Raising Community Awareness of the Welfare Reform Bill
This week, I attended a seminar jointly hosted by Aspire & Succeed CIC and the Birmingham Tribunal Unit in Lozells focusing around raising community awareness of the Welfare Reform Bill that is currently proceeding through Parliament. The session included the basic outline of the proposed changes and how the local community may be affected by these changes.
The Government is being urged by Labour to abandon contentious welfare reforms after a series of defeats in the Lords. Planned restrictions on employment and support allowance (ESA) affecting cancer patients and the disabled were overturned by peers considering the Welfare Reform Bill.
The Lords also rejected a proposed one-year limit on ESA claims.
Labour said the coalition had been defeated for trying to “cross the basic line of British decency” and urged ministers not to try to reinstate the measures in the Commons.
We are being led to believe that the Government’s intentions for reforming the Welfare System are to improve work incentives, simply the benefits systems and reduce the costs of administering the benefits system.
Headlines of the Welfare Reform Bill
• Universal Credit (new benefit for working age claimants)
• DLA replaced with Personal Independence Payments (PIP) for working age claimants
• Benefits Cap
• Crisis Loans/budgeting loans/community care grants abolished
• Housing benefit for many council/housing association tenants will be restricted if their property has more bedrooms than needed
• Council tax benefit abolished
• Pension Credit will remain but some changes including new capital limit
The following benefits will be abolished:
• Income Support
• Income based jobseeker’s allowance
• Income related employment and support allowance
• Housing benefit
• Child tax credit
• Working tax credit
AND REPLACED BY UNIVERSAL CREDIT
Universal Credit is due to be introduced in October 2013 for new claims. Current claims will remain on existing benefits until they are transferred over to Universal Credit between 2014 and 2017. This Universal Credit is for working age people on low incomes and will be available to people in work and out of work. Claimants moving into work will keep more of their earnings.
There will be a benefit cap of £26,000 per annum per household to limit the amount paid to claimants.
Universal Credit will be made up of basic allowance pus additional amounts. The personal allowance will differ between single and couple applicants with additional amounts made up for:
• Each dependent child/qualifying young person
• Each disabled child/qualifying young person
• Housing costs (rent/mortgage)
• Limited capability for work
• Limited capacity for work related activity
• Caring responsibilities
• Child care costs
Personal Independence Payments will replace DLA for people age between 16 and 65. PUPs will be introduced in April 2013. Like DLA, it will have 2 components being Daily Living and Mobility.
Each component will be payable at one of 2 rates:
• Standard – for people who are limited by their condition
• Enhanced – for people severely limited by their condition
No lower rates of care or mobility components.
There are also key changes to be made to Tax Credits this year.
• Upper income threshold reduced to £40,000
• Taper increased 12% to 41%
• Removal of baby element
• Entitlement to WTC extended to include those aged 60 or over, who work a minimum of 16 hours per week
• Reduction of increased income disregard from £25,000 to £10,000
• Additional £150 increase in child element
• Removal of 50 plus element
• Reductions in income of up to £2,500 will be ignored
• Backdating period reduced to one month
• Additional £60 increase in child element
• Qualifying hours for couple to qualify for WTC increased to 24 hours per week
Child Benefit rates have been frozen until 2014 with a proposal to withdraw Child Benefit from higher tax earners by April 2013.
There are also key changes to Housing Benefit this year:
• Local Housing Allowance (LHA) set 30th percentile of average rents
• Four bedroom rate becomes maximum LHA payable
• £15 excess on LHA removed
• Extra room rate payable for overnight carer for claimants with a disability
• Maximum LHA rates nationally per week:
o £250 one bedroom
o £290 two bedroom
o £340 three bedroom
o £400 four bedroom
