FINANICAL INCLUSION & WELFARE REFORM

Presentation by Sharon MacPherson & Robert Hinds

Programme

Financial exclusion in Scotland –

what are the facts? Welfare reform – what’s happening & when? Impact on your clients Group discussion Feedback Conclusion

Financial Inclusion – why is it important?

No access to bank accounts and Direct Debit Lack of affordable credit Charging ATMs Cheque cashing/ payday loans/Cash

pawnshops Increased insurance premiums Higher utility costs- fuel/ telephone Poverty Premium- £1,300 per annum

Financial inclusion – the facts

SHS best indicator Key questions on financial circumstances- How households are managing financially- Savings and investments- Banking

How are households managing financially?

0

10

20

30

40

50

60

70

Up to£10k

£10-£20k

£20-£30k

over£30k

All

Manages well

Gets by

does not managewell

Savings & Investments

01020304050607080

Up to£10k

£10-£20k

£20-30K

Over£30k

All

Yes

No

Refused

Don’t know

Banking

% Up to £10k

£10-20K

£20-30k

Over £30k

15% dep

All

Bank account

87 90 94 96 82 92

BS account

12 15 22 32 10 21

CU account

1 2 4 4 4 3

PO account

11 10 4 2 14 7

None 3 1 1 0 3 2

Welfare reform – What’s happening & when?

Wide ranging reforms Focus on 5 key areas:• Housing Benefit changes• Social fund • Tax Credits• Universal Credit• DLA / PIP

Housing Benefit changes

April 2011: non dep deductions up by 27% April 2011: Local Housing Allowance Cases LHA: method by which HB is calculated in PS Removal of up to £15 weekly excess Max rent payable in LHA cases cut (50th to 30th) Removal of 5 bedroom rate (max now 4) Capping of LHA rates

Housing Benefit changes 2012

1 Jan 2012 (in private sector)- Shared room rate (bedsit rate) extended from single under 25 to single under 35- Previous exemptions still apply- Additional exemptions but only for those aged 25 or over- Applies to new claimants as per 1 Jan 2012 straight away- Existing claimants have limited protection will all be moved over by end of 2012

Housing Benefit

April 2012- Non dep deductions increased by 21%- April 2013: Social Rented Sector- Entitlement for working age claimants reflect

household size- 1 spare bedroom 14% reduction in rent allowed

for HB

- 2 or more spare 25% reduction apply

Social Fund

From 2013- Abolition of the discretionary social fund- CCG, CL replaced by local system- BS and CL alignment loans replaced by

payments on account- Abolition of Social Fund Commissioner and the

Independent Review Service

Tax Credits

April 2012:

- Backdating reduced from 3 to 1 month

- 50 plus element removed from WTC

- Introduction of £2,500 disregard

- Increase in hrs per week couples with children

must work to qualify from 16 to 24

- £40k second income threshold removed

Universal Credit

Means tested benefit People of working age Replace IS, income based JSA, income related

ESA, HB and both types of tax credits Paid monthly* Single payment* Claim online

Universal Credit

APRIL 2012: limited pilot OCTOBER 2013: roll out for new claimants and

some existing claimants migrated over APRIL 2014 – OCTOBER 2017: firstly migration

for households who will benefit most and then by

end of 2015 full scale migration to UC

Disability Living Allowance/PIP

2013- Introduction of Personal Independence

Payments as a replacement for DLA for working

age claimants- Continue to be non means tested and non

contributory- Paid in work or out of work (?)- Intention to cut claimants and budget by 20%

Disability Living Allowance/PIP

New assessment tool similar to ESA Timetable APRIL 2013 – Introduction for new claimants Bootle

Benefits Centre JUNE 2013 – Intro for new claimants across GB OCT 2013 – Limited migration of existing claimants JAN 2014 – End 2016 – Full scale migration exercise

HOW DO WE RESPOND?

FEEDBACK

CONCLUSIONS