Tag Archives: Income Support

Back to the maths class for DWP decision makers

When I was six, I told friends and family I did not want to go out with a girl because "she can't do her maths". What a pity the adults in the Coalition government don't know now what I knew as a child.

When I was six, I told friends and family I did not want to go out with a girl because “she can’t do her maths”. What a pity the adults in the Coalition government don’t know now what I knew as a child.

Iain Duncan Smith was right to weep when he visited Easterhouse, all those years ago – although he would not have known the reason.

It turns out there are probably drug dealers on that estate with a better grasp of mathematics than anybody in his Department for Work and Pensions – or, let’s be honest, the entire Coalition government.

This week it emerged that the National Audit Office has refused to sign off the DWP’s accounts – for the 25th year running. While this indicates that the problem is not limited to the Coalition, it should be noted that David Cameron’s crew has done nothing to rectify it.

The NAO has instead delivered a “qualified” audit opinion, in respect of fraud and error which is considered to be unacceptably high. It seems the department overpaid £3.5 billion or 2.1 per cent of total benefit expenditure due to fraud and error – and also underpaid £1.4 billion to claimants.

Of this, fraud remained static at £1.2 billion (the same as in 2011-12), while underpayments due to official error increased from £400 million to £500 million.

Official error has increased while fraud has not.

An interesting sidebar to this is the fact that fraud has not decreased either, despite all Mr Duncan Smith’s apparent efforts to hammer it. Next year’s accounts – due after April 2014, although your guess on the actual date is as good as anyone’s – should make interesting reading, as they should show the effect of the major regressions (not reforms) he introduced this year.

Further evidence of government incompetence with the figures came in a chart from Conservative Central HQ’s press office, flagged up by Jonathan Portes and the immeasurably cleverer people at NIESR (National Institute of Economic and Social Research).

The chart’s claim was that 28,500 households had been receiving more than £500 per week in benefits, despite containing people who could work but weren’t – until the £26,000 per year Benefit Cap was brought in and reduced it to nothing.

Mr Portes told us the chart was based on DWP statistics published last week that show that 28,500 households have had their benefit capped at £500 per week, “however, the interpretation – and the chart – is utterly wrong in every respect.

“It just is not the case that every one of those 28,500 households contains someone who “can work”.  As the DWP publication clearly states, the cap applies to households in receipt of key out of work benefits – including both those in the Employment and Support Allowance (ESA) Work-Related Activity Group (WRAG) and those on Income Support (IS).  For people in the WRAG, the position is quite clear. As the DWP itself puts it… they are ‘currently too ill or disabled to work’.

“DWP makes clear that there is no assumption that Income Support claimants ‘can work’, but quite the opposite. As a general rule, most people who ‘can work’ should be on Jobseekers Allowance (JSA), not IS. In practice, most of those on IS are single mothers with young children, who are not expected to work.

“Overall, although we don’t have precise numbers from the DWP statistics, it seems quite likely that in fact less than half of the households affected by the cap contain ‘people who can work but aren’t’.”

Mr Portes went on to analyse the second assumption in the chart – that there are now no households receiving more than £500 per week in benefits that include “people who can work but aren’t” – and found it “just as wrong,” – because DWP guidance exempts households with anyone on DLA, PIP, Attendance Allowance, the support component of ESA or Industrial Injuries Benefits, and those receiving War Disablement Pension and equivalent payments from the Armed Forces Compensation Payments Scheme.

“Of course it’s perfectly possible for such households to contain ‘people who can work but aren’t’ – most obviously households with a child receiving DLA, but there are lots of other possible cases. Moreover, even this excludes couple households where one person is working but the other could work, but is not, who are also exempt. Given enough children and/or high enough housing costs, such households can receive more than £500 per week in benefits,” wrote Mr Portes.

“Again, we don’t know the exact numbers, but we are certainly talking about thousands of households, not zero.”

Only on Monday, Mr Duncan Smith assured the Commons Work and Pensions Select Committee that he had warned CCHQ and Tory chairman Grant Shapps against such jiggery-pokery with his departmental stats: “I have had conversations with him and others about being careful to check with the department.”

So did the chart go out with his department’s full endorsement, in which case this is even more proof that the DWP can’t get its facts right – or did CCHQ ignore Mr Duncan Smith’s words and make its own mistake?

