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Welfare Reform Update March 2013
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Welfare Reform Act 2012 The Act introduces a wide range of reforms to:
make the benefits and tax credits system simpler; create the right incentives to get more people into work; protect the most vulnerable in our society: and deliver fairness to those claiming benefit and to the tax payer.
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Welfare Reform changes in 2013
April 2013 Size Criteria (under occupation penalty) Changes to Council Tax Benefit Social Fund Reform Universal Credit Phased rollout April – September 2013 Benefit Cap Phased rollout April – October 2018 Personal Independence Payment
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Size Criteria (underoccupation)
Claimants will qualify for one bedroom (up to a maximum of four) for: Every adult couple Any other adult aged 16 or over Any two children of the same sex aged under 16 Any two children regardless of sex aged under 10 Any other child aged under 16 A non-resident carer (claimant/partner have disability and need overnight care).
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Size Criteria (underoccupation)
Size criteria will be introduced to Housing Benefit for working age claimants in the social rented sector from 1st April 2013 Those considered to be under-occupying their accommodation will see a reduction 14% of their total eligible rent for under-occupation by one bedroom; and 25% of their total eligible rent for under-occupation by two bedrooms or more.
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Examples Three bedroom house
Rent = £60 plus service charges of £20 (£80 in total). £5 of the service charge is ineligible so total eligible rent for HB purposes is £75. Two examples If Tom and Penny live in the property with James aged three and Polly aged one Applying the size criteria means that the household is deemed to be under-occupying by one bedroom. A 14% reduction of £10.50 is applied to the eligible rent of £75 resulting in HB entitlement of £64.50. If Mohammed and Aysha live in the property , they have lived their for 15 years and their three children have all now left home. Applying the size criteria means that the household is deemed to be under-occupying by two bedroom. A 25% reduction of £18.75 is applied to the eligible rent of £75 resulting in HB entitlement of £56.25.
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Size criteria in Oldham
There are 8,791 working age Housing Benefits claimants in the social rented sector Analysis suggests that 2,526 are under occupied 2,064 by 1 bedroom 462 by 2 bedrooms or more For those under occupying by 1 bedroom the average reduction in eligible rent will be £11 per week by 2 bedrooms or more the average reduction in eligible rent will be £21 per week We estimate the total reduction in HB to be £1.7m per annum
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What are we doing? Key area of focus for Oldham Housing Investment Partnership (OHIP) and established a Welfare Reform Working Group Agreed Data Sharing Protocol and exchanged data Agreed Joint Communications Plan Looking to provide tenants with Financial and budgeting support Monitoring the impact on own organisations Looking at Discretionary Housing Payments OHIP WELFARE REFORM WORKING GROUP Set Up May 2012 Reps from Housing Providers and Oldham Council Explore the challenges and impacts of welfare reforms Identify the priority actions Work together saving duplication, creating efficiencies, greater impact Joint comms plan Comms leads working together Verification of data Agreed wording and timing of letters to tenants who are affected Awareness raising and support for tenants. Financial and budgeting support Monitoring the impact on own organisations Data sharing: - Agreed protocol Secure portal to transfer information RP security of data Financial inclusion group refocusing their action plan on welfare reform issues. Standard item on OHIP Board
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Discretionary Housing Payments
Oldham allocation for 2012/13 was £173k for 13/14 that has increased to £498k Funding allocated to local authorities to support those affected by the size criteria and the benefit cap £30m for the size criteria funding priorities £25 million to assist those who live in significantly adapted accommodation due to someone in the household having a disability. £5 million to assist foster carers, including those between placements. New DHP policy
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Council Tax Benefit replaced by local scheme
Reduction in funding to local authorities £3m reduction in funding (which includes £400k for the fire and police preceptors) £1m additional income will be raised from Council Tax changes to empty properties and second homes £2m less available to pay in benefit 10,786 claimants of Pension Credit Age are protected 12,916 households will have Council Tax to pay for the first time 4,209 households will have an increased amount to pay
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Oldham’s scheme for working age claimants
