richard gass

Richard GassChair of Rights Advice Scotland

22nd June 2011EDINBURGH

Emergency Budget June 2010

• 11Billion in Welfare Savings• (a further £7 Billion in Spending Review)• Benefits to be increased by Consumer

Price Index (CPI) and not Retail Price Index (RPI) from April2011

• Objective Medical Assessment for DLA

Benefit Uprating

The Consumer Price Index (CPI) will be used instead of the Retail Price Index for the uprating of benefits and tax credits from April 2011 (paragraph 2.32)

• UPDATE: Benefits were uprated for

2011 with CPI 3.1% (RPI was at 4.6%)

Amount of DLA Lost by uprating with CPI rather than RPI

DLA All Ages CurrentAnnualTotal

CPI Increase

3.1%

RPI Increase

4.6%

AnnualDifference

1.5%Glasgow £218.1 million £6.76 m £10.03 m £3.27 MillionAberdeen City £37.3 million £1.16 m £1.72 m £0.56 MillionAberdeenshire £40 million £1.24 m £1.84 m £0.60 MillionStirling £19.4 million £0.6 m £0.89 m £0.29 MillionRenfrewshire £50.3 million £1.56 m £2.31 m £0.75 MillionN Lanarkshire £110.5 million £3.42 m £5.08 m £1.66 MillionD & G £40.5 million £1.25 m £1.86 m £0.61 Million

Scotland £1,341.9 Million £41.60 m £ 61.73 m £ 20.13 Million

DWP Data August 2010

CPI Impact in GlasgowBenefit Uprated by CPI*

Number of claimants

Average weekly claim

Annual impact per claimant

Total impact on Glasgow

JSA 23,980 £62.39 £48.66 £1,166,968

DLA 56,600 £72.41 £56.68 £3,196,757

Income Support 39,190 £88.14 £68.75 £2,694,281

Attendance Allowance 19,740 £62.23 £48.54 £958,168

ESA 9,890 £69.80 £54.44 £538,451

Incapacity Benefit 38,660 £50.45 £47.32 £1,829,391Severe Disablement Allowance 3,480 £73.75 £57.53 £200,187

Carers Allowance 8,050 £53.89 £42.03 £338,375

Widows Benefit 620 £75.21 £58.66 £36,371.56

Bereavement Benefit 580 £93 £72.54 £42,073

DWP Claimant data May 2010 Total £11.7 Million

Proposed DLA Changes

• Objective Medical • Save 20% of current expenditure• Personal Independence Payment• Removal of Mobility in Residential Care• Only 2 rates for ‘Daily Living’• Doubt over passporting to other benefits• Payable over age 65?

DLA Weekly Expenditure

DLA CARE Higher Rate

Middle Rate

Lower Rate

DLA MOB

Higher Rate

Lower Rate

Glasgow £1,008,882 £1,012,882 £285,197 £1,491,013 £396,813Aberdeen City £156,366 £178,772 £51,923 £262,709 £68,220Aberdeenshire £182,784 £176,382 £49,459 £301,592 £58,176Stirling £95,676 £80,304 £21,603 £149,550 £26,530Renfrewshire £236,334 £213,188 £65,756 £373,875 £79,590N Lanarkshire £537,642 £453,144 £133,597 £856,921 £144,020D & G £192,066 £174,948 £50,028 £307,076 £54,955

Scotland £6,314,616 £5,832,078 £1,707,774 £9,838,396 £2,113,683

All Ages

Total DLA payments in Scotland £25 Million/ week

DLA Weekly Expenditure

DLA CARE Higher Rate

Middle Rate

Lower Rate

DLA MOB

Higher Rate

Lower Rate

Glasgow £564,774 £618,532 £193,858 £724,819 £310,590Aberdeen City £88,536 £112,330 £36,952 £147,057 £50,596Aberdeenshire £99,246 £99,424 £32,973 £163,508 £39,795Stirling £240,618 £223,704 £67,462 £71,784 £20,087Renfrewshire £127,806 £122,846 £43,206 £176,469 £60,071N Lanarkshire £269,892 £250,950 £82,243 £391,821 £106,309D & G £99,246 £101,336 £32,215 £157,027 £38,279

