Download - Welfare Reform Impacts
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Welfare Reform ImpactsSam Lister, Policy & Practice Officer, CIH
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• The breadth of the reforms• Why they have taken place• Scale of impacts• Future reforms: universal credit• How might we better approach campaigning
Aims: understand better
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Welfare & public expenditure
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• UK government expenditure on social security How much is spent annually (£ million) What are the three biggest items of expenditure How much does it save from bedroom tax (£ million)
• What do we spend on each of these Health Education Police Housing (non HB)
Public services & expenditure
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Before the crash…how government spent
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HB
Tax Credits
HB
ESA
JSA
IS
PC
Universal Credit
PensionCredit
Welfare benefits: old & new
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Welfare reform impacts
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• How many reforms can you identify (2010) • Who do you think has been worst affected by
welfare reform Numbers (largest group) By loss (amount of benefit lost)
Welfare reform awareness
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Region Estimate affected
% working age HB tenants
Average loss
North East 50,000 37% £13
North West 110,000 43% £14
Yorkshire 80,000 43% £13
East Midlands 40,000 27% £12
West Midlands 60,000 31% £13
East of England 50,000 30% £15
London 80,000 22% £21
South East 40,000 22% £15
South West 30,000 20% £15
Bedroom tax impact
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The cap: HB headroom
Single Couple Couple + 1 Couple + 2 Couple + 3 Couple + 40.00
100.00
200.00
300.00
400.00
500.00
600.00
71111.45 111.45 111.45 111.45 111.45
279.00
388.55
306.21241.22
176.23111.24
20.30 33.70 47.10 60.5062.04
113.63
165.22
216.81
JSA Child Benefit Child Credits Maximum Housing Costs
£ pe
r wee
k
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Household benefit cap: impact on 3 child families in London and the south east.
Benefit cap in the South East
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• Similar structure to DLA (care, mobility)• Two rates of care, two rates of mobility• In effect the end of the lower care rate• Tougher ESA style medical test with points threshold• Regular reviews and fixed term awards• 500,000 taken off projected caseload by 2015/16
• Loss of disability and/or severe disability premium• No severe disability premium in universal credit• Losses from £21 to £110+ per week for single
PIP and consequential
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Impact Assessment Annual Policy Costings 2014/15* (£ million)• Social sector size criteria 500
• Non dependent deductions 340• Household benefits cap 265
• Local housing allowance (30th percentile and CPI indexation) 880
• LHA shared room rate extension 215
• Disability living allowance to personal independence payment 1240• Time limiting contributory ESA
1180• Tax credits (2010) 1225• Tax credits (2011) 1630
Housing support welfare cuts
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Welfare reform measure Estimate affected Average lossSocial sector size criteria 660,000 £14
Benefits cap 56,000 £93
LHA 30th percentile 775,000 £9
LHA national caps 21,000 £74
LHA SAR extension 63,000 £41
DLA to PIP 500,000 Minimum £21
Time limiting ESA 625,000 £52
Tax credits in-work 4,846,000 £12
Tax credits out-of-work 1,462,000 -£7
Losses welfare reforms
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The Guardian 2 January 2012
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Universal Credit
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• Better off in-work• Keep more as you earn more• Smoother transition between in and out of
work• Single combined benefit• Payment to tenant• Centralised administration
Universal credit main features
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Current benefits & tax credits
80 100
120
140
160
180
200
220
240
260
280
300
320
340
360
380
400
420
440
460
480
500
520
540
560
580
600
620
640
660
680
0
100
200
300
400
500
600
Net pay Child benefit Jobseekeer's allowance Working tax creditChild tax credit Housing benefit Localised CTRS
Weekly gross pay
Net p
ay, b
enef
its a
nd ta
x cr
edits
Couple, two children, one earner, rent £75.00, council tax £23.00
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Universal credit
£80.0
0
£100
.00
£120
.00
£140
.00
£160
.00
£180
.00
£200
.00
£220
.00
£240
.00
£260
.00
£280
.00
£300
.00
£320
.00
£340
.00
£360
.00
£380
.00
£400
.00
£420
.00
£440
.00
£460
.00
£480
.00
£500
.00
£520
.00
£540
.00
£560
.00
£580
.00
£600
.00
£620
.00
£640
.00
£660
.00
£680
.00£0.00
£100.00
£200.00
£300.00
£400.00
£500.00
£600.00
Net pay Child benefit Universal credit Localised CTRS
Weekly gross pay
Net p
ay a
nd b
enef
its
Couple, two children, one earner, rent £75.00, council tax £23.00
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Couple, two children, one earner
Current & UC compared
£80.0
0
£100
.00
£120
.00
£140
.00
£160
.00
£180
.00
£200
.00
£220
.00
£240
.00
£260
.00
£280
.00
£300
.00
£320
.00
£340
.00
£360
.00
£380
.00
£400
.00
£420
.00
£440
.00
£460
.00
£480
.00
£500
.00
£520
.00
£540
.00
£560
.00
£580
.00
£600
.00
£620
.00
£640
.00
£660
.00
£680
.00£0.00
£100.00
£200.00
£300.00
£400.00
£500.00
£600.00
Earnings plus basic benefits (excluding CTRS) HB/WTC/CTC
Earnings plus ba-sic benefits (ex-cluding CTRS) UC
Gross weekly pay (£)
Wee
kly
net
earn
ings
& b
enef
its (e
x CT
R)
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• Better off in-work• Keep more as you earn more• Smoother transition between in and out of
work• Single combined benefit• Payment to tenant• Centralised administration
Universal credit main features
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Tenant payment• How do you view it / what will be the impact
Increased rent arrears? Difficulty managing money?
• Any positives? Public perceptions? Landlord tenant relationship?
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Any lessons learned
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• The numbers are mind blowing• The bedroom tax is one element only• Does it matter to us if private tenants lose out• Some of the decisions raise difficult questions
does it help our cause if we ignore them• Wider public perceptions are important –
because we are public too• What matters is how much support people
receive not how it is paid
Some things to think about
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The Guardian 2 January 2012