Welfare Reform and Tenant Management Organisations Karen Williams and Ursula Barrington August 2012.

Welfare Reform andTenant Management Organisations

Karen Williams and Ursula BarringtonAugust 2012

Benefit Cap

• Announced in Spending review 2012 “Cap household benefit payments from 2013 so

that no workless family can receive more in welfare than median after tax earnings for working households”

Benefit Cap

• Will apply to people aged 16 to 64, also known as 'working age'.

• The cap applies to the household.• A household means claimant, their partner if

they have one and any children the claimant is responsible for and who live with them.

Benefit Cap

• A maximum benefit payment of £350 a week for a single person

• Single person defined as having no partner and either have

–No children–Or have children but they do not reside with

claimant and therefore classed as not having responsibilty.

Benefit Cap

• A maximum benefit payment of £500 a week for couples and lone parents.

Benefit cap

• What's included in the benefit cap• Bereavement Allowance• Carer's Allowance• Child Benefit• Child Tax Credit• Employment and Support Allowance (except where it

is paid with the support component)• Guardian’s Allowance• Housing Benefit

Benefit Cap

• Incapacity Benefit• Income Support• Jobseeker's Allowance• Maternity Allowance• Severe Disablement Allowance• Widowed Parent's Allowance• Widowed Mothers Allowance• Widows Pension• Widows Pension Age-Related

Benefit Cap Exemptions

• Households exempt from the cap• Those entitled to working tax credit• Those in receipt of , disability living allowance,

attendance allowance, support component of ESA, Industrial Injuries Benefits and equivalent war disablement pensions war widows and war widowers pensions.

Other exemptions

• Claimants who have been in employment for a 52 weeks or more prior to their claim will be exempt for a grace period of up to 39 weeks.

Benefit Cap

• Delivery phases-• Phase 1- From April 2012 Jobcentre plus and

Local Authorities should be providing support to households claiming out-of-work benefits that will be impacted by the cap in April 2013

Benefit Cap

• Phase two- April 2013• Implementation of the cap for new and

existing claimants will commence.• The deduction of benefit will be made direct

from the claimants housing benefit

Benefit Cap

• Phase 3- New claims to Universal Credit will be subject to the cap from October 2013

Universal Credit

Universal Credit is a new single payment for people who are looking for work or on a low income.

Universal Credit

• Will replace• income-based Jobseeker’s Allowance• income-related Employment and Support

Allowance• Income Support• Child Tax Credits• Working Tax Credits• Housing Benefit.

Universal Credit

• The main differences between Universal Credit and the current welfare system are:

• Universal Credit will be available to people who are in work and on a low income, as well as to those who are out of work

• most people will apply online and manage their claim through an online account

• Universal Credit will be responsive, as people on low incomes move in and out of work, they’ll get ongoing support – giving people more incentive to work for any period of time that is available

Universal Credit

• most claimants on low incomes will still be paid Universal Credit when they first start a new job or increase their part-time hours

• claimants will receive just one monthly payment, paid into a bank account in the same way as a monthly salary

• support with housing costs will go direct to the claimant as part of their monthly payment.

Timeline

• April 2013 – launch of Universal Credit pathfinder

• Starting in April 2013, with delivery partners DWP will introduce Universal Credit to claimants within certain areas of the North-West of England.

• This “pathfinder” stage is to try and ensure that Universal Credit is ready to go live across the rest of the country later in 2013.

Universal Credit- Timeline

• October 2013 – national launch of Universal Credit

• New claimants: They will be able to make claims for Universal Credit from October 2013, while claims for existing benefits and credits will be gradually phased out.

• From April 2014, all new claims will be for Universal Credit.

Universal Credit- Timeline

• Existing claimants: They will move onto Universal Credit in line with a phased approach that is expected to be completed by the end of 2017

Council Tax

• From April 2013 Council Tax Benefit will be replaced with ‘localised support’ via Local Councils.

• The aim of the changes is to reduce the current £4.8 billion annual Council Tax Benefit bill across Great Britain by 10%.

Council Tax

• At the moment local councils administer Council Tax Benefit in their areas based on rules set centrally.

• Under the new scheme, councils would be put in full charge of setting the Council Tax rates, collecting payments and providing financial support to pay Council Tax using a new form of discount.

Council Tax

• Under the new scheme A fixed amount of money will be provided to local authorities by central government to operate the new schemes.

• Pensioners will be protected against any reduction in support, so savings will have to be made from the assistance the working-age population receives with their Council Tax.

Council Tax

• It will be up to the individual councils to decide exactly how to achieve these savings within the design of their scheme.

• This will involve looking at which people who are of working age will be eligible for assistance and how much this help will be worth.

Council Tax

• If each council has its own scheme with its own qualifying criteria, there will be a ‘postcode lottery’ whereby a person might receive assistance from one authority but would not qualify for assistance if they moved to another.

• Local councils should be able to make adjustments to their schemes each year to accommodate for changes in need in their area.

Size Criteria

• Working age household deemed to be under occupying their home will lose part of their housing benefit from April 2013.

• Working age is defined as those below the pension credit age this will be 61 in 2013

• This will rise in line with women’s state pension age until equilisation with men is achieved (2018).

• By 2020 the state pension age will be 66 for everyone. It is likely the Pension Credit age will follow this, leaving more people affected by size criteria

Size Criteria

• Single people and couples living on their own in 2 and 3 bedroom homes will be considered under occupying.

• The rules on when children can share bedrooms mean that many families will also be considered under occupying and will lose a proportion of housing benefit

Size Criteria

Who is entitled to a bedroom?• Each couple• Each single person (including older children)

aged 16 years and over.• Two children of the opposite sexes can share a

bedroom until their 10th birthday• Two children of the same sex can share a

bedroom for until their 16th birthday

Size Criteria

Exceptions will not be made for the following• Separated couples who have access to their

children• Couples who use their ‘spare’ room when

recovering from illness• Foster Children (they are not counted in the

household for benefit cases)

Size Criteria

Exceptions will not be made for the following• People who have children or grandchildren

visit and stay over• Families with disabled children• Disabled people including people living in

adapted or specially designed properties

Size Criteria

• The amount of housing benefit you will lose will be based on a percentage of your rent.

• Currently this is set at a 14% cut for one extra bedroom and 25% cut for two or more extra bedrooms

• Therefore the higher the rent the higher the amount of money which will be deducted from housing benefit each week

Size Criteria

• Therefore if your rent is £110 per week you will lose £15.40 per week of housing benefit if you are under occupying by one bedroom and £27.50 per week if you are under occupying by two bedrooms.

• Claimants will have to find this shortfall from existing income and benefits to pay their rent.