Scotland £3,430,770 £3,476,494 £1,144,011 £4,954,093 £1,578,724

Working Age Only

Total DLA payments to working age claimants in Scotland £14.5 Million/w

Potential DLA Loss (20%)All Age Groups

DLA All Ages WeeklyTotal

AnnualTotal

20%Annual

Glasgow £4.194 million £218.1 million £43.6 millionAberdeen City £0.717 million £37.3 million £7.5 millionAberdeenshire £0.769 million £40 million £8.0 millionStirling £0.374 million £19.4 million £3.9 millionRenfrewshire £0.968 million £50.3 million £10.1 millionN Lanarkshire £2.125 million £110.5 million £22.1 millionD & G £0.779 million £40.5 million £8.1 million

Scotland 25.806 Million £1,341.9 Million £268 Million

Potential DLA Loss (20%)Working Age Only

DLA Working Age WeeklyTotal

AnnualTotal

20%Annual

Glasgow £2.413 million £125.5 million £25.1 millionAberdeen City £0.435 million £22.6 million £4.5 millionAberdeenshire £0.435 million £22.6 million £4.5 millionStirling £0.203 million £10.6 million £2.1 millionRenfrewshire £0.530 million £27.6 million £5.5 millionN Lanarkshire £1.101 million £57.2 million £11.4 millionD & G £0.428 million £22.3 million £4.5 million

Scotland 14,484 Million £753,168 Million £150 Million

Reduction in Benefit

• Loss of Income to Claimants• Loss of Income to Local Economy• Consequential loss of Jobs• Greater demand for council services

Fraser of Allander Institute

• Reports for Glasgow City Council in 2001 and 2003

• An increase in benefits increases spending in the local economy and creates jobs

• £11Million created 258 Jobs in Scotland of which 180 would be in Glasgow

• A cut would have the reverse effect.

Personal Independence Payment

• Consultation Closed on 18th Feb 2011

• From 2013 for all DLA claimants• 2 components

– Mobility – 2 Rates• Replacing walking with mobilising

– Daily Living – 2 Rates• Take greater consideration of potential aids

• The period condition conditions be satisfied 6 months prior to claiming and to be likely to continue for a period of at least 6 months.

• Terminal illness (same definition as for DLA) automatically receive the daily living component enhanced rate and will not have to satisfy the period condition for the mobility component.

• Age Restriction Concern that PIP will not be paid once someone reaches the age of 65 or pensionable age, whichever is the higher.

Example 1• Mother age 50 living in a rented house with

her son age 30.• Mother is partially sighted and is in receipt

of DLA lower rate care & lower Mobility , she also gets Jobseekers Allowance

• Son works full time, wage = £250 per week• Mother is the tenant, house rent is £100

per week. The full rent met through Housing Benefit.

Current Financial PositionMother (weekly) Son (weekly)

DLA Lower Rate Care £19.55DLA Lower Mobility £19.55Jobseekers Allowance £96.35

Includes a disability premium

Housing Benefit £100

Wages £250.00 gross

What if the mother was to lose her entitlement to care/daily living

Mother loses DLAMother Son

DLA Care £19.55DLA Lower Mob £19.55JSA £96.35Housing Benefit £100

Wages £250.00 gross

Mother Son

DLA Care £nilDLA Lower Mob £18.95JSA £96.35Housing Benefit £100Less Non Dep deduction of £48.45Also Non Dep on Council tax £5.70

Wages £250.00 gross

Loss to weekly income £73.70 (Note that Non dep deductions rose by 27% taking out another £11.30on HB and Council Tax Benefit.