For this government, and Mr “In Deep Sh…ambles”, the result is the same.

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More fake statistics from the denial factory

131010benefitdenier

One lie leads to another, as Iain ‘Returned To Unit’ Smith seems to have found out – now that he has started, he can’t stop for fear that he’ll be found out.

Tough. The evidence is available for all to see.

His latest attempt at hoodwinking the public is a press release, Public think benefit cap claimants should work or move, in which even the headline is a lie.

It aims to publicise the results of a survey by Ipsos-MORI, examining public attitudes to the cap. The survey was carried out among more than 2,000 people who were selected to be representative of the UK as a whole.

“The vast majority (70 per cent) of the public think people affected by the benefit cap should be prepared to find jobs or work more hours,” the piece begins. This is accurate, according to the survey being quoted – but it is based on the premise that the benefit cap should be set at £26,000 per year for a workless family, which is significantly lower than what was originally advertised by the DWP – the income of an average working family.

The DWP, imposing the cap, drummed up support by saying it would limit the amount workless families could receive to the same as the average income of a family in work, claiming that this was £26,000. In fact, a working family claiming all the benefits to which it is entitled can get £31,000 – so the cap means workless families are at least £5,000 per year worse-off, a huge gap of 16-17 per cent.

“Two-thirds (65 per cent) say they should be willing to move to a cheaper property,” the release claims – but the Ipsos-MORI report’s summary makes it clear that support for the policy drops to 44 per cent – a minority – and opposition rises to 26 per cent if it means those benefit claimants affected by the cap have to move to other areas to find more affordable accommodation.

The press release, which came out to support the government policy ‘Simplifying the welfare system and making sure work pays’, continues: “Independent research published today (10 October 2013) shows that 60 per cent support the cap even if it means that those affected have to take a job, regardless of the pay.” So now it seems that making work pay is not the objective; cutting wages is the real plan.

“The Ipsos MORI report finds around three-quarters of the public support the benefit cap in principle.” This, at least, is accurate and is no bad thing. Benefits should be lower than wages – they are a safety net that should enable people to carry on living while they find paying work. But in return, employers need to pay a living wage, ensuring that nobody in work has to claim any benefit at all. That, at the moment, is sorely lacking in the UK.

“58 per cent think that politicians needed to do more to reduce the welfare bill.” But they weren’t asked how they thought this should be done, or whether politicians were doing the right things.

“50 per cent think that benefits are too generous.” Among those who’ve received benefits this drops, but surprisingly only to 45 per cent. Among those who haven’t received benefits, 62 per cent thought them too generous.

“11 per cent think the benefits system is working effectively.” But they weren’t asked whether the Conservative-led Coalition was to blame for the poor performance.

At this point, the press release stops quoting statistics – but there is one further piece of evidence that people need to know. It relates to what the people who were surveyed knew about the benefit cap before they answered the questions.

Only 29 per cent knew even a fair amount about the cap before answering the survey’s questions. Of the rest, 42 per cent said they knew “just a little” about it, 18 per cent said they’d heard of it but knew nothing at all about it, and eight per cent had never even heard of it.

So this survey – put out by the DWP as a measure of public support for the Benefit Cap – is in fact a measure of public ignorance.

Why should anybody accept these findings as authoritative? How can we accept the 70 per cent view that people affected by the cap should be prepared to find jobs or work – that’s fewer than those who admitted they don’t know much about it!

In fact, none of these statistics can claim to be authoritative because only a tiny minority of those surveyed knew enough about the subject.

Now look at Iain Duncan Smith’s comment: “Today’s report makes it clear that the public support setting a limit on benefits and the successful delivery of the benefit cap shows we are committed to returning fairness to the welfare state.”

Lie. It shows that most of the public are ignorant about the limit. The successful delivery of a benefit cap set at 17 per cent less than average income shows that he is committed to returning unfairness to the benefit system.

“Claimants affected by the cap need to make decisions about work and housing and what they can afford, just as hardworking families do. We have made sure the support is there to help people back into work and the Benefit Cap and Universal Credit will ensure that work pays.”

Lie. The press release itself states that people are being pressurised into any work they can get – whether it pays or not. Support is not available to get people back into jobs because the jobs aren’t there. And Universal Credit does not work.

