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Are people deliberately sticking their heads in the sand, perhaps in the hope that, if they avoid it long enough, it’ll go away?
That’s not going to happen.
Here’s an analysis of what’s happening, compiled by Vox Political for a local Mid Wales organisation. It makes sobering reading.
THE HEADLINE FIGURES
Working-age benefits including Jobseekers’ Allowance, Employment and Support Allowance and Income Support
One per cent rise in each of the next three years, from April 2013.
Frozen until April 2014. Will rise by one per cent in each of the following two years.
Maternity, Paternity and Adoption Pay
One per cent rise in each of the next three years.
Carers’ Allowance and Disability Benefits (other than ESA)
Rise in line with inflation (2.2 per cent in April)
Child Tax Credits and Working Tax Credits
Rise by one per cent for the next three years, from April 2013. Basic and 30-hour elements – uprating will not apply until 2014.
Local Housing Allowance
Capped at a one per cent rise for two years from April 2014
The one per cent cap in those benefits that are affected will take £3.7 million out of the UK economy over the next three years.
THE BENEFIT CAP
A limit will be put on the total amount of benefit that most people aged 16 to 64 can get. This is called a ‘benefit cap’. Local councils will be introducing this between 15 April and 30 September 2013.
This affects: Carer’s Allowance, Child Benefit, Child Tax Credit, Employment and Support Allowance (barring support group), Housing Benefit, Incapacity Benefit, Income Support, Jobseekers’ Allowance, Maternity Allowance, Severe Disablement Allowance, Widowed Parent’s Allowance (also Widowed Mother’s Allowance or Widows Pension if receipt began before April 9, 2001), Bereavement Allowance, Guardian’s Allowance.
The expected level is £500 per week for couples and lone parents – equivalent to £26,000 per year (net); and £350 per week for single adults.
Across the UK, 56,000 households will be affected by the benefits cap, including 1,680 in Wales. Job Centres have already notified those who will be affected; they do not include “a vast amount” in Powys.
Legal aid in civil cases is cut by £350 million, meaning people who need qualified advice on social welfare debt, benefits, employment, family problems, clinical negligence, divorce and housing problems will not get it. Those people may have to pursue the cases on their own behalf, clogging up the civil justice system, perhaps for years to come.
More than 500,000 people in need of advice will be denied the help and justice they need.
INDEPENDENT LIVING FUND
The Government has closed this to new applications, and plans to permanently close the scheme from 2015. the ILF provides money to help disabled people live an independent life in the community rather than in residential care.
Disabled people could be forced out of independent living arrangements and into residential care, or trapped at home by the fund’s closure.
This will take £320 million out of the national economy.
NEW BENEFIT – THE PERSONAL INDEPENDENCE PAYMENT
On April 8, 2013, the Personal Independence Payment replaces Disability Living Allowance. PIP will maintain links to passported benefits where possible, and there are special rules for claimants who are terminally ill.
The differences are that claimants must have still have their problem nine months after they apply; and there will be planned interventions and an early reconsideration process.
It is being rolled out gradually and will not affect new claimants in Wales until June. From October, claimants on fixed period awards that are coming up for renewal will be reassessed, along with young people coming up to age 16, and indefinite awards with a change of circumstances. Nobody else will be reassessed until October 2015.
There is no PIP claim form available from the usual sources. Claims are to be made by telephone on an 0800 number, when claimants will be asked general questions – including their bank details. Then a form will be posted to the claimant. It will be individually-addressed and bar-coded with the claimant’s details.
This ‘Digital By Default’ idea creates problems, especially in rural areas. Access to broadband internet is still an issue in places, and capability to use the internet is just as much an issue. People who might have access to broadband may still need help going through the claiming process.
For those with fluctuating conditions, the form will provide an opportunity to explain them.
Claimants can have help completing the form, and reports from health professionals such as occupational therapists and doctors may be added to it.
The form will go to a health professional working for the company Capita (in Wales; other parts of the UK have Atos). They may decide a claimant’s entitlement straight away, but most will be asked to attend a face-to-face interview. It is possible that this company may carry out home visits if the need presents itself.
