Much has been said about the Welfare Reform Bill which went through the House of Commons yesterday. Given all the comment, I thought it would be useful to set out the perspective from the Coalition Government.
It is worth noting that the Chancellor recently announced an benefit increase across the board of over 5%, the biggest increase for many many years. At a time, when there have been cuts in almost every other area - except pensions and the NHS - this was hardly the action of a Government that seeks to ignore its commitment to the most vulnerable.
In 2010-11, the taxpayer spent £201 billion on welfare and pensions payments - an enormous amount.
In summary, The Welfare Reform Bill introduces a number of significant changes:
- Introduction of Universal Credit, a single integrated benefit payment.
- Implementation of cap on the total amount of benefit people can receive.
- Time limiting how long people can receive contribution based Employment & Support Allowance (ESA).
- Replacing Disability Living Allowance (DLA) with a new Personal Independence Payment (PIP).
- Reforming the Child Support Agency so more parents develop their own maintenance arrangements and the introduction of charging for those unable to reach agreement.
- Reform of the Social Fund.
I will look at each of these areas in turn.
THE BENEFIT CAP
The primary purpose of this Bill was to cap the amount of welfare benefits that can be received - at £26,000 a year. This is non-taxable and equivalent to someone working and earning £35,000 a year before tax. £500 pound a week is a reasonable amount of money, and is seen by most taxpayers as fair.
It is important to remember that welfare benefits, whilst absolutely necessary for those in real need, are paid for through taxes from those in work - many of whom earn much less than £26,000 a year.
Ultimately, it is not fair that some people should receive a greater income from benefits than the average weekly wage for working households – in some cases, more than double the average household income.
UNIVERSAL CREDIT
With five million people trapped on out of work benefits and almost two million children growing up in homes where nobody works, we cannot afford to simply continue tinkering around the edges of the welfare system.
Of the 5 million people who are stuck on out of work benefits in the UK, 1.4 million have been receiving out of work benefits for 9 out of the last 10 years.
Britain now has one of the highest rates of workless households in Europe, with 1.9 million children living in homes where no-one has a job. There are 900,000 people who have spent at least 10 years claiming Incapacity Benefit, while the cost of Incapacity Benefit alone since 2000 has been almost £135 billion.
Universal Credit will mean that those seeking work will be able to continue to claim some benefits, instead of losing them at the moment.
UNDER OCCUPATION OF HOUSING
At present there are around five million people on the social housing waiting list.
Social housing must be far more focused on need: housing benefit is paying for 1 million spare rooms at the same time that there are 250,000 social tenants in overcrowded accommodation.
The Government will increase funding for the Additional Discretionary Housing Payment to help the most vulnerable people.
Currently, we pay more in Housing Benefit per year than we spend on the army and navy combined, and more than we spend on the Police. Costs have increased from £10.7 billion in 2005/06 to £15.7 billion in 2010/11. Without reforms, the Government says the Housing Benefit budget is projected to reach a huge £24 billion in 2014/15.
EMPLOYMENT & SUPPORT ALLOWANCE
It is an important principle of the Welfare system that only those who have paid into the system, receive contributory benefits - exactly like Beveridge intended.
The Government's time limiting proposals are similar to many other countries in Europe including France and Spain.
The provisions in the Welfare Bill will NOT affect the most severely disabled claimants placed in the Support Group for ESA, including many cancer patients, or those in receipt of income-related ESA.
As the Prime Minister said yesterday in the Commons:
"On the issue of the cancer sufferers and the plans for the employment and support allowance, let me just explain that under our plans the number of cancer sufferers who will get extra long-term help through the ESA support group is actually going to increase. We are going to reduce the number of people who have to have face-to-face assessments. These proposals have been fully supported by Professor Harrington, whom we asked to look into the issue because we were not happy with the previous Government’s arrangements and the way in which these things were dealt with... The point that I would make to the right hon. Gentleman is that there are two types of employment and support allowance. There is the support group, who will always go on getting support, which is not means-tested; as long as they need that help they will get it. There is also the work-related activity group—people who, with help, are able to work. I think it is right to ask them, with support, to get into work, and that is what we are going to do."
CHILD MAINTENANCE
The Government will invest an extra £20 million over the next three years for family support services. Plus, victims of domestic violence will be able to access the statutory scheme immediately.
DISABILITY PREMIUMS IN UNIVERSAL CREDIT - INCLUDING FOR DISABLED CHILDREN
The figures being quoted about cuts to benefits for disabled children are not correct, as they do not account for the effect of the Universal Credit. Universal Credit will support disabled people with extra money - especially for most disabled children. For example, when you consider what happens to a family with a disabled child where someone in the family is in work,the total return for that family will INCREASE from £383 to £416.
If any money is saved from the reforms, it will be recycled to increase support for severely disabled children and adults. Overall, 2.8 million households should have higher entitlements in the future, than at present - including those who are disabled.
Another point which is quite technical - but very important - is that the amount of money any one family or child receives in future will be based on their NEED, not their AGE.
The Government's time limiting proposals are similar to many other countries in Europe including France and Spain.