The release goes on to state: “Since claimants were first notified of the benefit cap in April 2012, Jobcentre Plus have helped around 16,500 potentially capped claimants into work.” The wording is very careful; notice no mention is made that they moved into work specifically to avoid the cap – Smith and others have been reprimanded over such claims in the past. But the context suggests that the benefit cap is what motivated these people to get jobs, and that is unsupportable as well.

What a shambles.

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The verdict: Universal Credit is a Governmental Disgrace

Can the DWP do anything right? Universal Credit joins the Work Programme and the murderous administration of Employment and Support Allowance on the list of Iain Duncan Smith's failures.

Can the DWP do anything right? Universal Credit joins the Work Programme and the murderous administration of Employment and Support Allowance on the list of Iain Duncan Smith’s failures.

The National Audit Office has published its ‘early progress’ report on Iain Duncan Smith’s flagship Universal Credit scheme – and it is damning.

The report states that, after years of development in which £425 million was spent on the scheme, the Department for Work and Pensions does not even have a detailed view of how Universal Credit is supposed to work.

I should just stop there and spend the rest of this article discussing that one piece of information. After months and years of listening to ‘RTU’ ranting about how Universal Credit was going to be a revolution in benefit claims, we now know that he does not know – and never bothered to work out – how his revolution was going to be delivered!

Nor does Howard Shiplee, the ‘director general’ who has been talking it up on the media over the last few days.

Universal Credit is an attempt to “simplify” six major areas of social security into one streamlined payment system. They are: Income Support, income-based Jobseekers Allowance, income-based Employment and Support Allowance, tax credits (child and working), housing benefit and budgeting loans.

However: “Poor control and decision-making undermined confidence in the programme and contributed to a lack of progress,” the report states. This is directly attributable to the Secretary of State – it is his failure.

The report – and we should remember that this is from an organisation concerned with whether the government is spending our money wisely – concluded that the DWP has not achieved value for money.

The department was over-ambitious in both the timetable and scope of the programme, the report states. This is interesting in itself. How can its scope be “ambitious” if nobody even knew how it was supposed to work?

According to the NAO: “The Department took risks to try to meet the short timescale and used a new project management approach which it had never before used on a programme of this size and complexity. It was unable to explain how it originally decided on its ambitious plans or evaluated their feasibility.” In other words, from its employees right up to its ministers and Secretary of State, the DWP could not justify the risks it took with taxpayers’ money and never bothered to investigate the likelihood of failure.

“Given the tight timescale, unfamiliar project management approach and lack of a detailed plan, it was critical that the Department should have good progress information and effective controls. In practice the Department did not have any adequate measures of progress.”

The report singles out for particularly strong criticism the computer system intended to run the new benefit. “The Department is not yet able to assess the value of the systems it spent over £300 million to develop… Over 70 per cent of the £425 million spent to date has been on IT systems,” it states.

Then it says, “The Department, however, has already written off £34 million of its new IT systems and does not yet know if they will support national roll-out.” So the systems are not – to use a favourite DWP phrase – “fit for work”.

In fact, some parts don’t work on any level at all: “For instance, the current IT system lacks a component to identify potentially fraudulent claims so that the Department has to rely on multiple manual checks on claims and payments.” Meaning: In the single Job Centre where UC has been introduced, employees have been working out claims on paper.

“Such checks will not be feasible or adequate once the system is running nationally.” It seems amazing, but Iain Duncan Smith probably needed to see that, written down in black and white, or he might never have considered the possibility.

Problems with the IT system have delayed the national roll-out of the programme (and for that, considering all of the above, we should all breathe a long-drawn-out sigh of relief). “In early 2013, the Department was forced to stop work on its plans for national roll-out and reassess its options for the future… The Department will not introduce Universal Credit for all new claims nationally in October 2013 as planned, and is now reconsidering its plans for full roll-out.

“Instead, it will extend the pilots to six more sites with these new sites taking on only the simplest claims. Delays to the roll-out will reduce the expected benefits of reform and – if the Department maintains a 2017 completion date – increase risks by requiring the rapid migration of a large volume of claimants.”

The DWP intends to spend £2.4 billion on Universal Credit up to April 2023. To put that in perspective, that’s twice as much as the government loses on all benefit fraud – not just those being bundled together here – every year. And this will “increase risks”.

The spending watchdog found that the DWP took some action at the end of 2012 to resolve problems, but was unable to address the underlying issues effectively.