Approved at full council on 12th December 2012 The method of calculation will be similar to the current Council Tax Benefit Scheme i.e same rules for income capital and non-dependent charges. What’s different Benefit will only be calculated based on the Band A Rate of Council Tax (this will affect all claimants in Band B or above) Benefit entitlement will be reduced by 25% Second adult rebate will be abolished
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Local Welfare Provision
Abolition of Crisis Loans for living expenses and Community Care Grants paid by DWP Social Fund New emergency provision for vulnerable groups Council has approved a new scheme which will include preventative measures supply of goods cash in exceptional circumstances only
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Universal Credit
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Simplifying a complex system
Current system Future system Income Based JSA Income related ESA Income Support Working Tax Credits Child Tax Credits Housing Benefit Universal Credit Disability Living Allowance Personal Independence Payment Pension Credit … to include support for housing and children Child Benefit, Carer’s Allowance (will remain) All current income based/related benefits in to one benefit Reformed versions of contributions-based benefits, such as Jobseeker’s Allowance and the Employment and Support Allowance, will continue alongside Universal Credit. Simplified processes Interruptions and uncertainties inherent in having to switch between benefits will go away. For example, the current benefit and tax credit systems don’t interact with each other – so people trying to leave benefits find their benefit income stops instantly, but there can be a wait for tax credits payments start. By bringing the tax credit and benefit systems together, there will be no need to move between systems – and no payment gaps which is important to people when taking work. Increased incentive to take short term work and try jobs out Reduces potential for fraud and error. Council Tax Benefit (Localised Council Tax Support Schemes) Contributory JSA and ESA (conditionality rules changing)
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Universal Credit is that tackles welfare dependency, poverty and worklessness by making work pay A policy that replaces a complex system of working-age benefits and credits with the Universal Credit and a single set of rules A benefit that together with employment support programmes, helps people into work A gateway that will help deliver an internet-age service whilst continuing face-to-face support for those who need it A platform An ambition What is UC? It the biggest change to the welfare system for 50 years – It a modern approach for modern lives - Universal Credit is designed for the world of work today (example) It is more accessible to people who really need it Universal Credit will provide a new single system of means-tested support for working-age people who are in-work or out-of-work that will ensure more people are better off in work It includes support for housing costs, children and childcare costs will be integrated in the new benefit. It will also provide additions for disabled people and carers The service will be digital by default, not everyone is expected to switch channels on day 1. There is a four year transition period from 2013 to 2017 50% of contacts that can be digital, should be digital in 2013 80% of contacts that can be digital, should be digital by 2018 But it is recognised that some claimants will need help to use the online service - other channels will be available for the minority who need them reforming welfare to transform lives
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Why Universal Credit? DWP are aiming to simplify a complex system of multiple benefits: the current system has over 10,000 pages of guidance for advisors it is expensive to administer It aims to make work pay: more help for low income working families claimants will keep more of what they earn improving incentives to increase hours of work simplified system will make moving to work feel less ‘risky’ Simplify v Complex 30+ benefits in different agencies with 10,000 guidance pages Expensive £95bn forecast for working age spending in £5bn a year is lost to error and fraud Human cost – wide ranging and intergenerational Make work pay . 28% of working age people receiving out-of-work benefits have done so for nine of the last ten years But present system encourages dependency, discourages work as the financial gains to work are slight Lack of transparency about how transition and what is available makes moving into work too risky Poverty is a life and death matter … For every tube stop on the Jubilee line going east, from Westminster to Canning Town, life expectancy decreases by one year Life expectancy in two different neighbourhoods of Glasgow, one rich, one poor, vary by as much as 28 years Worklessness has become a major issue for society. We believe Universal Credit will start to change this
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Universal Credit implementation – key dates
