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Supporting Older

People Conference

SP1: Welfare reform – securing your income

Speakers: Graham Mowat

Universal Credit Directorate Department for Work and Pensions

Sian Williams

Head of Financial Inclusion Toynbee Hall

Active chair: Lee Sugden

Executive Director of Resources Wakefield and District Housing

1

Universal Credit

Graham Mowat, Universal Credit Programme, DWP

20th March 2013

2

Why Reform The Welfare System ?

Two fundamental problems with the current welfare system:

• poor work incentives - because of the swift withdrawal of benefits when taking

a job, too many people have simply felt that work doesn’t pay

• complexity - the system has become incoherent and costly – because people

don’t know where they stand, stepping into the world of work can appear risky

Cost of a failing benefit system

• 5 million people “trapped” on out of work benefits

• 1.9 million children living in homes where no-one has a job.

• Complexity has increased the rate of fraud and error, costing the taxpayer more

than £5.5 billion every year.

3

What is Universal Credit ?

A policy

A benefit

A gateway

A platform

An ambition

that tackles welfare dependency, poverty and

worklessness by making work pay

that replaces a complex system of working-age benefits

and credits with the Universal Credit and a single set of

rules

that together with our employment support programmes,

helps people into work

that will help us deliver an internet-age service whilst

continuing face-to-face support for those who need it

transforming lives and society through work

4

Personal Independence

Payment

Universal Credit

Simplifying A Complex System

Child Benefit, Carer’s Allowance (will remain)

Income related JSA

Income related ESA

Income Support (including SMI)

Working Tax Credits

Child Tax Credits

Housing Benefit

Disability Living Allowance

Contributory JSA and ESA (conditionality rules changing)

Council Tax Benefit (Localised Council Tax Schemes)

Current system

Pension Credit … to include support for housing

and children

5

A simpler system with clear work incentives

200

100

0

100

£1

00

£5

00

£4

00

£3

00

£2

00

£100 £300£200

£0

£400 £500

Universal Credit

payment

Total in-pocket

income

Universal Credit: lone parent

with two children

£600 £700

6

Key Features

• A single payment for people out of work and in work.

– UC is designed to allow people to keep more of their benefit in the transitional period back to work. A simple disregard structure and single taper rate means

people can clearly see how work pays.

• UC brings a new type of claimant for DWP

– many UC claimants will be in work – some may never have had contact with Jobcentre Plus before.

• In-work UC claimants will be subject to conditionality

– may be required to undertake activity to help increase their earnings – working on new ways of determining this conditionality.

• Real Time Earnings Information

– introduction of HMRC’s Real Time Information system - direct link between an employee’s pay and UC award

– employees will be able to take on more work

7

Universal Credit - An On-Line Service

• Universal Credit will be a digital service

• Encouraging claimants to use the online service

– designing a compelling and easy to use service – user-centred design

– working across government, private and voluntary sector to get more people online, e.g. with digital champions

– accessible system, compatible with the key assistive software technologies

• Support for those unable to use online system

– supporting online channel through telephony, high street access (through Jobcentres and third parties)

8

Universal Credit – why a digital service?

• The future is digital

• The service will be digital by default because

available flexible responsive

informative integrated accessible

Most jobs need digital

skills

Mobile devices more

prevalent

Online services help

people save money

– it is better for claimants, staff and taxpayers. It is:

9

Cla

imants

Time 2013

2017

Assisted Self Service 1 : Few

Self Service 0 : Many

Supported Service 1 : 1

Claimants will:

• change how they currently interact with

DWP

• use the support of friends and family for

online access

• have provision to use online capability in

delivery partners and Jobcentres

• self serve through telephony

• We and our delivery partners will

provide a High Street environment for

claimants to access online

• We will provide telephony support to

claimants completing online transactions

• We will change the role of DWP agents in

telephony and Jobcentres

• We and our delivery partners will give

claimants specialist support

• We and our delivery partners will assist

self service and support claimants in other

channels

• We and our delivery partners will help

claimants self serve

Online Self Service

Telephony Self Service

Access to online Self Service provided by friends/family,

High street delivery partners or Jobcentres

Face to face service provided in delivery partners, Jobcentres, home visits

Telephony Service

Telephony support for online transactions

High Street Access and support for online service provided

- delivery partners or Jobcentres

Claimants of UC will become increasingly self-sufficient and

prepared for the labour market, enabled through delivery of

self service on every channel

Digital by Default – Self Service every channel

10

What are we doing to prepare for channel shift?