Attendance with a friend, relative, partner, health professional or similar is encouraged.
All evidence will be reviewed and a report will be sent to the Department for Work and Pensions to make a decision.
The health professional will not make any recommendations at all – a DWP case manager will review the evidence and make a decision.
If a claim is disallowed or reduced, they will phone on three separate dates, at three separate times, to explain the decision. There are concerns that claimants with particular issues such as mental health problems might not understand.
Finally, as part of an ongoing process, questions and replies about PIP will be posted on the Frequently Asked Questions (FAQ) page of the DWP’s PIP website, www.dwp.gov.uk/pip
If people are receiving low-rate care component Disability Living Allowance, we believe it is unlikely that they will get Personal Independence Payment.
The www.parliament.uk website itself makes it clear that “A key aim of the new benefit is to deliver savings of over £1 billion a year by 2014-15, rising to £1.5 billion a year by 2016-17.”
HOUSING BENEFIT – THE BEDROOM TAX
People who are working but on low pay, who must therefore claim housing benefit in order to keep a roof over their heads. This means it applies to 93 per cent of people who have claimed housing benefit since the Coalition government came to power.
Separated parents who share the care of their children and who may have been allocated an extra bedroom to reflect this. Benefit rules mean that there must be a designated ‘main carer’ for children (who receives the extra benefit). This is likely to cause friction within these former-family groups.
Couples who use their ‘spare’ bedroom when recovering from an illness or operation.
Parents whose children visit but are not part of the household – but households where there is a room kept for a student studying away from home will not be deemed to be under-occupying if the student is away for less than 52 weeks (under housing benefit) or six months (under Universal Credit). Students are exempt from non-dependant deductions, but full-time students will not be exempt from the Housing Cost Contribution (HCC) which replaces non-dependent deductions under Universal Credit. Students over 21 will face a contribution in the region of £15 per week. Are you confused yet?
Families with disabled children; and
Disabled people, including those living in adapted or specially designed properties (this could mean these people will be required to leave that home for another one, with the added expense of having to re-install all the special adaptations).
The government has withdrawn, under pressure, the application to Foster carers. The original rationale was that foster children were not counted as part of the household for benefit purposes.
It has also withdrawn the application to families of young people serving away from home in the armed forces.
Pensioners will not be affected. The government has clarified that couples in which one member is of pensionable age will both be exempt from the Bedroom Tax. But couples of mixed age claiming for the first time under Universal Credit (after it is introduced – possibly in October this year – will have to wait until both are of pensionable age before being exempted from the charge).
Housing benefit will be restricted to allow for one bedroom for each person or couple living as part of the household. However:
Children under 16, who are either both boys or both girls, will be expected to share. This will undoubtedly create many family feuds as puberty is not known for its calming effect on young people.
Children under 10 will be expected to share, regardless of gender. Again, this will create problems for families. It is not a normal situation and it seems bizarre for the government to suggest that it should be.
On the ‘plus’ side, a disabled tenant or partner who needs a non-resident overnight carer will be allowed an extra bedroom for that carer. If you have a ‘spare’ bedroom under the new rules, you will lose 14 per cent of your housing benefit; for two or more extra bedrooms, you’ll lose a quarter of your benefit. According to the government’s impact assessment, this means 660,000 people will lose an average of £14 per week (£16 for housing association tenants).
Now for the complications.
After Universal Credit is brought in, if only one member of a couple is over pension age, the bedroom tax will apply to the household. If one is receiving Pension Credit, they will be unaffected.
There are currently six different rates of ‘non-dependent deductions’ – amounts removed from housing benefit according to the earnings of people aged over 18 who live in a household but are not dependent on the tenant for financial support. This will become one flat-rate ‘housing cost contribution’ that will be deducted from housing benefit. It will not apply to anyone aged under 21.
Under UC, each adult non-dependent will get their own room, but each must pay the full, flat-rate housing cost contribution – unless aged under 21 and therefore exempt.