Pathfinder begins APRIL 2013 National introduction of Universal Credit starts – gradual introduction and testing of further scope and functionality, and phasing out of claims for existing benefits From OCT 2013 Expansion - new claims from people in work and moving current claimants to Universal Credit in phased approach During 2014 Universal Credit roll-out complete 2017
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Universal Credit – implementation and transition challenge
To deliver this DWP need to: convert 12 million claims to 8 million household accounts create a digital platform that both meets the needs of people who are used to managing their lives online, whilst helping claimants who need extra support to get online ensure the right support for claimants create a system capable of flexibility and continuous improvement From old to new A key aspect of successfully delivering Universal Credit, is handling the transition from old to new The Government has made it clear that DWP will be responsible for the implementation of Universal Credit and for organising its administration. The Department is currently examining in detail how best to achieve this and what impact that might have on its existing delivery agencies. Jobcentre Plus, HMRC, Local Authorities and the Pension, Disability and Carers Service have a wealth of expertise and knowledge and this will be crucial as the Department develops it plans. The best of the current capability will be used to deliver the new service, taking the opportunity to modernise and improve it to deliver better efficiency for the taxpayer and better service for claimants. minimises risk to implementation How Universal Credit will be delivered in the longer term is under active consideration. Decisions will be taken in 2015, so that we can learn from our early experience of delivery. Nothing static – don’t want to build something that then can’t be changed – want to be able to learn as we go along in delivery
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Testing before delivery
Live Innovation Trialling (started in April 2012) to trial components of the end-to-end Universal Credit service proposition in a live environment with real people in real time Model Office (first took place in April 2012) a series of incremental, integrated tests in a ‘controlled’ environment that will be built as the Universal Credit system, processes and support products are developed Direct Payment Demonstration Projects (started June 2012) will test key elements of incorporating housing support into Universal Credit whilst protecting the financial position of social landlords Before Universal Credit is launched in October 2013, various elements will be tested using both controlled scenarios and real claimants, in order to design out any issues which naturally arise when any major new service is launched. The selected pilots will be led by the following councils: Lewisham, Bath and NE Somerset, Birmingham, Melton in partnership with Rushcliffe, North Dorset, Oxford, West Lindsay, Dumfries and Galloway, North Lanarkshire, West Dunbartonshire, Newport and Caerphilly. In addition, bids from Wigan and Oldham were accepted and will now be taken forward by Pathfinder as pathfinder preparation projects. Joint work now underway to mobilise the pilots, working with the LAs, local DWP Managers, LGA, WLGA, CoSLA and across UC Programme.
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Testing before delivery
Local Authority-led pilots (to start Autumn 2012 – end September 2013) will test service integration, particularly design of face-to-face service delivery, at local level for improved claimant support and work focus Pathfinder (from April 2013 in Greater Manchester and Cheshire) an early implementation of Universal Credit – to enable DWP to learn from experience and build confidence Before Universal Credit is launched in October 2013, various elements will be tested using both controlled scenarios and real claimants, in order to design out any issues which naturally arise when any major new service is launched. The selected pilots will be led by the following councils: Lewisham, Bath and NE Somerset, Birmingham, Melton in partnership with Rushcliffe, North Dorset, Oxford, West Lindsay, Dumfries and Galloway, North Lanarkshire, West Dunbartonshire, Newport and Caerphilly. In addition, bids from Wigan and Oldham were accepted and will now be taken forward by Pathfinder as pathfinder preparation projects. Joint work now underway to mobilise the pilots, working with the LAs, local DWP Managers, LGA, WLGA, CoSLA and across UC Programme.
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Oldham and Universal Credit
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Pathfinder Pathfinder will take place from 29th April 2013.
It will test new payment system with local authorities, employers and claimants in a live environment – before national roll-out. Will target single, newly unemployed people, with or without rented housing costs, in Oldham, Tameside, Wigan, and Warrington. Pathfinder will take place from April It will test new payment system with local authorities, employers and claimants in a live environment – before national roll-out. Will target single, unemployed people, with or without rented housing costs, in selected areas in Tameside, Wigan, Oldham and Warrington local authority areas.