“The programme suffered from weak management, ineffective control and poor governance,” said Amyas Morse, head of the National Audit Office.

Despite all this, the report incredibly states that “the programme still has potential to create significant benefits for society, but the Department must scale back its delivery ambition and set out realistic plans”.

Liam Byrne will no doubt seize this as an opportunity, yet again, to offer Labour’s help to find a way forward and bring Universal Credit back on track. He should be discouraged from doing so. This ‘flagship’ hasn’t so much sailed as sunk.

Universal Credit is a FAILURE.

It should be SCRAPPED – before that idiot Smith wastes any more of our money on it.

Delays won’t stop Universal Credit’s ‘cultural change’ – to dishonesty, lies and threats

Sinking Shiplee: Howard Shiplee is the man who has been hired to spread the DWP culture of dishonesty and maladministration across all the major British social security benefits.

Sinking Shiplee: Howard Shiplee is the man who has been hired to spread the DWP culture of dishonesty and maladministration across all the major British social security benefits.

You know a Tory policy is in serious trouble when the Daily Telegraph starts publishing articles criticising it.

Today, Universal Credit is on the Telegraph‘s naughty step – not for the first time! – with current ‘director general’ Howard Shiplee (my word, they love making up impressive names for themselves, don’t they?) admitting it has been “plagued by problems”, as the newspaper’s headline puts it.

These include:

  • Technical problems in the merging of benefit office, HMRC and council IT systems
  • Bureaucratic problems
  • Scheduling problems as the scheme’s timetable has slipped further and further back
  • Personnel problems, with Work and Pensions Secretary Iain Failure Smith claiming official let him down, forcing him to employ private sector experts to get the scheme back on track (but it still isn’t)
  • Poor project management, including poor management of suppliers
  • Lack of transparency, with too much attention focused on what was working and not enough on what wasn’t

The plan was to roll out Universal Credit for all new claimants from October onwards, but this has been scaled back to just six Job Centres. It began in a single Job Centre in April, where calculations have been worked out on paper.

Ministers say the final deadline, to introduce the system for all claimants by 2017, will be met – but it seems increasingly likely that – if Labour wins the 2015 election – the whole plan will be consigned to the political scrapyard where, in this writer’s opinion, it belongs.

But Mr Shiplee said he was working on introducing the “cultural” elements of the proposed scheme while awaiting the development of a new IT system, and you need to know what that means.

It means spreading the culture of dishonesty, that has been bred and nurtured in the DWP’s handling of ESA, to the five other benefits that are to be merged into UC.

They are: Income Support, income-based Jobseekers Allowance, tax credits (child and working), housing benefit and budgeting loans.

“This is about changing the way we do business – and changing people’s behaviour by ensuring there is always an incentive to be in work,” said Shiplee. Meaning: We will lie when assessing your claims; we will intentionally mishandle your claim to make it appear that you do not deserve benefit and we will maladminister any appeals; if you do receive benefit, we will harass you to take part in our silly made-up programmes when you could be doing better things; if we find a way to cut you off, or you give up in despair, we will claim that as a positive benefit outcome; and if you suffer hardship, destitution or health problems up to and including death as a result, we will not record them because we can claim it is nothing to do with us.

That is my experience of the DWP, based on Mrs Mike’s experience with ESA.

You’ll be aware that she currently has an appeal against being put into the work-related activity group, based on medical evidence and the expert opinion of a work programme provider. The current word from the DWP is that she must undergo another work capability assessment.

The reason given is that she has claimed her health has deteriorated since her original assessment in 2012 but this is nonsense.

Her appeal was made against the original decision – based on that 2012 assessment. Another WCA won’t have any bearing on that.

Instead, the matter should have gone to a tribunal, as the DWP’s own decision maker failed to make a decision when the case was considered, in April.

That hearing could have taken place by now; instead the DWP has sat on its thumbs and done nothing, waiting for the time-limited claim to come to an end in order to claim – yes – a ‘positive benefit outcome’.

There was no communication with the claimant and therefore there was no way for Mrs Mike to know what was happening until she discovered her benefit had been stopped, a couple of weeks ago.

Now imagine that situation magnified to include not only every ESA claimant, but the many millions of UK citizens who claim all the other main benefits. What do you think will happen when this “cultural” change is applied to them?

