1. Welfare Reform By Samantha Creary

2. Welfare Reform Objectives Improve work incentives Simplify benefits system Reduce administration costs

3. Target Savings Total Savings Target is £11 billion Areas affected –Universal Credit –Council Tax Localisation –Social Fund Localisation –Personal Independent Payment Other Changes

4. Key Changes - Summary Tighter rules for JSA – New Work Programme Loss of Child Trust Fund Loss of Health in Pregnancy Grant Migration of IB to ESA 2011- 2014 Changes to Tax credits 2011 * Couples must work 24 hours in order to receive WTC * Childcare costs reduced to 70% Housing Benefit –Local Housing Allowance Limit reduced to 30% percentile. –LHA reduction of 10% –Non dependant deduction increases –Single Room Rent Increased from 25 to 35 –DHP budget increased. Introduction of PIP from 10/6/13 Localisation of Council Tax Introduction of Local Welfare Provision

5. Employment Support Allowance Replacing Incapacity Benefit and Income Support Three year Migration programme –1.5 million cases –500,000 per year –10,000 each week DWP estimate that 20% will fail to qualify after going through the Work Capability Assessment Sandwell has 13,000 claims

6. Employment Support Allowance Some will get jobs Most will move onto JSA 40,000 are parents who still get additions for children in there is/ESA + CTC Transitional protection (frozen) only for people on ESA ESA C – will only be paid for 12 months –530 claims for Sandwell ESA/IB 15,910

7. Housing Benefit LHA limited to maximum of 4 bed roomed room property LHA set at the 30 th percentile not the median rate (previously 50%) Additional Room for carer Non-dependant increases DHPs budget has been increased HB to be reduced to 90% for those on JSA for 12 months - 2013

8. LHA Reductions The reductions in LHA rates due to the 30 th percentile calculation were as follows: –1 Bed -£90.90 LHA rate reduced to £79 –2 Bed -£109.32 LHA rate reduced to £100 –3 Bed -£129.58 LHA rate reduced to £115 –4 Bed -£159.95 LHA rate reduced to £138 This change means that all existing LHA customers will receive a decrease in benefit at some point during 2011/12.

9. Implications for Sandwell Reduced rate of HB for under 35’s –Will affect 600 cases Reduction in the amount of HB payable due to 30% rate –Will affect 6,000 people affected 2011/12 HB reduction for people on JSA for over 12 months –1600 cases

10. DLA Claims 5.3 mill Attendance Allowance 12.1 mill Disability Living Allowance

11. DLA New Test for working age claims –Point scoring system 2013 New process –Medical assessment DWP estimate 20% reduction in expenditure –Total Savings 2013 = £360 mill 2014 = £1,075 mill

12. DLA – Sandwell 17,465 Care DLA claims –20% = 3,393 predicted reduction –Average loss 46.05 per week –Average weekly loss to all residence £156,247 –Average annual loss to all residents £8,124,844 17,485 Mobility DLA Claims –20% = 3,497 –Average loss 34.40 per week –Average weekly loss to all residence £120,296 –Average annual loss to all residents £6,255,392

13. Tax Credit Changes Increase in hours for Couple to 24+ hrs WTC extended to 60+ who work 16+ hrs Removal of 50 plus element Reductions of income of £2,500 will be ignored Backdating reduced to one month

14. Universal Credit A single working age income related payment will replace: –Income Support –Income Based JSA –Income Related ESA –Housing Benefit –Child Tax Credit –Working Tax Credit Payment monthly in arrears

15. Council Tax Localisation The rules currently in the Council Tax Benefit scheme will remain the same for ‘Persons of Pensionable age’ from April 2013; however there will be a number of amendments for ‘Working Age Persons’. The following amendments will be adopted from April 2013 for Working Age Persons: Second Adult rebate is removed. The capital cut off limit is reduced from £16,000 to £6,000. A minimum benefit rule of £1.00 per week is introduced. The taper is increased from 20% to 25%. Benefit is restricted to the maximum payable on a Band C property. For new claims, only those residents that have lived in the Borough of Sandwell for a minimum of two years be eligible for Local Council Tax Reduction. The two years residency should be demonstrated by: –A form of official document; utility bills; or other documents demonstrating at least two years residency in Sandwell; and –Inclusion in the Electoral Register for Sandwell for at least two years (unless ineligible to register).

16. Council Tax Continued The following amendments will be adopted in Council Tax from April 2013: Empty furnished property: 100% charge payable Empty and substantially unfurnished property 100% Charge Payable Uninhabitable Property 100% Charge Payable Long Term Empty premium After 2 years of a property being empty and unfurnished, a new long term empty Premium of 150% will be applicable Instalments From 1.4.13 customers have the option to pay by 12 installments.

17. Social Fund Localisation to Local Welfare Provision Processed by LWP team within strategic resources NO CASH PAYMENTS 2 Year Residency Required Maximum 2 claims per year Need to be on a qualifying benefit

18. Benefit Cap Benefits Included Benefits excludes households –DLA/PIP –War Widow/Widower

19. Other Changes Child Benefit Frozen until 2014 Child Benefit withdrawn from Higher Tax Payers (2013)

20. Winners and losers People of working age People with mild and moderate disabilities Lone parents People in Private rented accommodation Households with non dependants Disabled person who needs a carer to live ins Pensioners –No changes to AA –DLA changes do not apply to over 60’s –No change to Winter fuel Payments (yet!)

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