We plan to work across government, private sector and voluntary sector boundaries to create, support

and encourage opportunities to deliver the digital message.

DWP

We are increasing activities and support to boost take

up of online services, e.g.:

through Digital Champions,

through providing computer access in Job Centres

through implementing JSAOL and using the lessons

learned to shape future actions to support channel

shift

Private Sector

In partnership with stakeholder organisations,

persuading major employers to support and

encourage their people to use work facilities to

access online services

During migration

Delivering targeted & timed advice and guidance to

claimants on why and how to get online

Public Sector

Developing innovative approaches to getting social

housing tenants online through the pilot Digital Deal

Initiative

Using customer contacts to deliver ‘digital

interventions’ (e.g. when tax credits are claimed)

HMRC are introducing iForms this autumn and

improving information services on new website

Voluntary Sector

Collaboration with Go On to extend our reach to a

wider range of delivery partners than we can

influence on our own

Working with voluntary sector who help our

claimants

Providing advice, support and resources to

claimants and potential claimants

11

Paying Universal Credit

• Universal Credit will be paid monthly, direct to the household

– paying monthly like a salary would be paid – monthly budgeting will ease the

transition to work

– a single, direct payment enables households to see the effect decisions about

work, encourages personal responsibility

• Claimants may not be able to budget on a monthly basis

– Budgeting support guidance published

• Some claimants do not have bank accounts

– working with financial product providers to make services more supportive to

low income households

– range of suppliers exploring feasibility of new financial products

• Housing costs paid to the claimant, not the landlord

– Recognise concerns that some vulnerable people may not able to cope with rent

payments, impact on their income and costs

– in exceptional cases will allow alternative payment arrangements - such as

more frequent payments, split payments, payments direct to landlords - for

those not able to manage Universal Credit, even with support.

12

Universal Credit - Claimant Journey

Make Claim

for Universal

Credit Submit claim

Award

notification

and payment Interview

Confirmation

of interview Start work

Provide

personal

details Seek work Organise

finances

13

Universal Credit- DWP face-to-face services

Make Claim

for Universal

Credit Submit claim

Award

notification


Confirmation


Provide

personal


finances

•Signpost

•Access to online application

•Access to telephones

•Support those most in need

•Confirm claimant ID

•Extra support

•Agree Claimant Commitment

•Jobsearch support

Discuss budgeting

support progress

•Jobsearch progress

•Support jobsearch

•Enforces conditions of Universal

Credit claim (sanctions)

•Change of circumstances

•Help self-report earnings

•Revise Claimant Commitment

14

Universal Credit- DWP telephony services

Make Claim

for Universal

Credit Submit claim

Award

notification


Confirmation


Provide

personal


finances

•Signpost people to claim online

•Support those most in need

•Confirm interview details and

evidence required

•Promote Universal Jobmatch

Discussing requests for

budgeting advances

Responding to appeals

•Record change of circumstances

•Help self-report earnings

•Revise Claimant Commitment

15

Universal Credit - Implementation

APRIL 2013

From OCT 2013

Before the end of 2017

2017

Pathfinder begins

National roll-out of Universal Credit starts –

gradual introduction and testing of further

scope and functionality

•Phasing out of claims for existing benefits

•Expansion of new claims taken from people in

work and moving current claimants to Universal

Credit in phased approach

•Roll-out of UC completed

16

Direct Payment Demonstration Projects (started June 2012)

• Testing key elements of incorporating housing support into Universal Credit whilst

protecting the financial position of social landlords

Local Authority-led pilots (2013 focus - from autumn 2012)

• Testing service integration, particularly design of face-to-face service delivery, at local

level for improved claimant support and work focus

Pathfinder (planned for April 2013 in Greater Manchester and Cheshire)

• An early implementation of Universal Credit – to enable us to learn from experience and

build confidence.