Chaos.

Do you claim any benefits? Do you know somebody who does?

If so, you’d better do something about it, before it’s too late.

Universal Credit: Hardly universal, and no credit to anybody

Getting a bit rough, is it? Iain Duncan Smith knows his flagship Universal Credit scheme won't work - he just doesn't care.

Getting a bit rough, is it? Iain Duncan Smith knows his flagship Universal Credit scheme won’t work – he just doesn’t care.

Earlier this week, a Job Centre somewhere in Mid Wales was graced by the presence of Yr Obdt Srvt, the author of this column. It’s true; I’m a real human being and I receive certain state benefits.

Having said that, it transpired during the conversation with my advisor that I was on one less benefit than expected; the DWP had, in its wisdom, cut me off from Income Support, with “No contact”. That was the on-screen comment. They stopped it but couldn’t be bothered to tell me.

Classy.

But that’s by-the-way. The discussion ranged through the paid work that I do, my plans to expand my earnings, and my aim to get off-benefit as soon as possible -certainly “before Universal Credit comes into effect, in October”.

I said it, looked my advisor – who is, I should point out, a very nice person indeed, and therefore breaks all the rules of the DWP just by being there – in the eye, and we both had a little giggle about that one.

“That’s still right, isn’t it? In October?”

“They’re hoping.”

The conversation moved on.

Imagine my delight on Thursday evening, when I refreshed the BBC website and saw: “UNIVERSAL CREDIT PILOTS SCALED BACK”!

“The government is to scale back some of its plans to test a radical new reform to the welfare system,” the story stated. It was by James Landale, about whom I have previously complained to the BBC with regard to Tory bias, so it should be no surprise that the reason for the scaleback was buried 11 paragraphs down: “But Labour said this showed the scheme was in crisis and that the information technology needed for it was not ready.”

I turned to the newspapers for corroboration, and found it in the Independent, which put the issues right at the front of the story: “Ministers tonight significantly scaled back plans to begin piloting their controversial universal credit programme next month amid fears that the scheme is behind schedule and facing major problems.”

UC – I pronounce it “Uck” – was due to be tried out in four areas from late next month, but will now run only from a single Job Centre in Ashton-under-Lyme at that time. The three other pilot areas, in Wigan, Warrington and Oldham, won’t get started until “at least July” (it says here).

The plan is to merge around 30 benefits and tax credits into a single payment, on a tapering scale depending on a claimant’s earnings. It requires communication between computer systems belonging to the Department for Work and Pensions, HM Revenue and Customs, and employers who have to provide PAYE details (if I’ve got this right).

The scaleback is already being seen as an admission that the communications software – required for UC to succeed – doesn’t work.

There are also fears that the government doesn’t have anyone with the training or experience necessary to manage the scheme without messing it up completely and making the government look like a bunch of irresponsible fools. Again.

Needless to say, the government has denied that there is any problem. Apparently it is “sensible” to start in one area before rolling the system out elsewhere. Oh really? No attempt was made to explain why the original plan had been changed. Because the answer is too embarrassing?

This plan is a total disaster.

There can be only two reasons the government is pushing forward with it. Firstly, Iain Duncan Smith has said it will happen so it will happen, no matter how badly past-deadline and over-budget it turns out to be.

Secondly, if it doesn’t work, the only people who’ll be inconvenienced are poor people who are on benefits – and they won’t be able to take legal action over it because Legal Aid will have been cut for civil cases.

That’s why I want to be out of the blast zone when this one hits.

I fear for my future – and that of everyone else who will be caught up in this debacle – if I’m not.

Will the government’s benefit raid turn us all into April Fools?

ripwelfarestate
Why is the cumulative effect of the government’s raid on benefits and other public services continuing to be ignored by the public at large?

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.

Child Benefit

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

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

This affects:

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.

Is the public prepared for the benefits battering of 2013?

This is what 'money' looks like. Enjoy the sight because you'll probably be seeing increasingly less of it in reality from now on.

This is what ‘money’ looks like. Enjoy the sight because you’ll probably be seeing increasingly less of it in reality from now on.

I haven’t seen anything in the press lately – local or national – about the many changes to social security benefits (the Tories call them ‘welfare’, which seems a good reason for me not to) that will come into effect this year.

