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Welfare Benefit and Tax Credit Changes

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.

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Welfare Benefit and Tax Credit Changes

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  1. 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 Support Group Work-related Activity Group IB/SDA ‘Fit for work’ JSA or nothing Salford Welfare Rights and Debt AdviceService

  2. Salford Welfare Rights and Debt AdviceService

  3. Welfare Benefit and Tax Credit Changes • Housing Benefit – all tenants • April ’11 – non-dependent deductions increased • April ’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. rooms • April ’11 – max 4 rooms (68 existing families in Salford – 9 month protection) • April ’11 – LHA rates based on 30th percentile • April ’11 – non-dependent deductions increased • Jan. ’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 tenants • reduction if ‘under-occupying’ (impact on Salix + RSLs) • Supported Employment • Supported 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 affected • Oct.’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 Salford Welfare Rights and Debt AdviceService

  4. Welfare Benefit and Tax Credit Changes • Council Tax Benefit – abolition April 2013 • not 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’ ? Salford Welfare Rights and Debt AdviceService

  5. Welfare Benefit and Tax Credit Changes • Universal Credit – from October 2013 Replaces - Income Support - Income-based Jobseekers Allowance - Income-related Employment and Support Allowance - Working Tax Credit - Child Tax Credit - Housing Benefit Salford Welfare Rights and Debt AdviceService

  6. Welfare Benefit and Tax Credit Changes • Universal Credit – features • single taper 65% (withdrawal as income increases) • income disregards for some – short-term work • components that reflect current benefits/tax credits • complex calculation of income assessment and housing costs – automatic feed from PAYE • maximum payment • more stringent ‘conditionality’ + sanctions • on-line claims • transitional protection (dual system for 5 years) Salford Welfare Rights and Debt AdviceService

  7. Welfare Benefit and Tax Credit Changes • Disability 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 Salford Welfare Rights and Debt AdviceService

  8. Financial Pressures on Salford People Deprivation • 18th most deprived of 324 English local authorities Child & Family Poverty • 30% children living in poverty; 20% in ‘severe poverty’(Save the Children) Home possessions • 2nd worst in GM for possession claims • 3rd worst in GM for possession orders 950 (9.7 per 1,000 households) in 2010 • closure Salford County Court (Aug.’11) Debt(in the most deprived areas) • 6% households use loan sharks • 20% households had no bank account • 50% households pay fuel bills by a pre-payment method • 20% 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) Salford Welfare Rights and Debt AdviceService

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