Non Dependent Deductions• Pre April 2011

Aged 25+ JSA £ 7.40Gross wages below £120 £ 7.40£120 – £177.99 £ 17.00£178 – £230.99 £ 23.35£231 – £305.99 £ 38.20£306 – £381.99 £ 43.50£382 and above £ 47.75

• After April 2011

Aged 25+ on JSA £ 9.40Gross wages below £122 £ 9.40£122 – £179.99 £ 21.55£180 – £233.99 £ 29.60£234 – £309.99 £ 48.45£310 – £386.99 £ 55.20£387 and above £ 60.60

The above are weekly deductions from Housing Benefit. Other deductions apply to Council Tax Benefit.

Example 2• Father age 50 living in rented accommodation

with daughter age 30.• Father is partially sighted and is in receipt of DLA

middle rate care, and also ESA• Daughter is registered blind and also gets DLA

Middle rate Care and Low Mobility and also ESA.• Father is the tenant and the rent is £100 per

week. The full rent met through Housing Benefit.

Income prior to PIP re-assessment

Father DaughterDLA Care £49.30ESA £149.55

including– Work related activity component– Severe Disability Premium

Housing Benefit £100Max Council Tax Benefit

DLA Care £49.30DLA Mob £19.55ESA £149.55

including– Work related activity component– Severe Disability Premium

On assessment for PIP father loses entitlement and daughter keeps her entitlement

Loss of Father’s DLA

• Loss of Father’s DLA , Loss of his SDP• Loss of Daughters SDP• Exposure to Non Dependent deductions

Father DaughterDLA Care £nil (-£49.30)ESA £91.45 (-£55.30)Housing Benefit £90.80 (-£9.20)Council Tax Benefit (-£2.85)

DLA Care £49.30 (no change)DLA Mob £19.55 (no change)ESA £91.40 (-£55.30)

Weekly loss to household = £171.95

Note Daughters Income is affected by loss of Fathers DLA

Father loses £116.65 Daughter loses £55.30

Options ?

If the daughter was to move out she could restore her SDP and her father would then not have non dependent deductions from his Housing Benefit

This could save £67.35 that would otherwise be lost. **

Father DaughterDLA Care £nil (-£49.30)ESA £91.45 (-£55.30)Housing Benefit £90.80 (-£9.20)Council Tax Benefit (-£2.85)

DLA Care £49.30 (no change)DLA Mob £19.55 (no change)ESA £91.40 (-£55.30)

Even if they maintain entitlement to DLA/PIP

• Will benefit rates be the same?• No guarantees that the passporting that

currently exist continues • Will there be an equivalent of Severe

Disability Premium in new Universal credit

ICB Claimants (In thousands)

Aberdeen City 8.63 East Dunbartonshire 2.98Aberdeenshire 6.64 East Lothian 3.54

Angus 4.03 East Renfrewshire 2.55Argyll and Bute 3.19 Edinburgh, City of 18.12

Clackmannanshire 2.74 Eilean Siar 1.02Dumfries and Galloway 5.99 Falkirk 6.99

Dundee City 8.76 Fife 15.79East Ayrshire 6.41 Glasgow City 43.93

Source DWP as at November 2009Working Age Claimants

ICB Claimants (In thousands)

Highland 8.43 Renfrewshire 8.9Inverclyde 5.51 Scottish Borders 3.74Midlothian 3.34 Shetland Islands 0.61