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Pathfinder Stage 1 2 3 November /December 2012
Landlord Engagement and Awareness Staff Awareness 2 January/February 2013 External stakeholder engagement 3 March/ April 2013 To be confirmed by DWP
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Oldham UC Face to Face Pilot
Objectives Raise awareness of Universal Credit through the development of a comprehensive Communications and Marketing Plan Support residents to access services online by providing access to computers, developing skills and building confidence in using self serve facilities Provide residents with access to financial and budgeting support and debt advice Identify residents with complex needs and assess the level of support required Support residents to access employment claimant and community
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Oldham’s Universal Credit Timeline
Date Claimant group November 2012 Local Authority-led (face to face) pilot commenced April 2013 Pathfinder commences with a limited group of new JSA claimants October 2013 Roll out commences for a wider group of new JSA claimants January 2014 New Working Tax Credit and Child Tax Credit will be claims for UC April 2014 New IS, ESA and HB claims will be claims for UC July 2014 Managed migrations with priority given to those who will benefit most from the transition From A gradual managed transfer of the remaining claims
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Key issues Paid to one person in the household
Monthly payment (in arrears) Paid to one person in the household Rent will no longer be paid direct to landlords , except in ‘exceptional circumstances’ On-line application and claims management
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Benefit Cap £350 per week for single claimants.
The cap will be set at £500 per week for couples and lone parents £350 per week for single claimants. Will not apply to those receiving Working Tax Credit Disability Living Allowance Personal Independence Payment (from April 2013) Attendance Allowance Industrial Injuries Benefits Employment and Support Allowance (support component ) War Widow's or War Widower's Pension
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Benefit Cap Introduction
NEW Benefit Cap Introduction Phased roll-out From April 2013, starting in four local authorities in London – Bromley, Croydon , Enfield and Haringey. All other Local Authorities will begin to apply the cap from 15th July 2013 and roll out will be complete by end of September 2013. Phased roll-out allows:- Testing of DWP systems and processes Ensures the supporting products and services for both staff and claimants are effective Allows DWP to build capacity to learn and respond to issues raised in the initial phase of rollout to inform national rollout. In December DWP announced that rather than national introduction from April 2013 there will be a phased roll out The benefit cap will be implemented from April 2013, starting in four local authorities in London – Bromley, Croydon, Enfield and Haringey. These were chosen as London has the highest percentage of potential benefit cap claimants and a diverse cross section of residents. This will be a phased roll-out with the remaining local authorities implementing the cap from 15th July 2013 and roll out complete by the end September The precise date at which this change will be rolled out nationally will be agreed in the New Year. A phased roll-out allows us to: test our systems and processes end to end in a controlled live environment ensure the supporting products and services for both staff and claimants are effective ensure there is a measured approach to rolling out the cap to affected households build capacity to learn and respond to issues raised in the initial phase of rollout to inform national rollout.
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An introduction to Personal Independence Payment
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A new benefit for disabled people is being introduced
Personal Independence Payment (PIP) will replace DLA for eligible claimants aged 16 to 64 from 8 April 2013 It is part of a wider reform of the welfare system It remains non means tested and non taxable, and is payable both in and out of work It will include an assessment of individual needs and introduces more consistent use of supporting evidence Slide 2: A new benefit for disabled people is being introduced DLA has been in place for 20 years, used little independent evidence and had no systematic review to make sure an award still met the claimants’ needs. The government is reviewing the whole of the welfare system and the replacement of DLA for working age claimants and the introduction of PIP is part of that review.
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PIP is designed to help with additional costs
PIP is to help towards some of the extra costs arising from ill health or disability It is based on how a claimant’s condition affects them not on what condition they have There is a three month qualifying period (the time a condition or ill health has existed before a claim is made) and a nine month prospective test (the amount of time a condition or ill health is expected to last when a claim is made) Awards will be reviewed to make sure the assessment continues to reflect the claimant’s needs Reviews will be at appropriate intervals depending on how likely it is for their condition or impairment to change Slide 3: PIP is designed to help with additional costs Awards will be based on the extent to which people are able to live independently and participate in society. There is a 3 month qualifying period (the time a condition or ill health has existed before a claim is made) and a 9 month prospective test (the amount of time a condition or ill health is expected to last when a claim is made). Claimants who already get DLA and who apply to PIP will not need to meet the qualifying period but will still need to meet the prospective period. Like DLA, claimants with a terminal illness will not need to meet either period and will be fast tracked to a decision under ‘special rules’, maintaining the short process that focuses on immediate needs.
