A fresh approach to people, homes and communities Berneslai Homes Customer Panel 5 th September 2012 Welcome Mark McGee Director of Housing Management

A fresh approach to people, homes and communities Welfare Reform Barnsley Council’s Welfare Rights and Community Liaison Service will share with you some of the changes to the welfare system and how the changes may affect you. It’s complicated… It’s still changing… We’re planning for the impact…

A fresh approach to people, homes and communities Welfare Reform You can ask questions (general ones from the floor or personal questions at the end). We don’t have all the answers yet! But it’s happening so we’re not here to debate it!

Tonight's panel Welfare Reform Pete Francis Head of welfare rights and community liaison BMBC

Welfare Reform Agenda Government’s policy agenda: –to reduce welfare bill –to improve work incentives by ‘making work pay’ –to reduce welfare dependency –to reduce complexity Major reform planned via Universal Credit (integration of means-tested working age benefits and tax credits from late 2013). £18bn package of welfare cuts planned Some introduced by Welfare Reform Act, some without need for legislation

Changes to Housing Benefit From April 2011 Local Housing Allowance (LHA) rates capped. LHA rates set at the 30th percentile of local rents (instead of the current 50th percentile). Maximum LHA rate reduced from five to four bedrooms. £15 excess payment withdrawn. Non-dependant deductions increase by 27 per cent for all claimants from April 2011.

Cuts affecting families Child benefit frozen for three years Child benefit will be withdrawn from families with a higher rate taxpayer from January 2013 £190 Health in pregnancy grant withdrawn from 2011 £500 Sure Start maternity grant withdrawn from 2013 Tax credits childcare costs reduced from 80% to 70% (Apr 2011) To receive WTC, couples with children must work 24 hrs (instead of 16) between them, and one must work at least 16 hrs, (April 2012)

Main changes in Welfare Reform Act Universal Credit to integrate means-tested working age benefits and tax credits DLA replaced with Personal Independence Payment-PIP Cap placed on total household benefits received Uprating of benefits and tax credits by CPI Contribution-based ESA for those in work-related activity group limited to 12 months

Changes continued…. ESA cut for young people who haven’t paid NI HB cuts where social housing tenants are under- occupying (only working age) Changes to discretionary social fund payments Council Tax Benefit replaced with local discount scheme (only working age)

Changes to up rating Move to CPI (Consumer Prices Index) for up- rating of benefits, tax credits and public sector pensions. Local Housing Allowance rates to be uprated by CPI rather than reflecting local rents

Concerns…… Real cut in value of benefits accumulates over time. LHA rates will no longer keep pace with local rents because CPI rises more slowly than private rents. This will lead to gradual erosion of LHA rates, resulting in difficulties finding affordable accommodation, debt and homelessness.

Universal Credit UC will be paid to people both in and out of work replacing the following benefits : –Income based JSA and ESA, Income Support, Housing Benefit, Council Tax Benefit, Child Tax Credit, W Tax Credit –UC combines working age benefits and tax credits into one household allowance - “personal allowance”

Payment levels Full allowance if household has no other income and up to £6,000 of savings. A percentage of allowance if savings between £6,000 & £16,000. No allowance for those with savings over £16,000. –Households to be entitled to varying earnings disregards –Single taper set at 65%

Cap placed on total benefits Applies to out-of-work households Based on average wage of in-work households - £500 per week for couples and lone parents, and £350 per week single people.

Concerns… Doesn’t consider household size, circumstances or variations in housing costs regionally Definition of “out of work” i.e. hours threshold? Comparison with national “average income” Impact of cap on housing benefit

Amounts & Tapers Universal Credit applicable amounts have yet to be finalised and regulations still to be released but entitlement is expected to be similar to today’s figures. Awards of universal credit will be calculated by adding up all the allowances applicable to the claimant and their family and then deducting amounts in respect of earnings, other income and capital. The taper was expected to be 55p in the pound but pressure from the Treasury has resulted in the proposed taper being increased to 65p in the pound. (Current – working tax credit 41p)

Conditionality Tougher conditionality is being introduced for all claims. Will include partners of claimants in a joint claim For the first time, conditions will be applied to current housing benefit and tax credit claimants covering topics such as –Work focused interviews –Work preparation –Work search –Work availability

Sanctions Severity of sanctions in current system will increase. Penalties will vary, with two main levels of sanctions. –Higher : can be imposed for periods up to three years –Other : can be imposed for periods up to 26 weeks

