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Universal Credit: welfare that works

Universal Credit: welfare that works . Welfare Reform White Paper November 2010 Terry Patterson, Greater Manchester Welfare Rights Advisers Group. ‘a radical new approach’. Combines income-related support into ‘a simple, integrated, benefit for people in or out of work’.

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Universal Credit: welfare that works

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  1. Universal Credit: welfare that works Welfare Reform White Paper November 2010 Terry Patterson, Greater Manchester Welfare Rights Advisers Group

  2. ‘a radical new approach’ • Combines income-related support into ‘a simple, integrated, benefit for people in or out of work’. • Basic personal amount (similar to current Jobseeker’s Allowance) with additional amounts for disability, caring responsibilities, housing costs and children. • As earnings rise, Universal Credit (UC) withdrawn at around 65p for each £ of net earnings. • ‘Higher earnings disregards will reinforce work incentives for selected groups’.

  3. How to include? • Disability • Caring • Disabled children • Mortgage interest • Childcare (Voucher, discount or additional earnings disregard?) • Upper age limit / allow dual system? (Pension Credit may include help with rent and an income-related element for dependent children) • National insurance credits

  4. Taper + Earnings Disregards • Dynamic Benefits report (Centre for Social Justice, 2009) strongly recommended 55% • 65% on net earnings = 76.2% on gross earnings rise for tax/NI payers • without children - no earnings disregard for single person, £10 a week for couple • with children or disabled = higher • But clawback on rent / mortgage interest to a ‘disregard floor’

  5. Conditionality + Sanctions • Extended conditionality regime • EG. Possible loss of JSA 3 months, 6 months, 3 years • Also changes affect existing out-of-work benefit recipients ahead of UC • Hardship payments – not for all sanction period – loans instead? • Mandatory Work Activity – ‘experiencing the habits and routines of working life’

  6. Claims + Change of Circumstances • ‘Digital First’ = internet, email • Back up = Phone • Last resort = face-to-face – possible role for Local Authorities (LAs)? • But face-to-face for conditionality (JCP)

  7. Processing • HMRC PAYE real-time collects earnings • DWP = process and get other details • Pay monthly and offer budgeting support • October 2013 – October 2017 roll-out • Based on ESA2 system = Accenture?

  8. Other issues • Work Programme - ‘personalised help’ • LAs may keep HB for supported / temporary accommodation • Social Fund Community Care Grants and Crisis Loans go to LAs • Passported benefits - use income thresholds not benefit • DLA – under review

  9. Fraud • “damaging social and media perceptions that ‘everyone is at it’” • £50 civil penalty if fail to report CoC • One strike / two strikes, etc • Recover fraud @ higher rates (25% up) • Fast track Direct Earnings Attachment • Widen debts recovery if official error

  10. And finally... • Contributory JSA “continues in its current form but with the same earnings rules as UC” • Assumed lowest income for self-employed is National Minimum wage for hours worked • UC will match labour market of part-time + flexible working patterns • ‘Progressive’ – average gains poorest 30% = £2-£4 a week • Welfare Reform Bill Jan 2011 + Equality Impact Assessment

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