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Updated implementation timetable
NEW Updated implementation timetable Date Claimant Group 8 April 2013 New claims in specific postcode areas in the North West and part of the North East of England June 2013 New claims for from all parts of the country October 2013 Existing DLA claimants will be invited to apply for PIP - Children turning 16 - People reporting changes of circumstances which would affect their rate of payment (does not include those going into a care home, hospital or prison or change of address) - Fixed-term DLA award recipients whose award expires from the end of February 2014 - Self-selectors (includes those with indefinite or fixed- term awards). October 2015 to October 2018 All remaining claimants in receipt of DLA will be randomly selected and invited to make a claim for PIP Personal Independence Payment assessment timeline From 8 April 2013 From 8 April 2013 new claims to PIP will be taken in the controlled start area in the North West and part of the North East of England. Postcodes affected are: CA, CH (except CH5, CH6, CH7 and CH8), LA (except LA27, LA28, LA62 and LA63), CW, FY, L, PR, WA, WN, BL, DH, DL (except DL6, DL7, DL8, DL9, DL10 and DL11), M, NE, SR, and TS (except TS9). During this time we will not invite any existing DLA claimants to claim PIP. Nor will we allow claims from DLA recipients who are seeking to make an early application to PIP (“self-selectors”). From June 2013 In addition to the area covered by the controlled start new claims to PIP will be taken in all remaining areas of GB. We will no longer accept new claims for DLA from anyone aged 16-64, unless they are making a renewal claim from a fixed term DLA award which is due to expire before the end of February These claimants will re-claim DLA, and where entitlement continues will be invited to claim PIP at a later stage. From October 2013 The following DLA recipients will begin to be invited to claim PIP: Children turning 16 (with the exception of those awarded DLA under the rules for people who are terminally ill) will be invited to claim PIP when their existing fixed term award is coming to an end; People reporting changes of circumstances which would affect their rate of payment (this does not include payability decisions as a result of going into a care home, hospital or prison or other changes of circumstances e.g. change of address). The rate of DLA will not be adjusted; Fixed-term DLA award recipients whose award expires from the end of February 2014 (reassessment activity starts approximately 20 weeks before existing DLA awards end); and Self-selectors (includes those with indefinite or fixed-term awards). From October 2015 All the remaining claimants in receipt of a DLA award will be invited to make a claim for PIP. We will randomly select those recipients of DLA in receipt of an indefinite award or a fixed term award, and notify them about what they need to do to claim PIP. We will invite claims as early as possible from recipients who have turned 65 after 8 April 2013, when PIP was first introduced.
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PIP has two components with two different rates
Personal Independence Payment is made up of a: Daily living component Mobility component Awards will be made up of one or both of these components Each component will have two rates: Standard Enhanced Slide 6: PIP has two components with two different rates If a claimant is awarded PIP, DWP will ensure there are no gaps between benefit payments, as long as a claimant sends in the information when they are asked for it. The benefit rates to PIP have been announced. They are: Daily Living Enhanced Rate = £79.15 Daily Living Standard Rate = £53.00 Mobility Enhanced Rate = £55.25 Mobility Standard Rate = £21.00 These rates are provisional until the legislative process is completed in early 2013.
