Welfare benefits reform: details and impact

1. Welfare benefits reform:details and impact Stuart Hellon, Chief Officer, Boston CAB

2. Benefit system recipients • Unemployed • Working population • Parents • Sick and disabled • Pensioners – only group not affected

3. Welfare benefit reform: why? • To simplify the benefits system • To save money (£18 billion by 2014) • To lessen welfare dependency • To make work pay

4. Smaller changes • Local Housing Allowance – private tenants • Local Housing Allowance – young people • Local Housing Allowance – social tenants • Council Tax Support Scheme • Social Fund • Benefits Cap • Personal Independence Payments

5. The BIG change • Income-based JSA • Income-related ESA • Income support • Child Tax Credit • Working Tax Credit • Housing Benefit Universal Credit

6. Universal Credit • One household payment • Monthly in arrears • “Digital by default” • “Rent payment” direct to tenants • Designed to help people to adjust to the “world of work” • Can earn some wages without affecting benefits (disregards) • 35:65 taper system • Tougher sanctions regime tied to labour market activity • Couples of a pensioner and working age are treated as a working age household

7. Council tax support scheme • Replaces Council Tax Benefit from April 2013 • Central government grants reduced by 10% • Pensioners and other groups protected • Minimum liability of taxpayers set at local discretion (subject to maximum 25%) • Boston + East Lindsey = 25% • West Lindsey = 8.5% • South Holland + South Kesteven = 8% • North Kesteven = 5% • Lincoln = 0%

8. Benefit Cap in practice • Claimant is a lone parent with 6 children (2 under the age of 5). She lives in a five-bedroom house, rent £150 p.w. • She currently receives £650 per week in total • Any amount over £500 p.w. will be taken out of Housing Benefit (or the housing element of UC) • How will she adjust to this change?

9. PIP savings • Estimated reduction in DLA claimants – 500,000 • Estimated reduction in Carers’ Allowance claimants – 5,000 • Savings £2.24 billion by 2015/16 • ‘Knock on effect’ on other entitlements (premiums)

10. What does it mean to the individual? • “Bedroom tax” • Weekly rent £100: £14 or £25 per week • Council tax • Band A (£970): £4.66 or £3.50 per week • Single person room rate (below 35) • Approx. £56 per week • Rigorous application of sanctions = no income • People with disabilities lose money

11. Impact in Boston ……… • CAB • Benefits/tax credit issues at nearly 50% • Employment and housing issues increased by 40% and 50% respectively at CAB • Homelessness cases up by nearly 50% • Boston Mayflower • Increase in arrears amounts and numbers • Boston Borough Council • Increase in council tax arrears at Boston Borough Council

12. Demonising the “scroungers”? • What % of the bill is paid for: • unemployment? • fraud? • family/working people? • housing • incapacity, injury, disability? • pensioners? • How many people nationally receive at least one benefit?

13. Any questions? • Please take a fact sheet with you ….