Welfare Reform UpdateMarch 2013

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Welfare Reform Act 2012

The Act introduces a wide range of reforms to: – make the benefits and tax credits system simpler;– create the right incentives to get more people into

work;– protect the most vulnerable in our society: and– deliver fairness to those claiming benefit and to the

tax payer.

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Welfare Reform changes in 2013

April 2013

Size Criteria (under occupation penalty)

Changes to Council Tax Benefit

Social Fund Reform

Universal Credit

Phased rollout April 2013 – September 2013

Benefit Cap

Phased rollout April 2013 – October 2018

Personal Independence Payment

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Size Criteria (underoccupation)

Claimants will qualify for one bedroom

(up to a maximum of four)  for: – Every adult couple – Any other adult aged 16 or over – Any two children of the same sex aged under 16 – Any two children regardless of sex aged under 10 – Any other child aged under 16 – A non-resident carer (claimant/partner have disability

and need overnight care).

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Size Criteria (underoccupation)

• Size criteria will be introduced to Housing Benefit for working age claimants in the social rented sector from 1st April 2013

• Those considered to be under-occupying their accommodation will see a reduction– 14% of their total eligible rent for under-occupation by

one bedroom; and– 25% of their total eligible rent for under-occupation by

two bedrooms or more.

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Examples

Three bedroom house Rent = £60 plus service charges of £20 (£80 in total). £5 of the service charge is ineligible so total eligible rent for HB purposes is £75. Two examples

If Tom and Penny live in the property with James aged three and Polly aged one

Applying the size criteria means that the household is deemed to be under-occupying by one bedroom. A 14% reduction of £10.50 is applied to the eligible rent of £75 resulting in HB entitlement of £64.50.

If Mohammed and Aysha live in the property , they have lived their for 15 years and their three children have all now left home.

Applying the size criteria means that the household is deemed to be under-occupying by two bedroom. A 25% reduction of £18.75 is applied to the eligible rent of £75 resulting in HB entitlement of £56.25.

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Size criteria in Oldham

There are 8,791 working age Housing Benefits claimants in the social rented sector

Analysis suggests that 2,526 are under occupied • 2,064   by 1 bedroom • 462 by 2 bedrooms or more

For those under occupying • by 1 bedroom the average reduction in eligible rent will be

£11 per week• by 2 bedrooms or more the average reduction in eligible rent

will be £21 per week

We estimate the total reduction in HB to be £1.7m per annum

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What are we doing? • Key area of focus for Oldham Housing Investment

Partnership (OHIP) and established a Welfare Reform Working Group

• Agreed Data Sharing Protocol and exchanged data • Agreed Joint Communications Plan

• Looking to provide tenants with Financial and budgeting support

• Monitoring the impact on own organisations

• Looking at Discretionary Housing Payments

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Discretionary Housing Payments

• Oldham allocation for 2012/13 was £173k for 13/14 that has increased to £498k

• Funding allocated to local authorities to support those affected by the size criteria and the benefit cap

• £30m for the size criteria funding priorities– £25 million to assist those who live in significantly adapted

accommodation due to someone in the household having a disability.

– £5 million to assist foster carers, including those between placements.

• New DHP policy

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Council Tax Benefit replaced by local scheme

• Reduction in funding to local authorities – £3m reduction in funding (which includes £400k for the fire

and police preceptors)– £1m additional income will be raised from Council Tax

changes to empty properties and second homes – £2m less available to pay in benefit

• 10,786 claimants of Pension Credit Age are protected

• 12,916 households will have Council Tax to pay for the first time

• 4,209 households will have an increased amount to pay

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Oldham’s scheme for working age claimants

• Approved at full council on 12th December 2012

• The method of calculation will be similar to the current Council Tax Benefit Scheme i.e same rules for income capital and non-dependent charges.

• What’s different – Benefit will only be calculated based on the Band A Rate of

Council Tax (this will affect all claimants in Band B or above)– Benefit entitlement will be reduced by 25% – Second adult rebate will be abolished

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Local Welfare Provision

• Abolition of Crisis Loans for living expenses and Community Care Grants paid by DWP Social

Fund

• New emergency provision for vulnerable groups

• Council has approved a new scheme which will include – preventative measures – supply of goods – cash in exceptional circumstances only

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Universal Credit

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Personal Independence Payment

Universal Credit

Simplifying a complex system

Child Benefit, Carer’s Allowance (will remain)

Income Based JSAIncome related ESAIncome Support Working Tax CreditsChild Tax CreditsHousing Benefit

Disability Living Allowance

Contributory JSA and ESA (conditionality rules changing)

Council Tax Benefit (Localised Council Tax Support Schemes)

Current system

Pension Credit… to include support for housing

and children

Future system

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Universal Credit is

A policy

A benefit

A gateway

A platform

An ambition

that tackles welfare dependency, poverty and worklessness by making work pay

that replaces a complex system of working-age benefits and credits with the Universal Credit and a single set of rules

that together with employment support programmes, helps people into work

that will help deliver an internet-age service whilst continuing face-to-face support for those who need it

reforming welfare to transform lives

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Why Universal Credit?

