Financial Inclusion ForumSeptember 2013

Welfare Reform Update

Key HB reforms

• Local Housing Allowance• Non-Dependant Deductions• Bedroom Tax• Discretionary Housing Payments• Local Council Tax Scheme• Benefit Cap• Local Welfare Provision• Universal Credit

Local Housing Allowance

• Commenced April 2011, all reforms now implemented

• The annual loss in Bolton is estimated at £2.8M per annum and over 6,000 customers have been impacted

• Average losses on the whole relatively moderate compared to social sector reforms, for example the introduction of a 30 th percentile resulted in an average loss of approximately £5 per week compared to an average loss of £12 per week with regard to bedroom tax.

• DHP’s have been used to provide assistance and this was particularly the case with customers impacted by the under 35’s rules

• Full £200K DHP subsidised allocation was spent in 2012/13

Comparison of Non-Dependant deduction rates

2010/11 bands 2010/11 amounts

2013/14 amounts

Increase

Under 25 and ESA(IR) main phase £7.40 £13.60 £6.20

IS/JSA(IB), ESA(IR) not in work (25+)

£7.40 £13.60 £6.20

Less than £126 £7.40 £13.60 £6.20

£126 to £186 £17.00 £31.25 £14.25

£186 to £242 £23.35 £42.90 £19.55

£242 to £322 £38.20 £70.20 £32.00

£322 to £401 £43.50 £79.95 £36.45

£401 and above £47.75 £87.75 £40.00

Under Occupancy•Annual loss approximately £2.2M with approximately 3,500 customers impacted – pensioners exempt.

•Average national loss estimated at £14 per week, approximately £12 per week in Bolton

•Some RSL’s reporting that up to 50% of tenants impacted by the have not paid anything towards the shortfall – combination of won’t pay and can’t pay

•Major impact on DHP administration

•B@H have committed to a no homelessness pledge providing arrears are purely under occupancy related and tenant willing to accept alternative accommodation

•Government challenged at Tribunal

Policy changes, case law and court cases

• Foster carers (limited to 1 bedroom) and armed forces personnel provided with protection

• Disabled children afforded some protection via case law if it can be shown that the disability prevents room sharing – will be made law in Autumn 2013

• Government won challenge in High Court regarding general disability but cases likely to go to the Court of Appeal

• Couple of successful cases in Scotland at Lower Tribunal regarding under occupancy and room size – not binding & DWP appealing

• Additional £65K in DHP money and £20M available nationally for successful bids

DHP’s•Subsidised DHP pot for 2013/14 is £692K (includes additional £65K)•1,123 claims received as at 1st September•Committed spend currently £259K•Expecting an Autumn surge in spending as awards expire•Many claims being refused on the basis of excess income

Local Council Tax Support• Effective from April 2013

• In Bolton losses limited to £370K in year one following a successful bid for an additional grant

• Maximum losses capped at 8.5% and aimed at customers who have the best ability to pay

• Approximately 90% of customers in Bolton not impacted by the changes to the local scheme – pensioners exempt

• Council Tax Reduction Scheme operates similar to DHP’s – very small number of claims so far.

• Scheme will be reviewed for 2014/15 but likely there will be no change in terms of savings requirement but keen to review administrative process

Benefit Cap• Commenced Monday, 15th July 2013 and ends next week.

• In Bolton the last DWP scan identified 251 cases – however only received 175 cases – in line with GM experience

• Losses range from £7 per week to in excess of £150 per week

• Council’s run homeless accommodation (Benjamin Court) not protected from the cap and rents are high so has been some impact in this area

• Again DHP’s will be used in some cases to provide temporary support but only realistic solution for customers is to move into employment

• Can support activity of registered providers – B@H have around 30 tenants impacted and want to engage with all of them

Local Welfare Provision

• Emergency Support Awards

Local Welfare Provision

• Community Support Awards

Local Welfare Provision

Local Welfare Provision

• Still early days and already looking at ways to improve the scheme including:

–Use of Pay Point vouchers to replace manual fuel top ups;–Pre-populated goods specific payment card to replace Argos trips for sundry items;–More proactive use of the Credit Union;–Improvements to website;–Referral system to partners to provide long term support

• Also preparing for a 6 month review of the scheme – e-mail will be sent to all partners next month to start consultation and agreed amendments will be introduced in the 3rd quarter of the financial year

Universal Credit

• Pilots are only testing standard awards and housing costs

• IT is basic and not testing children and disability related cases

• Not testing taper, disregards or any self employed

• Pension credit transfer of housing costs planned for Sept 2015 at the earliest (pushed back from October 2014)

Universal Credit• 4 pilot sites in the North West – 3 are located in Greater

Manchester:– Wigan– Oldham– Tameside– Warrington

• Only 6 new sites from October 2013:

– Harrogate– Bath– Rugby– Shotton– Hammersmith– Inverness

Universal Credit

• Current UC project in crisis and considered high risk

• New man at the top – previously involved in 2012 Olympics

• Pilot sites reporting whole range of issues

• Opposition setting up a UC Rescue Committee

• Opposition also looking to devolve power from DWP to Local Councils