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Welfare Reform

Major Legislative changes are being made which will change the way people will apply and receive benefits. The Welfare Reform Bill 2011/2012 was passed by the UK Parliament on 8th March 2012. The three changes which may have the most affect on our members are:

1. Housing Benefit / Local Housing Allowance

If someone is currently claiming Housing Benefit and living in the Social Rented Sector (Housing Association or Local Authority), there are a number of proposed changes that may impact upon the amount of benefit they receive:

Non-Dependent Deduction

As of April 2011, if the tenant has a non-dependent living with them (someone who is over 18) then their Housing Benefit will be reduced with the reduction being calculated based on the employment status and income of the non-dependent. There are also a number of exemptions to the change laid out meaning that, in certain circumstances, the deduction will not be applied.

Under-Occupancy Rules

As of April 2013, people’s Housing Benefit will be calculated based on the size of property that they need. This will mean that tenants who are under-occupying their property or living in a house deemed too big for their needs will have their Housing Benefit payments reduced. For example, a single person living in a two bedroom house will only receive Housing Benefit for a one bedroom house. If the tenant wishes to stay in the house they will have to make up the shortfall in rent.

If someone is currently claiming Local Housing Allowance and living in the Private Rented Sector there are a number of proposed changes that may impact upon the amount of benefit they receive:

Caps to Local Housing Allowance

A maximum amount has been set for Local Housing Allowance Rates depending on the size of accommodation people live in. As of April 2011 the Local Housing Allowance rates for Glasgow were amended and are currently:

  • £63.46 for shared accommodation
  • £91.15 for one bedroom
  • £114.23 for two bedroom
  • £132.69 for three bedroom
  • £196.15 for four bedroom

If someone's rent is above this rate (or if they live in a larger home with more than four bedrooms) and they want to continue to stay in the house they will be liable to make up the shortfall.

Shared Accommodation Rate

The Shared Accommodation Rate with the Local Housing Allowance has been extended to everyone up to the age of 35, with a small number of exemptions. This means that everyone aged under 35 will be restricted to the rate for a single room in a shared house rather than the rate for a self-contained one bedroom home. Those exempt from the extended Shared Accommodation Rate are:

  • Homeless people who have lived in hostel accommodation for a least three months;
  • People receiving severe disability premium of DLA;
  • People who require an overnight carer.

2. Employment and Support Allowance

From 27th October 2008 Employment and Support Allowance (ESA) replaced Incapacity Benefit and Income Support paid on incapacity grounds for new customers. People are either placed in the Work Related Activity Group – if they are assessed as capable of work if support is provided, or the Support Group – if they are assessed as being unable to work due to illness or disability. People still claiming Incapacity Benefit are currently being re-assessed under the terms of ESA with plans to have this process completed by March 2014.

3. Universal Credit

From October 2013 Universal Credit replaces income based Job Seekers allowance, income based Employment Support Allowance, Income Support, Child Tax credits, Working Tax credits, Housing Benefits and Budgeting Loan elements of the social fund. Universal Credit will be one payment, paid 4 weekly in arrears The payment will depend on all elements of the claim being processed and the payment will not be made until this occurs.

THE MINISTER FOR WELFARE REFORM, LORD FREUD, HAS ANNOUNCED THAT, WHILE THE GOVERNMENT REMAINS COMMITTED TO THE PRINCIPLE OF DIRECT PAYMENTS, THREE LEVELS OF PROTECTION WILL BE INTRODUCED FOR PEOPLE RENTING THEIR HOMES:

  • DECISIONS ABOUT WHETHER TENANTS SHOULD RECEIVE DIRECT PAYMENTS WILL BE MADE IN COLLABORATION WITH SOCIAL LANDLORDS;
  • IF ARREARS BUILD UP TO THE EQUIVALENT OF ONE MONTH'S RENT THE DECISION TO MAKE DIRECT PAYMENTS WILL BE REVIEWED;
  • IF ARREARS REACH THE EQUIVALENT OF TWO MONTHS RENT, THE CLAIMANT WILL HAVE HOUSING PAYMENTS SWITCHED TO THE LANDLORD, OR MANAGED PAYMENTS.

4. Successor Arrangements for Passported Benefits

The Scottish Government is currently consulting on issues relating to welfare benefits controlled from Scotland, such as free school lunches, blue badge scheme and concessionary travel. These are known as Passported Benefits and eligibility for claiming them is normally based upon receipt of certain other benefits such as Income Support or JSA. With the change to Universal Credit and Personal Independence Payments the existing eligibility criteria will have to be changed and Government is looking at how best to make these changes while retaining simplicity of access.

5. Household Benefit Cap

Household Benefit Caps will come in to effect on 1st April 2013, in preparation for Universal Credit role out in October 2013. The Household Benefit Cap will mean that benefit entitlement will be capped at £350 per week for single people and £500 per week for couples and families. If an individual or family receives more than the capped amount the monies will be deducted from their Housing Benefit award.

6. Scottish Welfare Fund

On 2nd April 2013 the Community Care Grant and Crisis Loan elements of the Discretionary Social Fund were devolved to the Scottish Government. The new Scottish Welfare Fund will consist of Community Care Grants and Crisis Grants and will be administered by Glasgow City Council. Applications to the fund, in Glasgow, should be made by telephone to the Grants Service Team on 0141-276 1177.

7. Job Seekers Allowance – Digital by Default

As of 5th April 2013, anyone who wishes to make a new or repeat Job Seekers Allowance claim will be assessed to find out if they are able to do this online. When a claimant calls to make a new claim the Advisor will assist them to find online access in their local area or book them an appointment to use a computer in their local Jobcentre.

You may also be interested in GHN's "Welfare Reform Policy Briefing".