Welfare Reform Universal Credit, the Benefit Cap, Under- occupancy Deductions, and Council Tax.
Welfare Benefit and Tax Credit Changes
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Transcript of Welfare Benefit and Tax Credit Changes
Salford Welfare Rights and Debt Advice Service
Welfare Benefit and Tax Credit Changes
Incapacity Benefit Employment and Support Allowance
Re-assessment over 3 years
16,000 in Salford potentially lose £40 a week
Potential annual loss £20 million (£25 million to local economy)
Quality of medical assessment
Appeals – 40 % success
IB/SDA Work-related
Activity Group
Support Group
‘Fit for work’ JSA or nothing
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Welfare Benefit and Tax Credit ChangesHousing Benefit – all tenants
April ’11 – non-dependent deductions increasedApril ’13 – overall ‘benefit cap’ £500 a week (via HB reduction)
Housing Benefit - private tenants Max rent limited to Local Housing Allowance (LHA) level based on no. roomsApril ’11 – max 4 rooms (68 existing families in Salford – 9 month protection)April ’11 – LHA rates based on 30th percentileApril ’11 – non-dependent deductions increasedJan. ’12 – ‘shared room’ LHA rate for <25s <35s (710 existing tenant affected)April ’13 – LHA rates uprating linked to CPI not rent levels
Housing Benefit – social housing tenantsreduction if ‘under-occupying’ (impact on Salix + RSLs)Supported EmploymentSupported Tenancies inc. floating support
Housing Benefit . . . the end!Oct. ’13 phased move to Universal Credit over 5 years (new claims initially) 19,656 tenants of ‘working age’ in Salford affectedOct.’14 phased move to Housing Credit in Pension Credit (new claims initially) 9,318 pensioner tenants in Salford affected
Supported Tenants (proposed) Extra housing ‘credit’ for low cost support – foyers, refuges, sheltered housing etc.Budget transfer to LAs for high cost support
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Welfare Benefit and Tax Credit Changes
Council Tax Benefit – abolition April 2013not to be incorporated into Universal Credit (or Pension Credit)
LAs to devise scheme of support with 10% less but protecting pensioners and other vulnerable groups – average 19% burden on working age householders
cut in Salford of £2.64 million
approx. 18,000 households in Salford affected
possibilities – ‘equal pain’; no entitlement to certain groups; no ‘single person discount’ ?
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Welfare Benefit and Tax Credit Changes
Universal Credit – from October 2013Replaces
- Income Support
- Income-based Jobseekers Allowance
- Income-related Employment and Support Allowance
- Working Tax Credit
- Child Tax Credit
- Housing Benefit
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Welfare Benefit and Tax Credit ChangesUniversal Credit – features
single taper 65% (withdrawal as income increases)income disregards for some – short-term workcomponents that reflect current benefits/tax creditscomplex calculation of income assessment and housing costs – automatic feed from PAYEmaximum paymentmore stringent ‘conditionality’ + sanctionson-line claimstransitional protection (dual system for 5 years)
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Welfare Benefit and Tax Credit ChangesDisability Living Allowance
‘Personal Independence Payment (2013)
Aim– to achieve 20% reduction in number of recipients– to cut £1.075 billion by March 2016
Method– abolish low rate care component– new ‘points-based’ medical test– withdraw mobility component in residential care– greater use of aids/adaptations– getting around rather than walking
Impact– 10,880 working age recipients in Salford (Nov.’09)– 20% - 2,176 people– annual loss - £8 million (£10 million to local economy)– ‘knock-on’ effects to means-tested benefits/’in-work’ support
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Financial Pressures on Salford PeopleDeprivation
18th most deprived of 324 English local authorities
Child & Family Poverty30% children living in poverty; 20% in ‘severe poverty’ (Save the Children)
Home possessions2nd worst in GM for possession claims3rd worst in GM for possession orders
950 (9.7 per 1,000 households) in 2010closure Salford County Court (Aug.’11)
Debt (in the most deprived areas)6% households use loan sharks20% households had no bank account50% households pay fuel bills by a pre-payment method20% households rely on ‘sub prime’ finance
No savings (in the most deprived areas)88% lone parents; 76% ‘workless’ households; 74% tenants
Insurance (in the most deprived areas)50% households have no contents insurance (twice national figure)
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