR changes (sample family - high childcare costs)

Lost awards by household (sample family - high childcare costs)

Tax Credits: additional changes Tax Credits for families Cancel introduction of supplement for toddlers (planned for 2012/13) Reduce income disregard to £5,000 from 2013/14 (presumption that real time information will overcome problem of over payment?) Reduce backdating to one month from 2012/13 (‘real time’ system not scheduled until 2014/15) Increase working hours requirements from 16 hours to 24 hours for couple households (far from encouraging small amounts of work, this makes it harder for work to pay for low income couples – and where do the savings come from?) Wider benefit changes for families Child Trust Fund abolition (including cuts for disabled children this year) Child Benefit freeze Child Benefit cut for households with a higher rate taxpayer Health in Pregnancy Grant abolition Sure Start Maternity Grant abolished for all but first child Lone parent conditionality for those with children aged 5 and above from October 2011

Households receiving Housing Benefit

Cumulative impact is key Budget Move to set Local Housing Allowance at 30th percentile of local rents and index to CPI Increase deductions for non-dependents Limit social sector entitlements to family size Cut entitlements by 10 per cent for those who have spent a year on JSA Cap maximum rates and maximum property size (4 bedrooms) Remove £15 excess payment CSR Benefit cap (to be administered by local authorities reducing Housing Benefit) Shared room rate to apply to those aged 25-34 (as well as to young people) Social rents to rise (who will pay for this – Housing Benefit?) Council Tax Benefit to be cut by 10 per cent and ‘localised’ – requiring local authorities to collect outstanding CTB from their most vulnerable residents

Unintended losers? Working households who receive state help with Housing Benefit Hostels and refuges where incomes fall as a result of Housing Benefit cuts Homeless ex-offenders and those with severe mental health problems who cannot be accommodated in shared housing Young children who have to move schools Households who simply cannot find anywhere to live Households who can no longer afford to work

Disabled people

Already announced in the Budget “Objective medical assessments” for Disability Living Allowance This week’s changes One-year time limit for people who receive contributory Employment and Support Allowance and are in the Work-Related Activity Group Removing the mobility component of Disability Living Allowance from people in residential care

Who loses out from the ESA change People with employed partners. People with other income. People with savings totalling over £16,000.  People who are entitled to Pension Credit.

Older people

Already announced in the Budget Removal of 50+ Tax Credit element This week’s changes Savings Credit - freezing maximum award 2011 – 2014. Raising of the pension age to 66 by 2020.

Additional welfare changes

Already announced in the Budget: Changing the way benefits are uprated CPI (%) RPI (%) 2000 1 3.3 2001 1.3 1.7 2002 2003 1.4 2.8 2004 1.1 3.1 2005 2.5 2.7 2006 2.4 3.6 2007 1.8 3.9 2008 5.2 5 2009 -1.4

What this would have meant over the past 10 years

This week’s changes Abolition of Educational Maintenance Allowances - to be “replaced” by “locally managed discretionary funds to target support.” “Real time information”

And Don’t forget VAT! Quintile VAT as a proportion of gross income Poorest 9.6% Second 7.3% Third 6.1% Fourth 5.7% Richest 4.4%

The Chancellor and Fraud “We estimate that £5 billion is being lost this way each year” DWP estimates: “overpayments due to fraud and error” in 2009-10 - £3.1 billion £1.1 billion due to official error £1.1 billion due to customer error Amount of fraud overpayments is £1 billion