Welfare Reform David Gray Welfare Rights Manager Peter McCann Head of Revenues and Benefits and Customer Services

Overview of presentation 1) Welfare agenda Dave 2) Changes from April Peter 3) Longer term changes Dave

Welfare Reform Act 2012 Royal Assent 8/3/12 Biggest Change to welfare system in 60 years Stated intentions of Government – Make work pay - Protect the vulnerable - Fair to tax payers - Fair to benefit claimants

Expenditure savings

Measures Universal Credit Housing Benefit Reform Abolition of Council Tax Benefit Personal Independence Payments (PIP) Employment Support Allowance Enhanced benefit sanctions

1. Bedroom Tax 2. Discretionary Support Scheme 3 1. Bedroom Tax 2. Discretionary Support Scheme 3. Council Tax Reduction Scheme 4. Discretionary Housing Payments 5. Benefits Cap 6. Council Tax Empty Property Charge Introduction

Bedroom Tax

Bedroom Tax One bedroom calculated for each of the following: A single claimant or every adult couple Any single adult aged 16 or over Any two children under age 10 Any two children of the same sex aged up to 15 Any other child (other than a foster child or child whose main residence is elsewhere) A non-resident overnight carer

Housing Benefit – Bedroom Tax Housing Benefit is reduced by making a reduction to eligible rent 14% one room (2,000) 25% two rooms (600) 2,600 households affected Total Housing Benefit reduction is £1.8m

Housing Benefit – Bedroom Tax Exemptions: Temporary accommodation Supported accommodation Claimant or partner qualifies for state pension credit Protections: Recent bereavement – 12 months New claim – 13 weeks

What is Halton BC doing? Supplied lists to RSLs of households affected December 2012 - Council wrote to claimants informing of under occupancy Number of bedrooms & household composition Amount of Housing Benefit reduction Claimants requested to inform HBC if household composition is incorrect Over night care cases identified Disabled adaptations identified

Non Dependants Where are they?

Discretionary Support Scheme

From April 2013 the Discretionary Social Fund will end From April Halton Council has a new scheme which may or may not be able to help you Not a like for like replacement

Background As a result of the Welfare Reform Bill, the national Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013 Crisis Loans for general living expenses and Community Care Grants will be replaced by new local assistance schemes to be administered by Local Authorities Expected that the grant to LAs will be based on the equivalent social fund spend 2012-13 (£178m) But Halton £100k down on 2011/2012! Will be non-ring fenced No new statutory duties to provide local scheme

Locally designed & administered provision Changes to the Social Fund Scheme from April 2013 Regulated scheme Sure Start Maternity Grants Funeral Payments Cold Weather Payments Winter Fuel Payments Discretionary scheme Budgeting Loans Crisis Loans -Alignment Payment -General living expenses Community Care Grants Remains with DWP Locally designed & administered provision

Awards 2011/12

No cash Freephone number List of considerations reduced Online applications for support in community

Key Message Discretionary Social Fund now no longer exists Halton Council may be able to help you

Council Tax Support Scheme (Abolition of Council Tax Benefit from April 2013)

Current Position Expenditure: Housing Benefit £52m Council Tax Benefit £11m Caseload: Housing Benefit 13,014 Council Tax Benefit 15,305

Current Council Tax Benefit Scheme Council Tax Benefit caseload & expenditure Caseload CTB Expenditure Pensioners:   Passported 4,338 £3.45m Non passported 2,085 £1.24m 6,423 £4.69m Working Age: 6,435 £4.94m 2,447 £1.48m 8,882 £6.42m Total 15,305 £11.11m

Current Position Demand led Funding- Councils are reimbursed 100% of the full amount of Council Tax Benefit paid out correctly From April 2013 Council Tax Benefit will be abolished and replaced by a locally designed scheme

A Local Scheme - BUT….. New local scheme should: But: Protect pensioners ( 41% of Halton’s benefit caseload are pensioners) Take into account vulnerable groups – responsibilities regarding child poverty, the disabled, homelessness and equalities Incentivise people to work But: There will be a 10% reduction in funding (equates to £1.4m in Halton) The pensioner protection increases the burden to around 18% for working age claimants Any expenditure above the cash specific sum must be met pound for pound by LA The more people protected the higher the burden

The Scheme Reduction in non pensioner benefit of a % amount to be deducted at the end of the calculation The % amount to be determined by Members each year once the grant details have been received For 2013/2014 it will be 21.55%