That’s a mistake. People need to know what will happen and when – otherwise some of the UK’s most vulnerable, who find it very hard to adapt when their circumstances change, will get into trouble.

So what follows is an attempt to provide a brief overview. It won’t cover everything but should hopefully function as a prompt for people to follow up.

Needless to say, the most vulnerable in society will be affected by these changes – many of them in a fundamental way.

Putting a cap on benefits

The Coalition government’s benefit cap will come into effect from April. 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. Job Centres have already notified those who will be affected.

Money will be removed from benefits until they come down to the £26,000 cap – starting with Housing Benefit. Of course, anyone under 35 will already be receiving only the shared accommodation rate of HB.

Many benefits are included in the cap, but Council Tax Benefit and its successor, the Council Tax Reduction Scheme will not be. DLA claimants are exempt, and also Working Tax Credit recipients – but both these benefits are being replaced this year.

In my home county of Powys, it is believed that 23 households will be affected by the benefits cap. Nine are private; 14 are social sector tenancies. All have children and/or some form of disability.

The bedroom tax

The under-occupation penalty comes into effect, for people in social housing (not including pensioners) from April, and means those with one spare bedroom will lose 14 per cent of their housing benefit; those with two bedrooms going spare will lost 25 per cent of their HB.

In Powys we have 8,300 social landlord properties; 900 are under-occupied by one bedroom, 300 by two bedrooms. The total annual loss of housing benefit will be £800,000.

People will have to move 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. It’s not about downsizing to another property in the same village. You may be looking at a considerable move, out of the family circle, taking children from one school to another. The impact is likely to be significant.

From DLA to PIP

Disability Living Allowance will be replaced by the new Personal Independence Payment in a gradual process, starting in April. There are similarities – PIP maintains links to passported benefits where possible, and there are special rules for claimants who are terminally ill. The differences are that claimants must still have their problem nine months after they apply; and there will be planned interventions and an early reconsideration process.

It is currently believed that people receiving the low-rate care component of DLA are unlikely to receive PIP at all.

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.

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 our old sparring partners 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.

From April 2013, new claims for PIP will be taking in the northeast and parts of northwest England; it won’t affect Wales until June.

From October 2013, 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.

Council Tax Reduction Scheme

The UK government is planning to save more than £500 million by issuing only 90 per cent of the cash to local authorities that it would normally provide for Council Tax Benefit. It is up to councils in England, and the Welsh, Scottish and Northern Irish Parliaments, to devise for themselves ways of making up the shortfall.

In Scotland, the Scottish Parliament is finding money within its own funds to plug the gap. Councils in England have come up with their own systems – some asking people who have never paid council tax before to contribute up to 40 per cent of the normal bill.

The Welsh Government has decided to introduce a nationwide format, in order to prevent ‘postcode lotteries’ where people in one area are worse-off than those who live across the street, but in another local authority’s jurisdiction.

The new scheme will be means-tested and the ceiling for the maximum entitlement will be decided by the administering authorities; in Wales it will be 90 per cent of the council tax bill. This means support for all claimant groups will be reduced, including those on passported benefits such as Employment and Support Allowance. If you are on ESA you will be expected to pay at least 10 per cent of your council tax from now on.

There is no requirement in Wales to protect pensioners. The second adult rebate will also be removed.

In England, pensioners will be protected, but this means the maximum entitlement comes down to 84 per cent of the council tax bill or less, meaning residents will have to pay at least 16 per cent. In some counties we already know people will be paying a minimum of 30 per cent.

In Powys, where the 10 per cent maximum applies, this means 10,400 residents will lose, on average, £86 per year. Of these, 7,800 people currently pay nothing, and this means they must find the extra money from whatever other resources are available to them, to pay their council tax. That’s just an average among people affected, by the way. On a Band D property, 10 per cent is £117. Also, in Powys, 74 households get the second adult rebate, averaging £205 per year.

This means the total amount of extra money being taken from households in Powys alone comes to £915,000 in the 2013-14 tax year. That’s nearly £1 million being taken out of the local economy via this change alone.

Councils need to inform all Council Tax Claimants of the change. “I don’t think the message has fully got through – either that the change to a support scheme is coming, or that the scheme in Wales will be different to England,” said Colin Wallbank of the Welsh Local Government Association.

