A benefits briefing for Quakers
Introduction by Jez Smith: This benefits briefing is intended for Quakers as a reference point who have an interest in all the changes that are happening across the welfare state. It is not passing comment, but stands as an opportunity for those who are concerned about the changes to see the larger picture. I hope that it will be useful to Friends who are trying to understand and respond to the changes taking place in our society. This briefing is not a substitute for professional advice for anyone who has a query about their own situation. I am very grateful to Catherine for sharing this briefing with Nayler.
Note that there is a glossary at the end of this briefing.
There are lots of changes
These are happening at different times
They impact on different people to different extents (changes are being marketed as impacting on the work shy – that is not the whole story)
The story so far
- Introduction of local housing allowance (LHA) cap &and reduction of LHA rates and increase in non dependant deductions – restricts housing benefit for all;
- Shared accommodation rate extended 25 to 35 year olds – restricts housing benefit to all under 35;
- Incapacity benefit moving to Employment Support Allowance (ESA) – means people being reassessed;
- Working tax credits – number of hours worked to be eligible increased & other changes;
- Child tax credit – reduction of income limit & other cuts;
- Lone parents expected to look for work once child is 5;
- Loss of educational maintenance allowance (EMA) & some maternity benefits;
- Restrictions to contributory benefits – receipt of contribution based work related ESA restricted to one year (contribution based JSA already restricted to 6 months);
- Freezing of certain benefits such as child benefit.
What’s next in 2013
JAN Child benefit – families with high rate tax payer begin to lose entitlement.
APRIL Benefit cap.
APRIL Council tax benefit replaced by localised support for Council tax.
APRIL Social sector size criteria applied (bedroom tax).
APRIL Councils take over social fund for crisis loans and community care grants.
APRIL LHA increases – will be pegged to the CPI as opposed to RPI (generally lower).
APRIL on DLA replaced by new personal independence payments (PIP).
OCT on Universal credit was originally envisaged to be ‘introduced across UK from October 2013’. This was revised to ‘starting on a small scale in every region from October 2013 and building up capacity to April 2014, when all new claims to the current benefits and credits will be entirely phased out’. This will now be revised again by the Department for Work and Pensions (DWP) and the new timeframes will be issued at the end of January 2013.
- Benefit cap £350 for single people £500 for couples or lone parents per week. The cap includes housing benefit and remains the same regardless of how many children someone has. If a household’s total benefits (some exclusions such as council tax benefit) do come to more than £350 or £500 a week, then any benefits received over the cap will be taken out of their housing benefit. Applies to all those of working age on out of work benefits listed in appendix (exclusions for those on disability benefits – see below) and there is no transition period.
- Council tax benefit replacement – each council will have its own scheme and reduced funds but those of pension age cannot be asked to pay more, so it is possible that all those of working age on benefit will be asked to pay some council tax.
- Crisis loans/community care grant locally managed – no idea how this will work!
- Bedroom tax/restricted increases to LHA – continues to pile on pressure whether people are housed privately or with a social landlord.
- Personal independence payment – gradual introduction starting with new claims in Northern England April 2013; transfer of all DLA claims scheduled for Jan 2014. Is being introduced to save money (budgeted for 20% saving) and expected that most people on lower rate DLA will lose this and therefore become subject to benefit cap.
- Universal credit – one benefit to replace the benefits listed in the appendix. Expected to claim on-line and will be paid monthly in arrears. Timeframes are changing again.
Who is affected?
|Working||Working age on out of work benefits||Pension age||Disabled|
|Benefits cap||Not affected if qualify for working tax credit. If not working sufficient hours the cap hits – see appendix for rules||Yes, unless member of household in receipt of DLA/PIP, Attendance allowance, support component of ESA or industrial injuries benefit||No||OK if in receipt of DLA/PIP, Attendance allowance, support component of ESA or industrial injuries benefit|
|Council tax benefit change||Depends on scheme probably yes||Depends on scheme probably yes||No||Depends on scheme|
|Bedroom tax (applies to those in social housing)||Yes||Yes||No||Spare bedroom is allowed for a carer to stay o/night for the benefit claimant, not necessarily for a relative/child. A disabled child does not necessarily qualify for their own room.|
|Universal Credit||Yes||Yes||No||Yes (if claiming other benefits)|
Person A lives in a housing association property and is on income support and carer’s allowance because she cares for her daughter who lives nearby. Her housing association rent is low and so she is under the benefit cap. But she moved into this property 14 year ago when she had 4 children, they have now all left home and she will be hit by the bedroom tax. She is also likely to have to pay some council tax. There are exemptions for people with disabilities but not for their carers. To care for her daughter she needs to live near to her.
