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Richard Gass. Chair of Rights Advice Scotland 22 nd June 2011 EDINBURGH. Emergency Budget June 2010. 11Billion in Welfare Savings (a further £7 Billion in Spending Review) Benefits to be increased by Consumer Price Index (CPI) and not Retail Price Index (RPI) from April2011
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Richard Gass Chair of Rights Advice Scotland 22nd June 2011 EDINBURGH
Emergency Budget June 2010 11Billion in Welfare Savings (a further £7 Billion in Spending Review) Benefits to be increased by Consumer Price Index (CPI) and not Retail Price Index (RPI) from April2011 Objective Medical Assessment for DLA
Benefit Uprating • The Consumer Price Index (CPI) will be used instead of the Retail Price Index for the uprating of benefits and tax credits from April 2011 (paragraph 2.32) • UPDATE: Benefits were uprated for 2011 with CPI 3.1% (RPI was at 4.6%)
Amount of DLA Lost by uprating with CPI rather than RPI DWP Data August 2010
Proposed DLA Changes Objective Medical Save 20% of current expenditure Personal Independence Payment Removal of Mobility in Residential Care Only 2 rates for ‘Daily Living’ Doubt over passporting to other benefits Payable over age 65?
DLA Weekly Expenditure All Ages Total DLA payments in Scotland £25 Million/ week
DLA Weekly Expenditure Working Age Only Total DLA payments to working age claimants in Scotland £14.5 Million/w
Reduction in Benefit Loss of Income to Claimants Loss of Income to Local Economy Consequential loss of Jobs Greater demand for council services
Fraser of Allander Institute Reports for Glasgow City Council in 2001 and 2003 An increase in benefits increases spending in the local economy and creates jobs £11Million created 258 Jobs in Scotland of which 180 would be in Glasgow A cut would have the reverse effect.
Personal Independence Payment • Consultation Closed on 18th Feb 2011 • From 2013 for all DLA claimants • 2 components • Mobility – 2 Rates • Replacing walking with mobilising • Daily Living – 2 Rates • Take greater consideration of potential aids
The period condition conditions be satisfied 6 months prior to claiming and to be likely to continue for a period of at least 6 months. Terminal illness (same definition as for DLA) automatically receive the daily living component enhanced rate and will not have to satisfy the period condition for the mobility component. Age Restriction Concern that PIP will not be paid once someone reaches the age of 65 or pensionable age, whichever is the higher.
Example 1 Mother age 50 living in a rented house with her son age 30. Mother is partially sighted and is in receipt of DLA lower rate care & lower Mobility , she also gets Jobseekers Allowance Son works full time, wage = £250 per week Mother is the tenant, house rent is £100 per week. The full rent met through Housing Benefit.
Current Financial Position What if the mother was to lose her entitlement to care/daily living
Mother loses DLA Loss to weekly income £73.70 (Note that Non dep deductions rose by 27% taking out another £11.30on HB and Council Tax Benefit.
Non Dependent Deductions • Pre April 2011 Aged 25+ JSA £ 7.40 Gross wages below £120 £ 7.40 £120 – £177.99 £ 17.00 £178 – £230.99 £ 23.35 £231 – £305.99 £ 38.20 £306 – £381.99 £ 43.50 £382 and above £ 47.75 • After April 2011 Aged 25+ on JSA £ 9.40 Gross wages below £122 £ 9.40 £122 – £179.99 £ 21.55 £180 – £233.99 £ 29.60 £234 – £309.99 £ 48.45 £310 – £386.99 £ 55.20 £387 and above £ 60.60 The above are weekly deductions from Housing Benefit. Other deductions apply to Council Tax Benefit.
Example 2 Father age 50 living in rented accommodation with daughter age 30. Father is partially sighted and is in receipt of DLA middle rate care, and also ESA Daughter is registered blind and also gets DLA Middle rate Care and Low Mobility and also ESA. Father is the tenant and the rent is £100 per week. The full rent met through Housing Benefit.
Income prior to PIP re-assessment On assessment for PIP father loses entitlement and daughter keeps her entitlement
Loss of Father’s DLA Father loses £116.65 Daughter loses £55.30 Weekly loss to household = £171.95 • Loss of Father’s DLA , Loss of his SDP • Loss of Daughters SDP • Exposure to Non Dependent deductions Note Daughters Income is affected by loss of Fathers DLA
Options ? If the daughter was to move out she could restore her SDP and her father would then not have non dependent deductions from his Housing Benefit This could save £67.35 that would otherwise be lost. **
Even if they maintain entitlement to DLA/PIP Will benefit rates be the same? No guarantees that the passporting that currently exist continues Will there be an equivalent of Severe Disability Premium in new Universal credit
ICB Claimants (In thousands) Source DWP as at November 2009 Working Age Claimants
ICB Claimants (In thousands) Scotland total ICB count 243,030
** Benefit Loss (In millions per year) Assuming that 23% of people fail and 30% of those come off benefit
** Benefit Loss (In millions per year) Assuming that 23% of people fail and 30% of those come off benefit altogether Scotland Total loss £135.78 Million
IB Migration other factors Aberdeen Pilot showed a 29% failure rate New tougher ESA assessment being introduced as such failure rate will rise. Now intending to end entitlement to contribution based ESA after 12 months.
Questions for Government How real are projected savings How it will fill the £18billion black hole in the UK economy left by changes to welfare. How it will protect the quality of life of people currently on disability benefits. How it will ensure that local authorities and the third sector can continue to provide lifeline services
Unemployment Unemployment figures Feb 2011
Glasgow LHA rates Rates from 1st March to 31st March 2011: Size Criteria Weekly room rate • Shared accommodation £69.23 • 1 Bedroom £98.08 • 2 Bedrooms £126.92 • 3 Bedrooms £150.00 • 4 Bedrooms £230.77 • 5 Bedrooms £346.15
CPI v RPI Example CPI 3.1% RPI 4.6% September 2010.