Moray 2.83 South Ayrshire 5.09North Ayrshire 7.32 South Lanarkshire 15.45

North Lanarkshire 18.94 Stirling 3.2Orkney Islands 0.58 West Dunbartonshire 5.62

Perth and Kinross 4.42 West Lothian 7.73

Scotland total ICB count 243,030

** Benefit Loss (In millions per year)

Aberdeen City 4.82 East Dunbartonshire 1.66Aberdeenshire 3.71 East Lothian 1.98

Angus 2.25 East Renfrewshire 1.42Argyll and Bute 1.78 Edinburgh, City of 10.12

Clackmannanshire 1.53 Eilean Siar 0.57Dumfries and Galloway 3.35 Falkirk 3.91

Dundee City 4.89 Fife 8.82East Ayrshire 3.58 Glasgow City 24.55

Assuming that 23% of people fail and 30% of those come off benefit

** Benefit Loss (In millions per year)

Highland 4.71 Renfrewshire 4.97Inverclyde 3.08 Scottish Borders 2.08Midlothian 1.87 Shetland Islands 0.34

Moray 1.58 South Ayrshire 2.84North Ayrshire 4.09 South Lanarkshire 8.63

North Lanarkshire 10.58 Stirling 1.79Orkney Islands 0.32 West Dunbartonshire 3.14

Perth and Kinross 2.47 West Lothian 4.32

Assuming that 23% of people fail and 30% of those come off benefit altogether

Scotland Total loss £135.78 Million

IB Migration other factors• Aberdeen Pilot showed a 29% failure rate• New tougher ESA assessment being

introduced as such failure rate will rise.• Now intending to end entitlement to

contribution based ESA after 12 months.

Questions for Government• How real are projected savings• How it will fill the £18billion black hole in the UK

economy left by changes to welfare. • How it will protect the quality of life of people

currently on disability benefits.• How it will ensure that local authorities and the

third sector can continue to provide lifeline services

END

DLA Care Component (Caseload thousands)

All Ages Higher Rate Middle Rate Lower Rate Nil Rate

Glasgow 14.13 21.19 15.05 6.71

Aberdeen City 2.19 3.74 2.74 1.31

Aberdeenshire 2.56 3.69 2.61 1.35

Stirling 1.34 1.68 1.14 0.66

Renfrewshire 3.31 4.46 3.47 1.88

N Lanarkshire 7.53 9.48 7.05 3.7

D & G 2.69 3.66 2.64 1.27

Scotland 88.44 122.01 90.12 46.05

DLA Care Component (Caseload thousands)

Working Age Higher Rate Middle Rate Lower Rate Nil Rate

Glasgow 7.91 12.94 10.23 3.4

Aberdeen City 1.24 2.35 1.95 0.74

Aberdeenshire 1.39 2.08 1.74 0.72

Stirling 0.71 0.98 0.73 0.3

Renfrewshire 1.79 2.57 2.28 0.86

N Lanarkshire 3.78 5.25 4.34 1.62

D & G 1.39 2.12 1.7 0.62

Scotland 48.05 72.73 60.37 48.05

DLA Mobility Component (Caseload thousands)

All Ages Higher Rate Lower Rate Nil Rate

Glasgow 29.91 20.94 6.23Aberdeen City 5.27 3.6 1.12Aberdeenshire 6.05 3.07 1.09Stirling 3 1.4 0.42Renfrewshire 7.5 4.2 1.42N Lanarkshire 17.19 7.6 2.97D & G 6.16 2.9 1.2

Scotland 197.36 111.54 37.72

DLA Mobility Component (Caseload thousands)

Working Age Higher Rate Lower Rate Nil Rate

Glasgow 14.54 16.39 3.56

Aberdeen City 2.95 2.67 0.67

Aberdeenshire 3.28 2.1 0.56

Stirling 1.44 1.06 0.22

Renfrewshire 3.54 3.17 0.77

N Lanarkshire 7.86 5.61 1.52

D & G 3.15 2.02 0.65

Scotland 99.38 83.31 21.18

Unemployment• Unemployment figures Feb 2011

Glasgow LHA ratesRates from 1st March to 31st March 2011:Size Criteria Weekly room rate• Shared accommodation £69.23• 1 Bedroom £98.08• 2 Bedrooms £126.92• 3 Bedrooms £150.00• 4 Bedrooms £230.77• 5 Bedrooms £346.15