Live Innovation Trialling (started in April 2012)

• To trial components of the end-to-end Universal Credit service proposition in a live

environment with real people in real time

Model Office (throughout implementation)

• A series of incremental, integrated tests in a ‘controlled’ environment that will be built as

the Universal Credit system, processes and support products are developed

Universal Credit implementation - testing before

delivery

17

Direct payments demonstration project Six local authorities & housing associations are now trialling direct payments of Housing Benefit to selected tenants Projects running from June 2012 to June 2013

Local authority-led pilots Twelve pilots are running from autumn 2012 to September 2013 to explore how local expertise can support residents to claim Universal Credit. 2013 focus pilots will look at: - encouraging claimants to access online support independently; - improving financial independence and managing money; - delivering efficiencies and reducing fraud & error; and - reducing homelessness.

North Dorset

Rushcliffe

Melton

Bath & NES

Oxford

Lewisham

West Lindsey

Caerphilly Newport

Birmingham

North Lanarkshire West Dunbarton

Oldham Wigan

Dumfries & Galloway

Edinburgh

Wakefield

Shropshire

Southwark Torfaen

Key: LA-led pilots

Pathfinder preparation projects

Direct Payment Demonstration Projects

18

Communications

We have begun the process of explaining Universal Credit and how it will affect claimants and stakeholders. We are also working closely with over 70 partner organisations (including several housing bodies) to develop joint communications.

We will soon be commencing several high profile activities to raise awareness of Universal Credit, including,

– A Partnership Toolkit, including quick guides covering for example, housing, children, budgeting, work and disability, frequently asked questions, overview of Universal Credit, case studies, and links to useful tools, for example on budgeting advice.

– Public Information leaflets, describing the new service, how it will affect people and information about seeking additional support;

Information will be available for claimants shortly at www.gov.uk

http://www.gov.uk/

19

Universal Credit Pathfinder

What is the Universal Credit Pathfinder ?

•Pathfinder tests the end-to-end process for Universal

Credit

•Teaches us how to improve our service offering before

national roll-out

•Provides an opportunity for re-design, before extending

the service and bringing in more complex cases

•Pathfinder commences 29th April 2013

Who is in scope for Pathfinder ?

•Pathfinder will focus on new single, unemployed people,

with or without rented housing costs, in selected areas in

Tameside, Wigan, Oldham and Warrington local

authority areas.

20

Universal Credit – Delivery Partnership Services

Local Authorities

• Local Authorities are integral to the delivery of Universal Credit and bring many skills and

expertise with them to help us support claimants back into work, for example:

– Access to online services

– Budgeting support

– Support for claimants with complex needs

HMRC

• Real Time Information (RTI) simplifies PAYE reporting processes for employers

• Link with RTI for UC will mean we can tell how much someone is earning

21

Local Support Service Framework

Context & Objectives

• The framework sets out how claimants whose service needs cannot be met online will be served and helped as far as possible to move online

• In addition it addresses the definition of claimants with complex needs; what particular services they need and how these will be provided through both existing and new arrangements

• Who is likely to need additional support ?

• What services will be needed

– Existing local level support services ?

– Newly required local level support services ?

• How we will make it work using a delivery partnerships approach ?

• All of the above will be based on recognition that LAs have a central role in providing existing services for such claimants now; and that in future delivery model proposals for non-online services will be co-developed with LA colleagues and representatives.

• Link to LSS framework: http://www.dwp.gov.uk/docs/uc-local-service-support-framework.pdf

http://www.dwp.gov.uk/docs/uc-local-service-support-framework.pdf









22

REQUIREMENT FOR A

PERSONAL BUDGETING

STRATEGY IS DRIVEN BY

THESE CHANGES

Universal Credit – Personal Budgeting Support

Housing costs

direct to tenant

Single payment

to household

Monthly

Payment

We want to help

people to be able

to manage their own

finances successfully,

whether they are

in or out of work

23

Alternative

Payment

Arrangements

Money

advice Budgeting

Accounts

Claimants

managing their

money

Personal Budgeting Support – Overview

24

Alternative Payment Arrangements

• For a minority of claimants, alternative payment arrangements may be required; these might include

– paying the rent directly to the landlord

– making more frequent than monthly payments

– splitting the payment within the household

• We will also have the option to make rent payments direct to the landlord if a claimant reaches a certain

level of rent arrears.

• These alternative payment arrangements will be considered on a case by case basis and assessed on

their individual merits.

• When considering alternative payment arrangements, a series of Tier 1 and Tier 2 factors indicating

potential support needs will be used to help to decide if these arrangements are appropriate to an

individual.