Sanctions continued…. Hardship payments will be available for sanctioned recipients in need, but it is proposed these are loans and they are recoverable (paid back from benefits). £50 civil penalty if failure to report a change in circumstances (For Barnsley there were 88,576 notifications of changes in 2010/11)

Personal Independence Payment (PIP) DLA replaced by a Personal Independence Payment (PIP) from Aim is to save 20% of current DLA budget – 500,000 under threat of losing the benefit (For Barnsley expected annual reduction is min £14.5 million) Mobility and daily living component - each with two rates Qualifying time six months

PIP continued No automatic entitlement for certain conditions but existing rules apply for terminally ill Assessment -advice from independent health care professional -consider aids and adaptations All awards subject to periodic review Penalty for failure to notify changes in circumstances

Concerns with PIP DLA reform process led by a decision to cut cost of working age disability benefits by 20 per cent. Will lead to greater social exclusion for some disabled people Less people will be eligible for the benefit, meaning some people who need this support will no longer qualify Six month qualifying period too long for those who fall suddenly ill or have an accident and need immediate support or have high care needs while undergoing treatment e.g. (non terminal) cancer patients

Concerns with PIP The main aim of any assessment process should be satisfactory outcome, not necessarily ‘independence’ Alternative routes to ‘pass porting’ must be offered for people with a disability who would previously have been entitled to DLA, but who - under PIP - will no longer be entitled

Contribution based ESA Contributions based ESA will be limited to 12 months for those in the work-related activity group. Withdrawal of ESA from young people who have not accrued NI contributions.

Concerns Destroys the principle that those who have paid National Insurance Contributions (NIC’s) will be protected if they become sick. Will badly affect sick and disabled young/single people with some savings or other income, and couples with similar savings or in which one partner works. Undermines the intention to support people with disabilities to live independent lives.

Housing Benefit &under- occupancy HB entitlement will be restricted for working-age households living in social housing accommodation considered to be too large for their needs, rather than being based on the actual rent of their home. This will apply to new and existing tenants from Currently Berneslai Homes estimates that: – 2,220 households are under-occupying by 1 bedroom and could face HB shortfall of £12 per week –750 Households under-occupying by 2 bedrooms with HB shortfall £24 per week

Concerns for Barnsley Under-occupying households will face a shortfall between their HB and their rent. DWP impact assessment shows disabled and ethnic minority households particularly affected

Concerns continued… Even if they are prepared to move, it won’t be possible for everyone to transfer to a property of the right size. –Berneslai Homes stats show there is a surplus of 3 bed properties and a shortage of 1 or 2 beds properties. Many families may have to turn to private sector

Other HB changes (for those of working age) No longer paid directly to social housing landlord will go direct to tenant (as current LHA) UC to be paid monthly (not fortnightly as at present) – budgeting and money management issues & concerns rent arrears will increase Berneslai Homes predict increased transaction costs (more people paying rent)

Council Tax Benefit Council Tax benefit to be replaced with a Local Discount Scheme with Local Authorities only receiving 90% of the amount currently allocated to Council Tax Benefit to fund it, making a saving of 10% to Govt. BMBC estimates the 10% reduction equates to a cut of £1.9 million annually to the Council, with a subsequent “knock-on” effect for people claiming the benefit.

Council tax continued… Government wishes pensioners and other vulnerable adults /families to be protected from the effects of this cut. This means that the 10% financial savings will have to be found from working age claimants only, resulting in cuts of 20% to 30% from their existing awards.

Finally….. Estimated that the DLA, HB, CTB and IB measures alone will result in a reduction of £33 million per year for Barnsley residents / high street – this should be seen as a minimum figure UC still planned to have October 2013 start for new claimants Old & new benefit systems to run alongside until 2017 when everyone on UC. More information on DWP website – policy area

Thanks for listening! Contact us…. Welfare Rights and Community Liaison Monday to Thursday 9am to 5pm Friday 9am on 4.30pm

A fresh approach to people, homes and communities Summing up…. Yes it’s complicated! Don’t panic! If you’re to be affected – Berneslai Homes, the council and/or DWP will be in touch. Talk to us and plan for those things you know will affect you.

A fresh approach to people, homes and communities More questions? Officers available for rents or lettings enquiries. On your tables…. question forms Useful contact numbers

A fresh approach to people, homes and communities Prize draw Helen Jaggar

A fresh approach to people, homes and communities Next Panel Budget review and setting Wednesday 17 th October pm to 8pm

A fresh approach to people, homes and communities Have a safe journey home Don’t forget to fill in your review forms!