DLA Care Component (Expenditure)

DLA CARE Higher Rate Middle Rate

Lower Rate

WeeklyTotal

AnnualTotal

20%Annual

Glasgow £1,008,882.00 £1,012,882.00 £285,197.50 £2,306,961.50 £119,961,998.00 £23,992,399.60

Aberdeen City £156,366.00 £178,772.00 £51,923.00 £387,061.00 £20,127,172.00 £4,025,434.40

Aberdeenshire £182,784.00 £176,382.00 £49,459.50 £408,625.50 £21,248,526.00 £4,249,705.20

Stirling £95,676.00 £80,304.00 £21,603.00 £197,583.00 £10,274,316.00 £2,054,863.20

Renfrewshire £236,334.00 £213,188.00 £65,756.50 £515,278.50 £26,794,482.00 £5,358,896.40

N Lanarkshire £537,642.00 £453,144.00 £133,597.50 £1,124,383.50 £58,467,942.00 £11,693,588.40

D & G £192,066.00 £174,948.00 £50,028.00 £417,042.00 £21,686,184.00 £4,337,236.80

DLA Mobility Component (Expenditure)

DLA CARE Higher Rate

Lower Rate

WeeklyTotal

AnnualTotal

20%Annual

Glasgow £1,491,013.50 £396,813.00 £1,887,826.50 £98,166,978.00 £19,633,395.60

Aberdeen City £262,709.50 £68,220.00 £330,929.50 £17,208,334.00 £3,441,666.80

Aberdeenshire £301,592.50 £58,176.50 £359,769.00 £18,707,988.00 £3,741,597.60

Stirling £149,550.00 £26,530.00 £176,080.00 £9,156,160.00 £1,831,232.00

Renfrewshire £373,875.00 £79,590.00 £453,465.00 £23,580,180.00 £4,716,036.00

N Lanarkshire £856,921.50 £144,020.00 £1,000,941.50 £52,048,958.00 £10,409,791.60

D & G £307,076.00 £54,955.00 £362,031.00 £18,825,612.00 £3,765,122.40

Potential DLA Loss to Glasgow

Disability Living Allowance (DLA): GLASGOW August 2010 all ages

  Weekly Annual 20% Loss

Mobility Component £1,887,826 £98,166,978 £19,633,395

Care Component £2,306,961 £119,961,998 £23,992,399

Total yearly DLA loss £43.62 Million

Potential DLA Loss to Scotland

Disability Living Allowance (DLA): Scotland August 2010 all ages

  Weekly Annual 20% Loss

Mobility Component £11,952,079.00 £621,508,108.00 £124,301,621.60

Care Component £13,854,468.00 £720,432,336.00 £144,086,467.20

Total yearly DLA loss £268 Million

CPI v RPI Example

JOBSEEKER'S ALLOWANCE (JSA):

  APRIL

JSAWeekly

RISE WITHCPI

RISE WITHRPI

WEEKLYCHANGE

ANNUAL CHANGE

AGE 18-24 £51.85 £53.46 £54.24 £0.78 £40.56

AGE 25+ £65.45 £67.48 £68.46 £0.98 £50.96

CPI 3.1% RPI 4.6% September 2010.

Impact to Glasgow

JOBSEEKER'S ALLOWANCE (JSA):

  AGE 18-24 AGE 25+ TOTAL

No of Claimants in Glasgow (May 2010) 6,380 17,520 23,900

Yearly loss per person £ 40.56 £50.96

Total yearly JSA loss to Glasgow £258,772.80 £892,819.20 £1.15 Million

Impact to Scotland

JOBSEEKER'S ALLOWANCE (JSA):

  AGE 18-24 AGE 25+ TOTAL

No of Claimants in Scotland (May 2010) 36,950 91,420 128,370

Yearly loss per person £ 40.56 £50.96

Total yearly JSA loss to Scotland £1.50 Million £4.63 Million £6.13 Million