“There will be an impact on community support activities including housing and social services, and the aggregate effect of this and other welfare changes will have an impact on poorer households.”

“There is a risk of increased claimant numbers, and this will put more pressure on local authority budgets.

“Local authorities must consult, and then adopt a scheme. The consultation is on the discretionary aspects, not the main scheme.”

Geoff Petty, chief financial officer of Powys County Council, added: “The funding we get is for the existing caseload and doesn’t accommodate that load increasing. I don’t see the economy improving much overall, and that could mean we are underfunded by up to £500,000.

“That means we are chasing people for very, very small sums of money. Equally, I have a responsibility to chase those sums. If you allow arrears to grow, a small problem becomes bigger. I would want to ensure that, where people do get into arrears, we can give rapid support.”

There will be an impact on family relationships because the Council Tax Reduction Scheme, taken together with the ‘bedroom tax’ on Housing Benefit and reductions in HB rates for people aged under 35, mean that people will be forced to move into properties together. “People are being forced into ‘pressure-cooker’ situations,” as Erika Helps of Rhondda Cynon Taff Citizens Advice Bureau put it.

There will be an impact on mental health and anxiety. Anyone on a reduced income will feel stress but the Council Tax Support Scheme especially adds to this. The question is not, “Will we have to pay?” It is, “How much will we have to pay?”

Universal Credit

More than 30 benefits are being rolled into one – the Universal Credit – starting in October. Mainly, it will replace income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Income Support, Child Tax Credits, Working Tax Credits and Housing Benefit.

The new benefit’s stated aim is to get people into a ‘working’ state of mind, rather than a ‘dependent on benefits’ ethos. Currently, according to the DWP there is a large risk of fraudulent claims. Since the total amount of fraud in the benefits system is 0.7 per cent, you may wish to take that comment with a pinch of salt.

Claimants will be asked to do everything reasonable to look for work, or – if they are already in part-time employment – to increase their hours of work. As part of their commitment, there are consequences of failing to meet responsibilities – sanctions. There are groups who are not expected to work, including those with limited capability; carers; and lone parents with a child aged less than one year.

There are child elements, limited capability for work elements, and a housing element. Anyone with capital of more than £16,000 will not be entitled to Universal Credit.

Claimants who work part-time will be encouraged to ask employers for more hours of work. It will be part of a new system called ‘Real Time’; currently an employer will send their PAYE statement off at the end of March, but now it will go monthly to HMRC. They will pass it on to the DWP to assess a claimant’s entitlement that month.

This means claims will go through three different computer systems, and much has been said about the difficulties posed to the government by such a plan.

There will be a taper – as earnings increase, the benefit will tail off.

Universal Credit will be paid monthly, in arrears. This will raise budgeting issues and will affect working families as well as non-workers. People on low incomes are, in fact, often very good at managing, but the change to monthly payments means a whole new pattern for paying bills and saving for one-off purchases.

The DWP has made it clear that, at the point of change, there will be no losers financially. There will be transitional protection, unless there is a change of circumstances. However it should be noted that many of the benefits that will become part of Universal Credit are affected by the Benefits Uprating Bill, currently going through Parliament. Below-inflation increases are effectively cuts in benefit and this means that many people will have less money, going into the new benefit, than they might have otherwise expected.

Universal Credit will be “Digital by Default” – available at all times on the Internet, so it doesn’t depend on call centre times; it will aim to be flexible and responsive – continually improved; informative; integrated – joining work and benefits systems; and accessible – designed to meet the needs of a wide range of users within the system.

There are several problems with these claims. The most obvious is: What happens to people who don’t have the Internet?

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.

Some benefits will actually require people to make a re-claim. If people don’t make that re-claim in time, the money they lose won’t be paid back in arrears later.

The aim is that it will start coming into effect from October 2013, when the newly-unemployed will start claiming Universal Credit, and from then on there will be a gradual phasing-out of existing benefit claims.

In spring 2014 it will be expanded to include new claims from people in work and moving current claimants to Universal Credit.

By 2017, the DWP hopes the Universal Credit roll-out will be complete.

Around 7,000 Housing Benefit claimants will migrate to universal credit between 2014-17. They will then be administered by the DWP.

Financial Inclusion: There is concern that many claimants may not be able to budget to support themselves straight away. The DWP says it is looking at targeting those claimants and coaching them. Many don’t have a mainstream bank account and the DWP says it is working with the credit union nationally.