Person B, her husband, disabled mother and 5 dependant children have recently been rehoused into a local authority tenancy from temporary housing. The couple receive income support including a disability premium. Their new rent is £124 per week and they receive £478.60 of other benefits (mainly relating to their 5 children). This totals £602.60 so it is possible they will loose £102.60 from their housing benefit from 1 April 2013. It is also likely they will have to pay some council tax.
- receipt of a disability premium is not enough to prevent the cap from applying client would need to receive DLA or the support component of ESA;
- the mother receives attendance allowance but we are not sure if she counts as part of the household;
- if the family are unable to sustain their tenancy because of the impact of the cap we don’t know if they will be deemed to be intentionally homeless;
- Mrs B wants to fund the furniture she has bought for her new house, she was refused CCG so borrowed from a cousin.
Person C is a pensioner and has lived in the same block for 15 years. She has a lovely neighbour who does some cooking and shopping for her. She worked and has a small occupational pension so gets partial housing benefit. The landlord has just put the rent up over the LHA cap. She cannot find anywhere locally for a cheaper rent and says lots of landlords won’t now take anyone in receipt of housing benefit.
Appendix & glossary
|LHA||Local housing allowance||Housing benefit usually paid to people who live in private rented accommodation. The benefit will only ever be paid up to the LHA limit for the area and for the appropriate size of property for the household.|
|NDD||Non dependant deductions||Money deducted from people’s housing benefit and council tax benefit if they have non-dependants living with them (child over 18, friend or relative).|
|N/A||Shared accommodation rate||The appropriate size of property for most people under 35 is deemed to be shared accommodation and therefore the LHA limit is set at this rate.|
|ICB||Incapacity benefit||Or sickness benefit – everyone on this being moved to Employment Support Allowance.|
|ESA||Employment support allowance||Replaces earnings for people who are unable to work because of illness or disability. Initially paid at an assessment rate and then with either a work related or support element. Only those in receipt of the support element count as receiving a disability benefit.|
|CTC||Child tax credit||Payment related to children received by those out of work or on lower incomes.|
|WTC||Working tax credit||See more detail below.|
|EMA||Educational maintenance allowance||Was for students 16-18 from low income households to encourage them to stay in education, has been replaced by bursary systems run by individual colleges/schools.|
|JSA||Job seekers allowance||Benefit paid to eligible people who are currently unemployed and looking for work.|
|DLA||Disability living allowance||Non means tested benefit for those with mobility or care and supervision needs where application made by under 65s.|
|AA||Attendance allowance||Non means tested benefit for those with care and supervision (not mobility) needs where application made by those aged 65 and over.|
|PIP||Personal independence payment||Replaces DLA for those aged 16 to 64.|
|N/A||Contributory benefits||Where one has been employed (not self employed) & paid National Insurance then will qualify for certain benefits regardless of assets/partner’s income etc.|
|IS||Income support||For those on low incomes and not working or working few hours who are lone parents (but depends on age of child), carer or in some cases, unable to work because they are sick or disabled (very few cases now).|
Out of work benefits are:
- Income support
- Job seekers allowance
- Employment support allowance – work related element (& presumably assessment phase but not clear on this point)
The benefit cap will not apply if the claimant works sufficient hours to qualify for working tax credit even if the entitlement is nil nor will it apply if the claimant or anyone in the household receives:
- Disability living allowance
- Attendance allowance
- Personal independence payment
- Support component of Employment support allowance
- Industrial injuries benefit
The hours you need to work to qualify for working tax credit
|Single or in a couple, no children, over 25||30 hours|
|Single with a child, over 16||16 hours|
|In a couple with one or more children, over 16||24 hours in total one person must work at least 16 hours|
Note: also provisions for over 60s or those with disabilities not listed here
Universal credit replaces:
- Income Support
- Income Related Jobseeker’s Allowance
- Income Related Employment Support Allowance
- Housing Benefit
- Working Tax Credit
- Child Tax Credit
This benefits briefing was produced by Catherine Utley who worships at Tottenham Meeting (North London Area Quaker Meeting).