March 2012

Michael Simpson, Policy OfficerDrugScope /LDAN

LDAN Homelessness Forum:Welfare Reform Update

Received Royal Assent on 8th March 2012, focussing on three main areas:• Shared Accommodation Rate (not in Act)• Cap on household benefits• Replacement of Disability Living Allowance• Limiting Employment and Support

Allowance• Removal of Social Fund ringfence

Welfare Reform Act 2012

• Effective from Jan this year• Most single, childless claimants under 35

years old will only receive benefit to rent room in a shared property.

• 11,780 people affected in London - £87 average cut per week in London

• Affects mainly single men (71%) – 16% in employment, 44% unemployed

• 67% of under 25s already have a shortfall averaging £29 per week

Shared Accommodation Rate

“Exemption for those who have spent at least three months in a specialist hostel for homeless people where main purpose is to provide accommodation, care, supervision and support with a view to assisting homeless people to be rehabilitated or resettled in the community during their time in the hostel.” DWP

Source, Kate Webb, Policy Officer at Shelter

SAR Exemptions

• A cap on maximum household benefits of £26,000 is to be introduced.

• It will apply to families on out-of-work benefits, whether they are single or dual-parent, and regardless of number of children or any health/disability issues

• Cap includes JSA, Income Support, ESA, Housing Benefit, Child Benefit and Child Tax Credits

Household benefits

• DLA will be replaced with Personal Independence Payments

• Eligible for fewer than 500,000 people• Like DLA, PIP will be made up of two

components, care and mobility, but the component will be paid at one of only two rates

• Has the effect of upping eligibility threshold

Disability Living Allowance

• People who are judged suitable for limited Work Related Activity will only be eligible for ESA for a maximum of one year

• After the year, any continued eligibility will be means tested – if capital and savings are below £16k and their joint income does not exceed relevant applicable amounts.

ESA Limits

• Shared Accommodation Rate Jan 2012• One year time limit to ESA April 2012• Cap on maximum benefits 2013• Replacement of DLA with PIP April 2013

– 2017• Roll out of Universal Credit Oct 2013

Timetable for implementation

• Published on Tuesday – ‘Social Justice: transforming lives’

• Emphasis on recovery and independence and the ‘need to tackle the root causes of poverty’

• Work ‘for those who can’ and unconditional support for people who are ‘severely disabled and cannot work.’

• Notes that the homelessness strategy will be published in ‘the spring’

DWP Social Justice Survey