Under UC, lodgers will not get a room allowance but any income is disregarded. They will not count as occupying a room under size criteria rules. Currently any income is taken into account and deducted pound for pound from benefit, apart from the first £20. As this income is completely disregarded under UC, my best guess is that the government expects this amount to cover any loss in both housing benefit and Universal Credit. I have a doubt about that. Taking in a lodger will also affect home contents insurance policies, potentially invalidating them or raising the premiums.
Bedroom tax will not apply in joint tenancy cases.
Until UC comes in, benefits will be protected for up to 52 weeks after death; afterwards the run-on will be three months.
And until UC comes in, tenants will receive 13 weeks’ protection where they could previously afford the rent and housing benefit has not been claimed in the previous year; afterwards, the size criteria will apply immediately. Pre-1989 tenancies are not exempt from the bedroom tax.
Disabled children are not exempt, even though David Cameron wrongly claimed they were.
If you’re on a low income, aged over 40 with children who have left home, or disabled, you could be not only slightly but severely and unfairly affected. It seems likely you will have to choose to either pay the extra amount, or move. Surveys say around a third of tenants will try to move, mainly to one-bedroom properties. This is far more than the government has anticipated in its planning.
There is a national shortage of one bedroom council and housing association homes, meaning many tenants will have no choice but to move into the more expensive private sector or stay put – even though they will not be able to afford the extra costs.
The majority will stay put, but nearly eight-tenths (80 per cent) of those are worried about going into debt, with two-fifths (40 per cent) fearing they will accumulate rent arrears.
The evidence shows that, whether you move or stay put, landlords will lose income which evictions and homelessness will increase. A trial of the benefit changes in Torfaen saw rent arrears rise SEVEN-fold to £140,000 over seven months. This was a trial of Universal Credit, of which Housing Benefit will be a part. From this we can conclude that Universal Credit will create more problems, possibly much worse than what we are facing now.
I am glad to report that the plan to withdraw Housing Benefit from claimants aged under 25 has been withdrawn. But anyone under 35 will be entitled to only the shared accommodation rate of housing benefit.
There will be an impact on family relationships – people will be forced to move into properties together. Young people under 35 who can’t live independently because the shared accommodation route won’t let them do that. People are being forced into ‘pressure-cooker’ situations.
People will have to move their home because of the bedroom tax. That will have an impact – not just on individuals, but on education if a child has to move away from a school where they have friends, to a new area.
The government claims the bedroom tax will save £480 million, affecting £660,000 homes who will have to pay at least £700 per year each. But this is only if families refuse to – or are unable to – move to what the government calls suitable accommodation. There is no chance of this happening because the government has not allowed such accommodation to be built; therefore we may see it as a trap, from which to plunder millions from the poor.
THE WIDER IMPLICATIONS
There will be a rise in rent and mortgage arrears.
There will be generally less income – less money available. That’s also for people owning local businesses as benefit income is spent locally and High Street shops will receive less.
There is a huge risk that more and more people will access ‘lenders without conscience’. Responsible lenders, such as credit unions, are fantastic places to put money, but the services provided are different, depending on the union. They will see more and more people coming to them. That will impact on their business model and the risks will be greater.
An increased demand for advice – for example from the Citizens Advice Bureau – is already happening. The figures will ramp up significantly over the next 12 months and beyond. Funding is decreasing.
There will be a big impact on social landlords and the housing market – the availability of affordable housing and landlords’ ability and willingness to rent to tenants on benefits.
Pressure on the appeal system means people waiting longer for the outcome of appeals.
There will be pressure on public sector resources – local authorities will bear the brunt of this, at a time when they have received difficult financial settlements.
The fund for Discretionary Housing Payments is increasing, though – but not by enough. These payments may help people top-up to pay accommodation costs. Given the effects of the reforms, people will also be looking for these payments and in those circumstances, the budget won’t touch the sides of what’s needed.
And the cumulative impact on child poverty will be huge, with an extra 200,000 children falling below the poverty line.