• DWP are aiming to simplify a complex system of multiple benefits:

– the current system has over 10,000 pages of guidance for advisors

– it is expensive to administer

• It aims to make work pay:

– more help for low income working families

– claimants will keep more of what they earn

– improving incentives to increase hours of work

– simplified system will make moving to work feel less ‘risky’

Universal Credit implementation – key dates

APRIL 2013

From OCT 2013

During 2014

2017

Pathfinder begins

National introduction of Universal Credit starts – gradual introduction and testing of further scope and functionality, and phasing out of claims for

existing benefits

Expansion - new claims from people in work and moving current claimants to Universal Credit in

phased approach

Universal Credit roll-out complete

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Universal Credit – implementation and transition challenge

To deliver this DWP need to:

• convert 12 million claims to 8 million household accounts

• create a digital platform that both meets the needs of people who are used to managing their lives online, whilst helping claimants who need extra support to get online

• ensure the right support for claimants

• create a system capable of flexibility and continuous improvement

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Live Innovation Trialling (started in April 2012)• to trial components of the end-to-end Universal Credit service

proposition in a live environment with real people in real time

Model Office (first took place in April 2012)• a series of incremental, integrated tests in a ‘controlled’

environment that will be built as the Universal Credit system, processes and support products are developed

Direct Payment Demonstration Projects (started June 2012)• will test key elements of incorporating housing support into

Universal Credit whilst protecting the financial position of social landlords

Testing before delivery

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Local Authority-led pilots (to start Autumn 2012 – end September 2013)

• will test service integration, particularly design of face-to-face service delivery, at local level for improved claimant support and work focus

Pathfinder (from April 2013 in Greater Manchester and Cheshire)• an early implementation of Universal Credit – to enable DWP to

learn from experience and build confidence

Testing before delivery

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Oldham

and

Universal Credit

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Pathfinder

• Pathfinder will take place from 29th April 2013.

•It will test new payment system with local authorities, employers and claimants in a live environment – before national roll-out.

•Will target single, newly unemployed people, with or without rented housing costs, in Oldham, Tameside, Wigan, and Warrington.

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Pathfinder

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Oldham UC Face to Face Pilot

Objectives

1. Raise awareness of Universal Credit through the development of a comprehensive Communications and Marketing Plan

2. Support residents to access services online by providing access to computers, developing skills and building confidence in using self serve facilities

3. Provide residents with access to financial and budgeting support and debt advice 

4. Identify residents with complex needs and assess the level of support required

5. Support residents to access employment 

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Oldham’s Universal Credit Timeline Date Claimant group

November 2012 Local Authority-led (face to face) pilot commenced

April 2013 Pathfinder commences with a limited group of new JSA claimants

October 2013 Roll out commences for a wider group of new JSA claimants

January 2014 New Working Tax Credit and Child Tax Credit will be claims for UC

April 2014 New IS, ESA and HB claims will be claims for UC

July 2014 Managed migrations with priority given to those who will benefit most from the transition

From 2015 - 2017

A gradual managed transfer of the remaining claims

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Key issues

• Monthly payment (in arrears)

• Paid to one person in the household

• Rent will no longer be paid direct to landlords , except in ‘exceptional circumstances’

• On-line application and claims management

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Benefit Cap

The cap will be set at – £500 per week for couples and lone parents – £350 per week for single claimants.

Will not apply to those receiving –Working Tax Credit –Disability Living Allowance –Personal Independence Payment (from April 2013) –Attendance Allowance –Industrial Injuries Benefits –Employment and Support Allowance (support component )–War Widow's or War Widower's Pension

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Benefit Cap Introduction

• Phased roll-out – From April 2013, starting in four local authorities in London –

Bromley, Croydon , Enfield and Haringey.– All other Local Authorities will begin to apply the cap from

15th July 2013 and roll out will be complete by end of September 2013.

• Phased roll-out allows:-– Testing of DWP systems and processes– Ensures the supporting products and services for both staff

and claimants are effective – Allows DWP to build capacity to learn and respond to issues

raised in the initial phase of rollout to inform national rollout.

NEW

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An introduction to Personal Independence Payment

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A new benefit for disabled people is being introduced

• Personal Independence Payment (PIP) will replace DLA for eligible claimants aged 16 to 64 from 8 April 2013

• It is part of a wider reform of the welfare system

• It remains non means tested and non taxable, and is payable both in and out of work

• It will include an assessment of individual needs and introduces more consistent use of supporting evidence

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PIP is designed to help with additional costs PIP is to help towards some of the extra costs arising from ill health or

disability

It is based on how a claimant’s condition affects them not on what condition they have

There is a three month qualifying period (the time a condition or ill health has existed before a claim is made) and a nine month prospective test (the amount of time a condition or ill health is expected to last when a claim is made)

Awards will be reviewed to make sure the assessment continues to reflect the claimant’s needs

Reviews will be at appropriate intervals depending on how likely it is for their condition or impairment to change

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Updated implementation timetable NEW

Date Claimant Group

8 April 2013 New claims in specific postcode areas in the North West and part of the North East of England

June 2013 New claims for from all parts of the country

October 2013 Existing DLA claimants will be invited to apply for PIP - Children turning 16 - People reporting changes of circumstances which would affect their rate of payment (does not include those going into a care home, hospital or prison or change of address) - Fixed-term DLA award recipients whose award expires from the end of February 2014 - Self-selectors (includes those with indefinite or fixed- term awards).