• The decision about whether an alternative payment arrangement is suitable will be made by a UC adviser

through the PBS process. Information from a third party i.e. the claimants’ representative, their

caseworker and / or their landlord can be used to inform a decision.

25

Budgeting Accounts

• 75% of people are paid earnings monthly in arrears. Monthly payment of benefit will prepare households for the reality of budgeting on a monthly income, will ease the transition into work, and will make it easier for households to take advantage of cheaper tariffs for essential costs such as utility bills.

• The majority of Universal Credit claimants will continue to be paid through mainstream current or basic accounts.

• Having access to a transactional account will enable claimants to make electronic payments out of the account – such as Direct Debits or standing orders – for bills such as rent, gas and electricity.

• Up to 1.3 million potential UC claimants currently do not use a transactional bank account to manage their benefit payments. Most of these individuals currently use a Post Office Card account (POCa) which does not offer transactional facilities.

• We are looking at ways to make accounts with budgeting functionality, such as ‘jam jar’ accounts, more widely available. We are consulting with financial providers across the private, social and third sectors and considering the best ways to make these types of products more available.

26

Budgeting Advice

• Money advice will include:

– Online budgeting tools for claimants who can help themselves - such as those offered by Money Advice Service and Citizens Advice.

– Advice services offered by external organisations for those who need more support with, for example, getting a bank account or doing a monthly budget plan.

• Advice will be delivered through online, telephone and face-to-face channels by expert providers at a national and local level.

• A personal planner will be available on gov.uk to help claimants understand and prepare for financial changes arising from the introduction of Universal Credit. It asks claimants a set of questions about their readiness for claiming Universal Credit and, depending on the answers given, sets out an individual action plan.

• We are also trialing the new concept of a Budgeting Club for new and existing claimants. This will provide face to face practical help to claimants, initially in a group setting and subsequently on a one to one basis if needed.

• Personal Budgeting Support guidance is now available via the DWP/UCLA website – see links below:

http://www.dwp.gov.uk/docs/personal-budgeting-support-cover-note.pdf

http://www.dwp.gov.uk/docs/personal-budgeting-support-guidance.pdf

















27

Budgeting Accounts

• The easiest way for claimants to receive Universal Credit payments will be to have it paid into an account

that can receive electronic payments, like a bank account.

• Ideally that account should also allow the claimant to make electronic payments out of the account – such

as Direct Debits or standing orders – for bills such as rent, gas and electricity.

• Having access to a transactional account will help claimants to manage their monthly UC payment and

meet their rent payment commitments.

• Up to 1.3 million potential UC claimants currently do not use a transactional bank account to manage

their benefit payments. Most of these individuals currently use a Post Office Card account (POCa)

which does not offer transactional facilities.

• We are looking at ways to make accounts with budgeting functionality, such as ‘jam jar’ accounts, more

widely available. We are consulting with financial providers across the private, social and third sectors

and considering the best ways to make these types of products more available.

28

Conclusion

• Universal Credit is at the heart of the Government’s welfare reforms – aims to

simplify the benefits system and make work pay, while providing support

for those who need it.

• We are making good progress in the design and delivery of Universal Credit.

• But we do not underestimate the scale of the change – that is why we are rolling

out Universal Credit incrementally – from April 2013 until 2017

• Housing Associations, along with other organisations, have a significant role to

play in the delivery of Universal Credit.

• We are working closely with key representatives from all of the housing

sectors, local authorities and the third sector, using your specialist

knowledge and skills to understand and meet the challenges, so we design and

deliver a successful service for our claimants.

Welfare Reform – supporting

your tenants to manage their

money and pay their rent

Sian Williams

Head of Financial Inclusion

Toynbee Hall March 2013

30

Universal Credit - Claimant Journey

Make Claim

for Universal

Credit Submit claim

Award

notification


Confirmation


Provide

personal


finances

Monthly UC and DP risks • Tenant uses rent money for other items/debts

• Tenant forgets to pay rent

• Tenant sets up DD payment but fails to keep enough money in account and DD bounces

• Tenant incurs fees through bounced DD

• Tenant relies on making cash withdrawals/payments and is victim of theft

• Tenant cannot budget monthly and falls short

• Individual is victim of financial abuse

Worst case scenarios? • Increase in rent arrears and evictions as tenants

fail to pay rent (for variety of reasons)