There will be something in place for exceptions – claimants who can’t cope.

And there may be a review of the frequency of payments, but for a limited period only.

Housing: The DWP has promised to test key elements of incorporating housing support into Universal Credit, while protecting the financial position of social landlords.

“We want a welfare system that encourages a return to work as soon as possible. For those in work, we want to encourage progress, with people increasing their earnings and becoming more financially independent. But there are claimants who cannot work and it is important we have a welfare system providing them with the support they need,” said a spokesman at the conference I attended.

The effect upon society

People in social housing are likely to face discrimination because of who they are.

Advice services such as the Citizens Advice Bureau will face a growth in inquiries. Already in 2012 the growth in ESA inquiries in Powys CAB was 119 per cent. Rhondda Cynon Taff CAB saw a 74 per cent increase in council tax benefit inquiries, a 41 per cent increase in housing benefit calls and a whopping 165 per cent growth in inquiries about rent arrears. These figures will ramp up significantly over the next 12 months and beyond.

The need for debt advice and money advice (financial capability skills including budgeting) will increase. Some people will need to be supported.

There will be increased pressure on other voluntary resources, including food banks. The number of these in the UK has more than doubled in the last year, and is likely to increase.

Direct payment of housing benefit will mean that, if a crisis occurs, the temptation will be to use the rent money – but this can lead to a cycle of debt, and then there is a risk of resorting to pay-day lenders.

People will not be able to borrow locally from friends and family, because they will also be feeling the pinch as these welfare cuts bite.

The cumulative impact on child poverty will be huge.

Wider implications

There will be a rise in rent and mortgage arrears.

Less income generally means there will be less money available. That will also affect people owning local businesses – benefit income is spent locally and High Street shops will receive less.

There’s 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.

There will be a big impact on social landlords and the housing market – affordable housing will be less available and landlords less able or willing to rent to tenants on benefits.

Private sector rental may become less attractive to landlords if tenants aren’t paying the rent. This will lead to a growth in homelessness. Councils have statutory duties and may see an increasing burden.

Pressure on the appeal system means people waiting longer for the outcome of appeals.

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. 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.

Inflation rise will increase the agony for those on benefits

This is what ‘money’ looks like. Enjoy the sight because you’ll probably be seeing increasingly less of it in reality from now on.

How many different ways can the Coalition find to shoot itself in the foot?

Today, inflation is the cause of the embarrassment. Just one month after it dropped to its lowest level in three years, the pace of price rises leapt up by half a percentage point, which is well above expectations.

And what’s the reason for this unexpected turnaround? Why, it’s because of the sharp rise in university tuition fees!

They rose by 19.1 per cent after the cap on charges was lifted by the government to £9,000 from £3,375.

In response, the Consumer Price Index rose from 2.2 per cent to 2.7, while the Retail Price Index went from 2.6 to 3.2 per cent.

What does it mean for you?

Well, it’s still September’s rise that is the important one, because it is those figures that part-time Chancellor Gideon George Osborne uses to work out the rise in benefits, starting next April. He’ll announce the amounts in December, but he’ll be guided by the September CPI rate.

These include Jobseekers’ Allowance, Income Support, disability benefits, maternity benefits, Incapacity Benefit, Child Tax Credit, Working Tax Credit and Child Benefit.

With inflation rising again, those on benefits are likely to suffer an even greater squeeze on their wallets than is already expected – remember, the bedroom tax and the ‘Pickles Poll Tax’ are both being imposed on us in April 2013.

Energy bill increases, water bill increases, food price rises, and the increase in fuel duty that members of the Coalition dutifully and brainlessly supported only yesterday will add to the agony for the many.

Mr 0 has already announced an intention to squeeze Jobseekers’ Allowance, as he is keen for those in work to see greater reward than those on the dole. Notice that he doesn’t say anything about whether that reward will be adequate to their needs. The living wage is not a factor in this Chancellor’s thinking!

Even last month, when inflation fell, TUC general secretary Brendan Barber warned that real wage drops mean families have been getting poorer every month for the last three years.

It’s not all bad, though!

Pensions – which are drawn by those who are most likely to vote (and most likely to vote Conservative) – are protected by a government guarantee, and will therefore rise by 2.5 per cent.

How cynical.