October 2015 to October 2018

All remaining claimants in receipt of DLA will be randomly selected and invited to make a claim for PIP

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PIP has two components with two different rates

Personal Independence Payment is made up of a:

– Daily living component

– Mobility component

Awards will be made up of one or both of these components

Each component will have two rates:

– Standard

– Enhanced

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The proposed level of points needed for an award of PIP

Daily living component (activities 1-10) Mobility component (activities 11-12)

Standard rate = 8 pointsEnhanced rate = 12 points

Standard rate = 8 pointsEnhanced rate = 12 points

Activity Possible points

Activity Possible points

1. Preparing food 0-8 11. Going out 0-12

2. Eating and drinking 0-10 12. Moving around 0-12

3. Managing your treatments 0-8

4. Washing and bathing 0-8

5. Managing your toilet needs 0-8

6. Dressing or undressing 0-8

7. Communicating 0-12

8. Reading 0 - 8

9. Mixing with others 0-8

10. Making decisions about money 0-6

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There are 5 key stages to a new claim for PIP

1. Thinking about claiming – Information will be available online, leaflets and through support organisations

2. Making a claim – A claim will be made by a telephone call to DWP initially and an application form will be posted out. Claiming online will be available from Spring 2014.

3. Application -The claimant or their support will complete the claim form and post back to DWP with any supporting evidence.

4. Assessment – Most people will be asked to attend a face to face consultation with a health professional. They can take someone along for support.

5. Decision – A decision will be made by a DWP Case Manager on entitlement including level and length and of award.

Existing DLA claimants will be invited to claim PIP individually

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Reassessed DLA cases by likely outcome of award under PIP

Outcome Number of claimants %

Award increased 510,000 29Award unchanged 270,000 16Award decreased 510,000 29No award 450,000 26Total 1.74 million

DWP 19/12/12

NEW

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What are we doing?• Raising awareness and seeking opportunities to work

together • We have an action plan and communications plan • Working with wide range of stakeholders in the Borough • Working closely with DWP• Preparing a draft local welfare scheme for consideration• Reviewing the Discretionary Housing Payment Policy• Linking into Welfare Rights Take Up Activities and

Council’s other campaign e.g energy switching • Appointing two new Welfare Rights Officers

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Communications Activities - strategy

The campaign will take a two tiered approach:

1. Multi channel promotion across the borough utilising all external and internal communications and marketing opportunities. This will include Borough Life, social media, district screens, online, print and direct mail, partners, advertising and media.

2. Delivery of targeted ‘drop in’ events (in areas that will be significantly impacted by WR) run in partnership with other local agencies, councillors and other departments. An event ‘toolkit’ will be developed to enable these events to be delivered.

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Communications Activities – strategy cont

The campaign will run in two phases:

1. Pre - changes: January – April 2013. Raising awareness / encouraging residents to make preparations

2. Post changes: April 2013 onwards Impact of WR changes will be real and felt by residents, messages will be tailored accordingly

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Communications Activities – campaign identity

A campaign identity will be established to ensure, as far as possible, a level of brand awareness in residents:

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Communications Activities – key messages

• There are two key messages:Benefits are changing (Welfare Reform details)

Make sure you’re prepared (support offer – see below)

• There will also be an overarching message of ‘make the most of your money’. This will signpost residents to money saving opportunities such as the Energy Switching Scheme, Oldham Credit Union, Fairs Fair Campaign, The Co-operative Shop etc. www.oldham.gov.uk/yourmoney

• Signposting will also direct residents to other support mechanisms such as debt advice, skills and training, family budgeting courses, counselling services etc.

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Communications Activities –www.oldham.gov.uk/yourmoney Includes:

• Money matters – benefits and debt advice, savings and loans etc

• Jobs, training and courses – jobs, training, apprenticeships, work experience, volunteering and learning courses etc

• Housing – mortgages, mortgage rescue, renting, homelessness, council housing etc

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Communications Activities –www.oldham.gov.uk/yourmoney

• Family and emotional support – support for families and counselling services to help you cope

• Ways to save money – advice, tips and tricks to help you save money

• Free activities – have fun on a budget

Drop in events will be promoted on both Welfare Reform and Your Money pages

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How can you help?

• Help us to identify and support those affected • Signpost people to the Council’s website • Promote the events that are taking place• Let us know if you are interested in getting involved

the Universal Credit Pilot we are looking for Community Champions who can support online access

• Let us know your ideas!

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Any Questions