• Increase in social/tenancy churn due to evictions

• Increase in crime rate due to “rent muggings”

• Increase in debt through bounced DD fees

• Increase in malnutrition and cold homes as “four Fridays in a row” starts to hit

UC money management demands • Receive UC into an account

• Pay rent to landlord out of UC

• Manage money well on monthly basis

• Receive household money through one person

• Pay bills

• Avoid carrying/holding large sums of cash

• Avoid missed rent or other payments

Financial Inclusion solutions Increase the comparative value of each £1 available to spend through increasing access to and effective use of financial services

Prepare households to manage larger sums of money received in lump sum payments

Support individuals and their households to make the transition from un/underemployment into work

Step 1: Systemic or individual barriers? Improve the environment

through capacity building in organisations and

improving policies and processes

Improve people’s ability to navigate the

environment through financial capability

training

Financial Health

Key Environmental Elements of Financial Exclusion

• ID or AV not accepted for bank accounts, utilities and other essential services

• Lack of bank account acts as barrier to accessing other services and discounts e.g. DDs, affordable loans, insurance etc

• Lack of appropriate services and products

• Service providers need comes before user’s – e.g. Requirement to take up a social property within a week with only basic financial info about the property and no savings/access to affordable credit

Change yourselves/ environment • How many of your organisations:

– Think it’s all DWP or the tenants’ fault/responsibility?

– Have policies/practices that undermine financial health?

– Don’t support tenants to access a transactional account?

– Don’t have a strong relationship with local banks/CU?

– Engage tenants on money only when they’re in arrears?

– Give limited time to move in so increasing moving costs?

– Only give minimal pre-rental financial info?

– Don’t follow up on referrals to financial support to ensure the referral met the tenant’s needs?

– Have policies in place which staff aren’t trained or confident enough to implement?

Step 2: Know Your Tenant(s) • How many of your tenants:

– Use a POCA and don’t have a transactional account?

– Have a bank account they won’t use?

– Have a bank account in debt due to charges?

– Don’t trust Direct Debits

– Are frightened of managing their rent money?

– Prefer to pay more so they can control their money (Pre-pay electric)

• Think about INDIVIDUALS:

– we each have a unique relationship with money/finance so need individual combinations of tools/systems to manage our money well

– “One size fits all” thinking leads to expensive failures

Key Behavioural Elements of Financial Exclusion

• Self-excluding beliefs: “banks wouldn’t want me/treat me fairly” based on witnessed experience or cultural perspective

• Lack of (English) literacy or numeracy

• Feeling of powerlessness against corporate strength

• Embarrassment/Fear (e.g. Direct debits)

• Lack of knowledge about options and rights

• Lack of confidence to speak out/complain

• Lack of budgeting and contracting skills

Levels of financial exclusion • 2009/10: (provisional figures)

– Adults without individual access to a transactional account: 2.29m (4.8%)

– Adults living in a household without access to a transactional account: 1.15m (2.4%)

• Social landlords reporting between 5-25% tenants unbanked

• “Effectively unbanked” figure unknown

Low income/financial capability users’ preferences:

Low income users tend to dislike:

• Losing control of money (e.g. through imprecise payment dates for Direct Debits, lack of real time updates);

• Not being able to access cash easily (although the Southwark Demonstration Project suggests that the least financially capable fear having access to their rent money);

• Not knowing how much is in their account.

Step 3: Support tenant to access/use tailored solution

• Use consistent process to identify best “package” for tenant

• Have range of options – banking, CU, budget accounts, DDs, SOs, additional support etc

• Equip staff with the right solutions/knowledge

• Be prepared to invest time and energy – and money

• Be prepared for set-up glitches

• Be prepared for trial and error

UC opportunities • Increase financial inclusion

• S-t-r-e-t-c-h each £1 through good use of financial products and powerful purchasing

• Reduce poverty premium

• Put people back in charge of their money

• Broaden horizons

• Create a new financial culture for people receiving benefits

DP Demonstration Project: Family Mosaic in Southwark:

• Supported vulnerable tenants with complex needs to manage direct payments

• Almost none had a bank account

• Most distrusted themselves to manage rent money

• All were angry or frightened

• Majority were able to open an account, set up a DD and pay their rent directly – using a separate BBA at no cost