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The proposed level of points needed for an award of PIP
Daily living component (activities 1-10) Mobility component (activities 11-12) Standard rate = 8 points Enhanced rate = 12 points Activity Possible points 1. Preparing food 0-8 11. Going out 0-12 2. Eating and drinking 0-10 12. Moving around 3. Managing your treatments 4. Washing and bathing 5. Managing your toilet needs 6. Dressing or undressing 7. Communicating 8. Reading 0 - 8 9. Mixing with others 10. Making decisions about money 0-6 Slide 8: The proposed entitlement threshold is the level of points needed to make an award of PIP Points will be awarded depending on the individual’s level of ability and the barriers they face
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There are 5 key stages to a new claim for PIP
Thinking about claiming – Information will be available online, leaflets and through support organisations Making a claim – A claim will be made by a telephone call to DWP initially and an application form will be posted out. Claiming online will be available from Spring 2014. Application -The claimant or their support will complete the claim form and post back to DWP with any supporting evidence. Assessment – Most people will be asked to attend a face to face consultation with a health professional. They can take someone along for support. Decision – A decision will be made by a DWP Case Manager on entitlement including level and length and of award. Existing DLA claimants will be invited to claim PIP individually 2. The claim form will be called ‘How your disability affects you’ and additional support, such as provision of alternative formats will be available. 3. Claim form will ask how their condition affects their daily life, both on good and bad days and over a range of activities. 4. Home visits will be available when necessary. Some claims may be assessed by written evidence supplied.
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Reassessed DLA cases by likely outcome of award under PIP
NEW Reassessed DLA cases by likely outcome of award under PIP Outcome Number of claimants % Award increased 510,000 29 Award unchanged 270,000 16 Award decreased No award 450,000 26 Total 1.74 million DWP 19/12/12
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What are we doing? Raising awareness and seeking opportunities to work together We have an action plan and communications plan Working with wide range of stakeholders in the Borough Working closely with DWP Preparing a draft local welfare scheme for consideration Reviewing the Discretionary Housing Payment Policy Linking into Welfare Rights Take Up Activities and Council’s other campaign e.g energy switching Appointing two new Welfare Rights Officers
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Communications Activities - strategy
The campaign will take a two tiered approach: Multi channel promotion across the borough utilising all external and internal communications and marketing opportunities. This will include Borough Life, social media, district screens, online, print and direct mail, partners, advertising and media. Delivery of targeted ‘drop in’ events (in areas that will be significantly impacted by WR) run in partnership with other local agencies, councillors and other departments. An event ‘toolkit’ will be developed to enable these events to be delivered.
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Communications Activities – strategy cont
The campaign will run in two phases: Pre - changes: January – April 2013. Raising awareness / encouraging residents to make preparations 2. Post changes: April 2013 onwards Impact of WR changes will be real and felt by residents, messages will be tailored accordingly
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Communications Activities – campaign identity
A campaign identity will be established to ensure, as far as possible, a level of brand awareness in residents: Activities commencing January – notes to follow
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Communications Activities – key messages
There are two key messages: Benefits are changing (Welfare Reform details) Make sure you’re prepared (support offer – see below) There will also be an overarching message of ‘make the most of your money’. This will signpost residents to money saving opportunities such as the Energy Switching Scheme, Oldham Credit Union, Fairs Fair Campaign, The Co-operative Shop etc. Signposting will also direct residents to other support mechanisms such as debt advice, skills and training, family budgeting courses, counselling services etc.
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Communications Activities – www.oldham.gov.uk/yourmoney
Includes: Money matters – benefits and debt advice, savings and loans etc Jobs, training and courses – jobs, training, apprenticeships, work experience, volunteering and learning courses etc Housing – mortgages, mortgage rescue, renting, homelessness, council housing etc
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Communications Activities – www.oldham.gov.uk/yourmoney
Family and emotional support – support for families and counselling services to help you cope Ways to save money – advice, tips and tricks to help you save money Free activities – have fun on a budget Drop in events will be promoted on both Welfare Reform and Your Money pages
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How can you help? Help us to identify and support those affected
Signpost people to the Council’s website Promote the events that are taking place Let us know if you are interested in getting involved the Universal Credit Pilot we are looking for Community Champions who can support online access Let us know your ideas!
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Any Questions
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