The Scheme The % reduction ensures that the cut is shared equally Retaining present system ensures the in-built protection for various groups is maintained Small sums will be billed ( poll tax) Average between £2 & £4 per week People billed for the first time

General Issues Increased cost of recovery Small amounts soon become big Difficulty in gauging future demand & subsequent financial impact 3 schemes will be operating Confusion Have written to 9,000 households at the start of the year

Key Message Don’t ignore the Council Tax Bill Get in touch with the Council

Benefits Cap

Benefit Cap As part of the Welfare Reform Bill, a cap on the maximum amount working- age households can claim in benefits will be introduced from April 2013 (now summer 2013) This is to prevent claimants receiving more income from benefits than the average wage paid to those who are working. The cap is set at £26k per annum (£500 per week for households with children or £350 per week for single claimants without children). Some benefits are excluded such as Working Tax Credits and Disability Living Allowance. Department for Work and Pensions (DWP) have written to all households that they think may be affected. DWP have identified 104 households in Halton that may be effected (have incomes of between £26k and £46k). DWP have wrongly identified some clients as being effected.

Benefit Cap Until the implementation of Universal Credit, the cap will be applied to Housing Benefit Owner Occupiers will not be effected until transfer to Universal Credit Claimants likely to see it as a reduction in Housing Benefit rather than a reduction in overall benefits Have written to 100 people

Discretionary Housing Payments

Discretionary Housing Payments Amount increased from £87k to £282k Bedroom Tax alone is £1.8m shortfall Publicity states that this will be the safeguard!

Council Tax

Council Tax Changes to charges for Empty Properties Change to charges for Second Homes Everyone currently receiving exemptions have been notified

Final Message Impact on individuals - Social Fund/Bedroom Tax/ CTRS – which do I pay? Impact on Halton’s wider community- (less money in economy) Collection issues for Council/RSLs Confusion & uncertainties for everyone as Government amends legislation ‘It won’t affect me’ syndrome - £100m reinforces this Capacity issues of Council as its all in one area Get in touch

Current System Reformed System Income related JSA Income related ESA Income Support (inc SMI) Working Tax Credits Child Tax Credits Housing Benefit Universal Credit Disability Living Allowance Personal Independence Payment Pension Credit, Child Benefit, Carer’s Allowance (will remain) Council Tax Benefit ( to be replaced) Contributory JSA and ESA ( now has 52 week limit)

Universal Credit Single means tested benefit Payable in or out of work Initially for new claimants- stock transfer to follow Oct 2013 for new claims, April 2014 to start transfer ( by Oct 2017) Transitional Protection Pilots being undertaken Digital agenda

Universal Credit

Universal Credit – Risks/Impacts Universal Credit will be paid directly to the customer. Customer will need a bank account. (preferably one that will accept Direct Debits for rent payments.) Will be paid monthly in arrears and to one person if part of a couple. As yet still no definition of ‘vulnerable’ for payment to go to landlord. Potential substantial risk for increase in rent arrears DWP have said they will be putting measures in place if this has an adverse effect on the family –don’t know what yet?

Personal Independence Payment (PIP). Replaces DLA for new claimants of working age from April 2013 -10,600 benefit claimants in Halton on DLA Points based Many currently entitled to DLA would not get PIP Intention is to save money Disproportionate effect on Halton North West pilot

PIP

Wider Reforms Tax Credits Eligibility criteria made harsher Employment Support Allowance Existing Incapacity claimants to be assessed against harder criteria for ESA. Substantial proportion move onto Job Seekers Allowance Child Benefit Reform Restrictions for Higher Rate Taxpayers

The Biggest Impacts The Benefit Cap Summer 2013 Council Tax Reduction Scheme April 2013 DLA/PIP April 2013 Universal Credit –October 2013 -2017 Incapacity Benefits migrating to ESA 2011-2014 Non Dependant Deductions increased from 2011 -2014 The Bedroom Tax - Under occupation April 2013 Introduction 5 Welfare Reforms happening in 2013 (4 in April) Emphasis on Under occupancy – explanation on the next slide.

Summary of Welfare Reform A lot covered very briefly and very complex Deserves more detail Full detail of changes not yet available Intentions – saving money - less generous to benefit claimants Help available through Welfare Rights Service (tel: 0151 511 8930)