Getting tenants effectively banked • Used MAP tool to understand the individual:

– Their relationship with money

– Their household circumstances and specific needs

– Their history with banking/payments

– Their fears

– Their individual barriers (ID/AV,DRO etc)

• Access a range of suppliers and products:

– Encourage and support choice for engagement

• Provide intensive start-up support, followed by regular light touch support to keep banking effective for you and the tenant

Getting tenants effectively banked • Build relationships with financial services and support providers

• Consider investing in CU

• Establish support for tenants to get and remain banked

• Be aware of wider benefits to RSL, tenant and community of reducing the Poverty Premium:

• Have crisis plans in place for non-engagers

• Have remedial/bridging plans in place for teething problems

• It’s about more than just the rent!

Thank you and Questions?

Sian Williams

[email protected]

020 7392 2941

mailto:[email protected]

Current money management and use of financial products (1)

• Post Office Card Account: – Can receive benefits, pensions and tax credit

– Cannot make electronic or other payments

– Can withdraw cash and check balance at a PO during opening hours

– No overdraft facility

– Free to use

– Creates/supports cash-based budgeting behaviour

– Limits payments to cash - increases Poverty Premium


• Basic bank account: – Can receive any income payment

– Can make electronic payments

– Can withdraw cash and check balance at ATM


– Free to use excluding penalty charges

– Supports monthly/electronic budgeting behaviour

– Different banks’ BBAs have different level of service e.g. Access to whole ATM network or just issuing bank ATMs, open to undischarged bankrupts, level of fees, level of branch counter service etc


• Credit Union current account: – Works like a bank account

– Receives and makes electronic payments

– Visa debit card

– Access to ATM network


– Different CUs have different conditions e.g. Must also have a saving account etc

– CUs have different charges e.g. Lewisham Plus charges £1.25 pw plus £10 penalty charge for unpaid items


• Pre-paid cards: – Different providers offer different features at different charges

(see APS example)

– Some remain limited, requiring cash uploads or DD payments to transfer cash – don’t solve unbanked issue

– Most interesting act as a surrogate bank account with:

Unique sort code and bank account number

Faster payments

Direct Debit

• Providers include Allpay, Paypoint, APS

APS Pre-paid card option 1 • Annual Fee Product - £29.99 per annum

Additional Card / Card Replacement- £4.95

ATM cash withdrawal fee - £2.00

Card Transactions (payments using the card) - FREE

Direct Debit & Bill Payment Transactions - FREE

Card Account loading – FREE

Online Banking / Members Area - FREE

Free Euro & Dollar Currency Cards

No additional interest fees or DD bounce fees to pay

APS Pre-paid card option 2 • Monthly Fee Product - £4.95 monthly fee

Initial Card / Additional Card / Card Replacement- £4.95

ATM cash withdrawal fee - £2.00

Free and unlimited UK Purchases (payments using the card)






Creditbuilder available at no extra cost

APS Pre-paid card option 3 • Monthly Fee ‘Deluxe’ Product - £9.95 monthly fee Initial Card / Additional Card / Card Replacement- £4.95

ATM cash withdrawal fee in the UK – FREE

Free and unlimited UK Purchases (payments using the card)

0.5% cashback on all card purchases (i.e. spend £2,000 on card per month = £10)






Creditbuilder available at no extra cost

Budget or “Jam Jar” accounts • Provide designated “pots” within a transactional account to

ensure each bill has the right amount reserved for payment

• Range of providers: – Secure Trust Bank: main account and prepaid card, monthly fee £12.50

– CardOne Banking: main account and prepaid card, monthly fee £12.50

– ThinkBanking: bill account, spending account, monthly fee £14.50

• Credit Unions creating rent/budget accounts: – Most CUs make the payment manually which increases costs

– Costs to buy in IT for automated accounts costs c. £5K set up and £5K annual cost

– Online banking module costs £150K to buy from Coop

Anything else?

• DWP considering commissioning budget accounts –Unlikely to solve all unbanked issues

• DWP have contracted Citigroup and Paypoint to create new Simple Payment service for UC payments

• Toynbee Hall working with Payments Council and banks to develop alternative to DD

Implications for wellbeing

Less money

self-managed

Food & diet

Cold and safety

Stress & mental

wellbeing

Housing & relocation

Financial Inclusion Financial Inclusion is the process which ensures:

• a person’s in-coming money is maximised

• they can control their out-goings and

• they can exercise informed choices through access to basic financial services.

