Impacts on Welfare Reform

Richard Gass

• 27th November – Smith Report

• 22nd January - Proposals for Draft Bill– Scotland in the United Kingdom: An enduring

settlement

• After 7th May 2015 - Publication of Scotland Bill on further devolution.

Devolved Powers - Timetable

Universal Credit

• Universal Credit will remain a reserved benefit (Smith para 43)

• The Scottish Government will be given the administrative power to change the frequency of UC payments, vary the existing plans for single household payments, and pay landlords direct for housing costs. (para 44)

Universal Credit cont’d

The Scottish Parliament will have the power to vary the housing cost elements of UC, including varying– the under-occupancy charge AKA

bedroom Tax – local housing allowance rates, – eligible rent, and – deductions for non-dependents.(45)

Universal Credit cont’d

• No power to vary other elements of UC

• Conditionality and sanctions within UC will remain reserved. (46)

• Administration costs associated with variation of housing costs will be met by the Scottish Government.(47)

Benefits to be devolved - Para 49

(1) Benefits for carers, disabled people and those who are ill:

– Attendance Allowance, – Carer’s Allowance, – Disability Living Allowance, – Personal Independence Payments, – Industrial Injuries Disablement Allowance– Severe Disablement Allowance

.

Benefits to be devolved – cont’d

(2) The Regulated Social Fund:

– Cold Weather Payment, – Funeral Payment, – Sure Start Maternity Grant – Winter Fuel Payment.

(3) Discretionary Housing Payments.

Delivery Arrangements

Motability in Scotland for DLA/PIP to be agreed between the Scottish and UK Governments.(50)

For the devolved benefits, it would be for the Scottish Parliament to agree a delivery partnership with DWP or to set up separate Scottish arrangements.(51)

Transfer of Budget

• Equivalent to the existing level of Scottish expenditure by the UK Government on the benefit being devolved.

• In addition, any UK savings arising from no longer administering these benefits will be transferred to the Scottish Government

Additional Costs

If the Scottish Government uses any of these powers to vary reserved benefits or create new benefits it would have to meet any associated costs.

•What will be affordable?

•Scottish Government’s wider budgetary decisions.

Powers to create new benefits and top-up reserved benefits

• Powers to create new benefits in areas of devolved responsibility

• New powers to make discretionary payments in any area of welfare without the need to obtain prior permission from DWP

• Again costs will be will be met by the Scottish Government

Powers to create new benefits cont’d

• Any new benefits or discretionary payments must provide additional income for a recipient and not result in an automatic offsetting reduction in their entitlement to other benefits. (55)

• The UK Benefit Cap will also be adjusted to accommodate any additional benefit payments that the Scottish Parliament provides.(56)

Tribunals

• Operation of all reserved tribunals will be devolved other than the Special Immigration Appeals Commission and the Proscribed Organisations Appeals Commission. (63)

• The laws regarding rights and duties will continue to remain reserved. (64.)

Minimum Wage & National Insurance Contributions

• The National Minimum Wage will remain reserved.(59)

• All aspects of National Insurance Contributions will remain reserved.(80)

Areas to be explored

• Explore the possibility of different powers in Scotland for asylum seekers to access accommodation, financial support and advice.

– Para 96 (4)

Value of benefits to be devolvedBenefit £Millions Claimants

DLA £1,473 343,370

Attendance Allowance £481 150,200

Winter Fuel Payments £186 1,086,080

Carers Allowance £182 103,760

Industrial Injuries Disablement £91 32,200

Severe Disablement Allowance £91 18,993

Discretionary Housing Payments £18 -

Funeral Payments £4 -

Maternity Grants £3.9 -

Total £2,530

Scotland Act

• The general principle within the Scotland Act is that Social Security matters are reserved unless there are specified exceptions.

• The Draft Clauses attempt to describe the exceptions that are required to allow the benefits devolved including the variation to Universal Credit Payments

Severe Disablement Allowance

• The inclusion of (SDA) is a at odds with the fact that (ESA) is reserved (and will become part of Universal Credit).

• Could lead to a situation where some people are entitled to the UK benefit, ESA (or UC equivalent) because they are disabled and unfit for work and others entitled to a Scottish version of SDA for the same reasons.

Carers

In Clause 16 Exception 2 - Carers Benefits are to be devolved but this does not apply to element of benefits that are reserved.

Problem: If in Scotland we introduce a more generous carers allowance in terms of eligibility rules how would this be treated for the carer’s premium within means tested benefits which are reserved?

Carers continued

In Exception 3 does the inclusion of definitions of benefits restrict the scope to broaden entitlement?

Definition: A relevant carer cannot be in full time education or gainfully employed. Will this mean that in Scotland we could not expand entitlement to those in education or working?

Industrial Injuries

Industrial Injuries are included for devolution but not Lump Sum payments in respect of the asbestos related diseases.•Would Scotland choose to change these?

•Perhaps consider new prescribed diseases.

Discretionary Payments

• Clause 18 Exception 5 and 6: The smith proposal was to allow discretionary payments in any area of welfare. Clause 18 however restricts this power to short term and occasional needs.

• Does this not already exist under Scottish Welfare Fund?

Discretionary Housing Payments

Clause 19

This exception does not allow DHP payments to help with charges for water, sewerage or related environmental services,

Universal Credit is ReservedRecommended the devolution of powers:

– Frequency of payments– Who the Payments are to– making payment direct to landlords for rent element

Also powers relating to – Under occupancy Charge (Bedroom Tax)– Local Housing Allowance rates– Non Dependent deductions

Draft Clauses: Variation to UC

Clause 20 and 21• (3) The Scottish Ministers may not exercise the

function of making regulations to which this section applies unless— (a) they have consulted the Secretary of State about the practicability of implementing the regulations, and (b) the Secretary of State has given his or her agreement as to when any change made by the regulations is to start to have effect,

Issues:- Social Fund

• Current Funeral Payments widely regarded as inadequate.

• Maternity Grants – Been restricted in recent years. Possibly restore payments for second and subsequent children.

• Cold Weather payments rarely ever made.

• Issue – costs!

DLA-PIP Reassessment

• DLA to PIP reassessment process has accelerated in last few months.

• Cost saving so this will impact on budget that will be transferred

• Will claimants be subjected to this change only to have another applied under devolved powers.

Appeals & Challenges

• Volume of Appeals all decisions is down

• People are not challenging sanctions

• Possible Reasons– Mandatory Reconsideration– Drop in claimant expectation– Media portrayal of claimants

New benefits – Appeal Rights

• Need a strong rights based entitlement

• Entitlement needs to be promoted to claimants

• Entitlement needs to be universal across Scotland

• Robust mechanism to challenge decisions – no less than DWP benefits they are replacing

Role of Advice Agencies

• Advisers need to feel confident to challenge decisions.

• No risk to funding

• The chosen Delivery Agencies must accept that challenging decisions is part of entitlement.

Richard Gass

richard@rascot.org.uk