DWP Update - summer 2012 .

1. DWPUpdate - summer 2012. An update for external stakeholdersJuly 2012 Version 0.71– 13 July 2012

2. Department of Work and Pensions • The Department of Work and Pensions is responsible for welfare and pensions policy. • It is the biggest public sector department in the United Kingdom and serves 20 million people.

3. Introduces the most fundamental reforms to the social security system for 60 years. Aims for a simpler, fairer benefits system & to ensure work pays Benefit Cap Universal Credit Personal Independence Payment Social Fund changes State Pension Welfare Reform Act - overview

4. Benefit cap • Limits benefit payments to a household to no more than average household earnings – currently equivalent to a gross salary of £35,000. • Cap excludes one-off payments and non-cash benefits. • Exemptions for households including recipients of Disability Living Allowance, Attendance Allowance or Industrial Injuries Disability Benefit. • War widows/widowers and those in ESA Support Group also exempt. • Those entitled to Working Tax Credit exempt. • Effective from April 2013 – already contacting individual claimants in those households likely to be affected offering support to find work. • An online calculator is available at www.direct.gov.uk/benefitcap

5. Will replace a range of income-related working age benefits with a single payment that provides both in-work and out-of-work support Designed to ensure that work will always pay Expect Universal Credit to begin in 2013, with existing claims transferred to the new system by the end of 2017 Tougher sanctions regime will be introduced ahead of Universal Credit Aspects of the Social Fund will be incorporated within Universal Credit while others will be delivered by Local Authorities in England and devolved administrations in Scotland and Wales Universal Credit - overview

6. Preparatory tests this year. Expect Universal Credit to begin in 2013. 2014-15 – begin moving those existing claimants with most to gain from being on UC. 2016 & 2017 – transfer other existing claims to UC. Migration based on local authority boundary. Universal Credit - timetable

7. Simplifying a complex system Current system Income related JSA Income related ESA Income Support (including SMI) Working Tax Credits Child Tax Credits Housing Benefit UniversalCredit Disability LivingAllowance Personal Independence Payment … to include support for housing and children Pension Credit Child Benefit, Carer’s Allowance (will remain) Council Tax Benefit (Localised Council Tax Schemes) Contributory JSA and ESA (conditionality rules changing)

8. DLA reform – Personal Independence Payment overview • Replaces DLA with a new benefit to be introduced for eligible working age people (16-64) called the Personal Independence Payment • Retains the key features of DLA - non means tested and non taxable • More objective assessment process, including a face to face consultation with a health professional for most claimants • Public consultation regarding new assessment criteria ran to end April 2012 • Consultation on regulations and detailed design ran to end June 2012

9. DLA reform – Personal Independence Payment timetable Personal Independence Payment is being introduced in stages: • April 2013: Initially take a few thousand new claims in areas including Merseyside, North West England, Cumbria, Cheshire and North East England • During this period new claimants in all other parts of the country will continue to claim Disability Living Allowance as now • June 2013: We plan to take new claims from all claimants in all parts of the country • Oct 2013: Begin to reassess about 30,000 mostly randomly selected existing DLA cases • Jan 2014: Full national reassessment likely to begin • March 2016: All current DLA claimants of working age will have been contacted about claiming Personal Independence Payment

10. Daily Living Mobility Enhanced Enhanced 12points Standard Standard 8 points Not Entitled Not Entitled Components and Eligibility • PIP will be made up of two components – daily living and mobility • Each can be paid at standard rate, or enhanced rate for those with the greatest needs • The PIP assessment criteria will consider the individuals’ ability to carry out a range of everyday activities • Individuals will receive a point score for each activity, depending on how well they can carry them out and the help they need to do them • Each activity carries a possible eight to fifteen points for those with the most restricted abilities • The total scores for each component suggest whether a component is payable, and if so, whether at the standard or enhanced rate

11. Assessment Criteria Daily Living Components (activities 1-9) Mobility Components (activities 10-11) Standard rate = 8 points Enhanced rate = 12 points Standard rate = 8 points Enhanced rate = 12 points • Activity • Preparing food and drink • Taking nutrition • Managing therapy and monitoring a health condition • Bathing and grooming • Managing toilet needs or incontinence • Dressing or undressing • Communicating • Engaging socially • Making financial decisions Standard 0 - 8 0 -10 0 – 8 0 – 8 0 – 8 0 – 12 0 – 12 0 – 8 0 - 6 • Activity • Planning and following a journey • Moving around Standard 0 – 15 0 - 15 Please note that these draft criteria are subject to change following consultation – the final draft will be published this Autumn

12. Social Fund Reform • Existing Social Fund been in place over 20 years – not kept pace with wider welfare reform. • From April 2013: • Community Care Grants and Crisis Loans for general living expenses will be abolished. Funding will be transferred to local authorities in England and to the Devolved Administrations in Scotland and Wales to establish alternative provision. • Crisis Loans for alignment to benefit and Interim Payments of benefit will be replaced by Short Term Advances of benefit and will be administered by DWP from April 2013 • From October 2013: • Budgeting Loans will be replaced by Budgeting Advances and be paid as part of Universal Credit. (From April 2013 in UC Pathfinder areas.) • Regulated Social Fund (Funeral Payments, Sure Start Maternity Grants and Cold Weather Payments) will continue with Universal Credit as a qualifying benefit.

13. The Pensions Act puts into law changes to the State Pension age timetable. From April 2016, women's State Pension age will rise faster than originally planned, equalising with men's at 65 by November 2018. Between December 2018 and October 2020, men and women's State Pension ages will be increased from 65 to 66. Under the current law State Pension age will already increase to: 67 between 2034 and 2036 68 between 2044 and 2046 The Government is considering how the State Pension age should be changed in the future and have announced that State Pension age will now increase to 67 sooner between 2026 and 2028. This change to the timetable is not yet law and will be subject to Parliamentary scrutiny when legislation is introduced. Changes to State Pension Age

14. Simple Payment update • Phasing out cheque payments this year. • Simple Payment service roll-out from this summer • Customers & representative groups aided service design. • Electronic transfer of funds – safe and secure. • Regular users: plastic “Simple Payment” card. • Second card for use by regular carers/friends/family. • Facility for irregular carers to collect money for claimant. • Irregular (& one-off) users: “e-Payment” number. • Present card, memorable date & and ID at PayPoint outlet – No PINs required. • Consider payment options now - move to payment into account if preferable

15. Any Questions ?