The provisions in the Welfare Bill will NOT affect the most severely disabled claimants placed in the Support Group for ESA, including many cancer patients, or those in receipt of income-related ESA.
As the Prime Minister said yesterday in the Commons:
"On the issue of the cancer sufferers and the plans for the employment and support allowance, let me just explain that under our plans the number of cancer sufferers who will get extra long-term help through the ESA support group is actually going to increase. We are going to reduce the number of people who have to have face-to-face assessments. These proposals have been fully supported by Professor Harrington, whom we asked to look into the issue because we were not happy with the previous Government’s arrangements and the way in which these things were dealt with... The point that I would make to the right hon. Gentleman is that there are two types of employment and support allowance. There is the support group, who will always go on getting support, which is not means-tested; as long as they need that help they will get it. There is also the work-related activity group—people who, with help, are able to work. I think it is right to ask them, with support, to get into work, and that is what we are going to do."
CHILD MAINTENANCE
The Government will invest an extra £20 million over the next three years for family support services. Plus, victims of domestic violence will be able to access the statutory scheme immediately.
DISABILITY PREMIUMS IN UNIVERSAL CREDIT - INCLUDING FOR DISABLED CHILDREN
The figures being quoted about cuts to benefits for disabled children are not correct, as they do not account for the effect of the Universal Credit. Universal Credit will support disabled people with extra money - especially for most disabled children. For example, when you consider what happens to a family with a disabled child where someone in the family is in work,the total return for that family will INCREASE from £383 to £416.
If any money is saved from the reforms, it will be recycled to increase support for severely disabled children and adults. Overall, 2.8 million households should have higher entitlements in the future, than at present - including those who are disabled.
Another point which is quite technical - but very important - is that the amount of money any one family or child receives in future will be based on their NEED, not their AGE.
Actually, my name is Jane Clout, but the anon route is the easiest way to post on this blog.
ReplyDeleteOK, the problem I am going to address here with the Welfare Reform Bill does not affect me or anyone I know, except in as much as it affects society in general. It's a hypothetical case.
Take a family with four children living in London. They've never earned a huge salary, Mum and Dad between them used to pull in about 45K, more in good years. But Mum's local authority job went last year - she hadn't been there long, so no redundancy to speak of, and Dad's building business has gone down the pan, leaving some debt.
They lived in a mortgaged house, but seeing the writing on the wall, they sold up at a loss and moved into a scruffy three bed in South London. The rent is £1,800 a month.
The benefit cap will mean the most help they can get is £26K: their rent is £21,600. They struggle on for a few months, desperately looking for somewhere cheaper, and going further into debt.
In the end they are evicted. Being evicted for rent arrears normally counts as being intentionally homeless. But if the council do have an obligation to rehouse (this point was fudged in the Parliamentary debate on 2/2/12) the family would likely be split, and housed in Bed and Breakfast accommodation, which will cost much more than their modest three bed.
If not, then perhaps in the fullness of time the children are taken into care, as the strains have by now split the family, and/or caused the parents' relationship and/or health to break down. The cost to the state of one child in care is over £1,000, and here we have four.
Of course, it may be the plan to have homeless kids living feral, as is the case in Russia and other places...
Six lives ruined, and a much higher ongoing cost to the State. Great stuff, guys.
Halfon by name - half-witted by nature! Do you really expect people to SWALLOW this?
ReplyDeleteAnd what is wrong with the fact that the government pay more to house their citizens than they do for an Army?
ReplyDeleteAre you not proud that you help people to afford life in homes they have grown up in, shared with family, loved and cherished?
Is it not proper to feel proud of this?
Demographics and increasing population are not the fault of those already occupying social housing. Uprooting families to "downsize" them into smaller dwellings that do not exist would be tantamount to a death sentence, and especially doing it at a time when disability has been redefined, where 500,000 less Disabled people will not qualify to remain at home.
This whole reform should have taken many years of consultations, pilot schemes, more administration and less of the delegation. The poor of Britain, the disadvantaged are falling over the cliff like lemmings. There is No Catcher in The Rye with a conscience attempting to stop it.
Universal Credit WILL hit the most disabled. It removes Severe Disability Premium. This premium is reserved for people who are in the support group of ESA, receive mid or high rate DLA and live alone, thus incurring higher care costs. No one can contest that these people are by definition the most sick and disabled people in the UK.
ReplyDeleteInstead Universal Credit gives a single lower payment to anyone who is in the support group of ESA, regardless of whether they are in receipt of DLA, putting on an equal footing people with hugely different needs.
Thus these very sick and disabled people stand to lose almost a third of their benefit.
While current claimants will hopefully be protected by transitional guarantee, this means they will still be hit by inflation. It also means that any new claimants will somehow have to make do without money previously deemed essential for care costs.
Indeed a portion of this premium is already taken by social services to help fund care, while the rest is used to pay for disability costs. Social services, already strapped for cash will have to find funds elsewhere which inevitably means cuts to frontline services.
How are these people going to fund their care and disability costs? Add this to the closure of the ILF fund which previously paid for the care of people in the community, many may have no choice but to enter residential care at both huge personal cost and financial cost to government.