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Welfare Reforms

Welfare Reforms. An overview of the benefits affected and potential impact. Setting the Scene. Benefits Cap – September 2013 Restrictions to Tax Credits Housing Benefit restrictions – on going Changes to sickness benefits Disability Living Allowance – Personal Independence Payments

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Welfare Reforms

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  1. Welfare Reforms An overview of the benefits affected and potential impact

  2. Setting the Scene • Benefits Cap – September 2013 • Restrictions to Tax Credits • Housing Benefit restrictions – on going • Changes to sickness benefits • Disability Living Allowance – Personal Independence Payments • Localisation – Council Tax Help – April 2013 • Localisation – Social Fund – April 2013 • Universal Credit – starts 2013/2014

  3. Private Sector rent restriction • Local Housing Allowance (LHA) is used to set the amount of rent used for Housing Benefit • Levels set for different sizes of property by location • Rules set the size of the property allowed for each household depending on size

  4. Changes to LHA • LHA rates are set at 30% of average rents charged rather than 50% • Maximum 4 bedroom rate regardless of family size • Shared accommodation rate increased for single people from 25 to 35 years of age • LHA rates will be increased each April based on inflation (not location/market forces)

  5. Rent charges Rent charges

  6. Households where homelessness prevented

  7. Households presenting as homeless compared to statutory acceptances

  8. Social Housing Size Restrictions • People in housing association properties have their rent treated as eligible for benefit in full • From April 2013 for working age claimants size related criteria will apply • That is people under the qualifying pension age for women • Approximately 1000 housing association tenants living in Huntingdonshire will be affected

  9. Who needs a bedroom? • A couple • A person who is aged 16 or over • Two children (under 16) of the same sex • Two children who are under 10 • Any other child (not a foster child or one whose main home is elsewhere) • A carer or group of carers who provide overnight care to a disabled person

  10. Social Housing Size Restrictions • People who ‘under occupy’ could lose benefit • Reduction will be 14% for one room, 25% for more than one room on the rent figure used to work out benefit entitlement • These rules will not affect people in ‘exempt’ supported accommodation • No 4 bedroom maximum rate • No shared accommodation rate

  11. Who will be affected? • Couples whose children have left home • Divorced or separated families • Foster carers • Families who have a child who is looked after by LA • All others with a spare bedroom

  12. Social Housing Size Restrictions • HDC has given a list of households affected to each housing association • HDC and the housing associations have written to people affected • It is important that people think about how they are going to deal with this change and talk to their landlord and the HB Team

  13. What does the Government suggest? • Move to more appropriate accommodation • Take in a boarder or lodger • Ask non dependant family members to contribute more • Start work or increase hours of work • Apply for a Discretionary Housing Payment

  14. Discretionary Housing Payments • ‘Top up’ where Housing Benefit does not meet full housing costs • Administered at HDC by the Benefits Team • Discretionary – no entitlement • Increased DHP budget for 2013/14 (Up from £56k in 2012/13 to £170k in 2013/14)

  15. Benefit Cap • Postponed from April to September 2013 • Out of work benefits to be capped so that people out of work should not have more income than people in work • Cap will be £500 per week for couples/families • And £350 per week for single people • Benefit received above that level will be removed from Housing Benefit • The cap does not apply if someone in the household gets Disability Living Allowance or Working Tax Credit

  16. Tax Credit Changes • Cuts were made to Tax Credits in April 2012 • Most couples with children now need to work at least 24 hours per week (previously 16) to get Working Tax Credit • Families used to get some Child Tax Credit until taxable income was over £40,000

  17. Sickness Benefits • The new sickness benefit, Employment and Support Allowance was introduced in 2008 • People on Incapacity Benefit, Severe Disablement Allowance & Income Support as sick are being reassessed for the new benefit • If accepted as ‘sick’ will transfer onto ESA • If not accepted (after challenge), they may have to claim Jobseekers Allowance – look for work • Transfer runs until April 2014

  18. Employment and Support Allowance • The test is the ‘Work Capability Assessment’ • Points based system for deciding ‘sickness’ • Many people have a medical assessment • Carried out by ATOS healthcare • Lots of people have been told they are fit for work • Large increase in appeals

  19. Disability Living Allowance • From 2013 Disability Living Allowance will be phased out for working age adults • To be replaced by a new benefit – Personal Independence Payment • The intention is to reduce the budget for disability benefits by 20% • Applies to 16 – 64 year olds • Medical examination required

  20. Localisation of Council Tax Support • The national Council Tax Benefit scheme is being abolished from April 2013 • District councils must devise their own scheme within certain parameters: • Funding cut by about 10% • Pensioners must not be affected by any change • Must consider the impact on vulnerable people • Can look to make the savings from elsewhere

  21. Localisation of Council Tax Support • Main principles of scheme at HDC: • Most working age people will have their Council Tax Support based on 80% of their Council Tax liability • Families with children under 5 – 85% • Severely disabled people and families with disabled children – 100% • Just under 5000 working age people currently claim help towards their Council Tax in Huntingdonshire

  22. Impact of Council Tax Support

  23. Localisation of Social Fund • National Social Fund has been administered by the DWP • Community Care Grants and Crisis Loans to go • To be replaced by local authority schemes – county councils • Reduced funding from Government • Not ring fenced • Councils will announce schemes soon

  24. Universal Credit • Replaces seven means tested benefits • Income Support, income based JSA and income based ESA • Child Tax Credit and Working Tax Credit • Housing Benefit • Housing costs in Income Support/ESA/JSA

  25. Universal Credit • Expected to be phased in between 2013 and 2017 • Major change in benefits law • Will rely on large IT systems – linked to Income Tax records • Claims will be ‘digital by default’ • Housing Benefit will gradually transfer away from HDC to Department for Work and Pensions from 2014

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