• Making each pound go as far as possible...

Access and use financial services “Poverty premium” costs average family est. £1280 p.a. through additional fees, charges and higher prices: – Bank account: correct use can reduce fees and charges and act as a

gateway to other services e.g. Authorised overdraft for credit – Payment methods: DD reduce and spread utility bills; other payment

methods mean often pay more for same goods and services Actions: – work with families w/o bank accounts or who could reduce outgoings

through more effective use of payment methods – Work with financial services providers to improve products – Overhaul own organisational processes where they cause detriment

(FIHCO) TOOLS: – MAP – 1-1 support or group work focusing on contracting and paying for

goods/services

Budgeting Universal Credit will be paid as a single monthly payment to the household: – Recipients will need to be able to budget on a monthly basis – Recipients will need to be able to budget as a household – Increased risk of financial abuse and misuse of benefit income – Increased risk of homelessness and debt due to poor budgeting Actions: – enhanced information for new tenants on costs; – workshops and 1-1 support on enhanced budgeting – ORG: work with financial services providers to develop practical products and information TOOLS: – MAP – 1-1 support or group work focusing on longer-term budgeting and using financial services as budgeting tools – Better financial info and support at lettings stage – New financial products e.g. Jam Jar accounts

Support employability Impossible to close the benefits gap without increase in income for majority of claimants: - Gap between benefits and pay likely to remain a significant worry for those moving in/out of work - Difficult to get work without bank account - Difficult to cover costs of getting a job (travel to interviews, interview clothes etc) Actions: - Targeted action to get unemployed banked - Create bridging loan funds (Local grants/Social fund) - Create job-seeking support funds Tools: - MAP - Partnerships with CU, LA, local employers, large companies

Key UC money management changes

Existing benefits structure

• Each benefit paid separately

• Fortnightly or weekly payments dependent on benefit claim date

• Benefits made individually to named claimant

• Payments made to any transactional account, Post Office Card Account or by cheque

• HB paid direct to landlord;

• Claims made in person, phone, post or online

UC and DP

• All UC benefits paid together

• Monthly payments in arrears (up to 38 days in arrears for first payment)

• Paid to one adult in household

• Paid to an account, ideally transactional, or through Simple Payment Service (Citibank/Paypoint)

• All Housing Benefit and LHA included in UC payment to recipient to pay landlord (unless exception made)

• Majority of claims made online

Tools MAP: Money, Access and Participation Tool • Needs-led tool to assess individual level of financial health (inclusion, capability, impact) • National programme led to tool’s development • Currently pilot phase 2, national roll-out March 2013 • 9 components, flexible mix • Creates baseline and needs assessment • Follow up use allows service impact evaluation • On-line or paper-based • Full training and support provided

How does fin ex affect deprived families?

• Reduces their disposable income: – Poverty Premium £1280? Testing that out in TH

• Increases inequality of their pound vs mine: – My £1 by DD buys more gas than theirs by pre-payment card

• Excludes them from employment and training: – No bank account = difficulties in getting work – Less money = difficulties accessing training, buying interview clothes or

paying for transport

• Isolates them further: – Less money for social activities – Less money for “mainstream” school/college/work activities – Perceived limit to their horizons due to “can’t afford”

• Exacerbates poverty, exclusion and inequality

Tools Financial Inclusion Health Check for Organisations: • Tailored analysis of organisational impact on service users’ financial health • Data gathered through interviews and focus groups with senior and front-line staff and service users • Measures reality gap between policy, practice and impact on service users • Recommends action plan for quick wins and strategic/systemic improvements • Full follow-up offered: strategy – training - support

Universal Credit Pilot • Toynbee Hall supporting Family Mosaic • 500 households in Southwark • Mixture of: – 1-1 support for most vulnerable households – Workshops and information for all – Community Champions to spread the word

• Monitoring impact on families through MAP and sharing results with sector

Financially Inclusive Tower Hamlets FITH taking grass-roots joined-up approach to FI: TH has 3 of

most financially excluded wards in UK despite presence of Canary Wharf, City of London and numerous FI services

Programme is determined by the Steering Group, which anyone can join.

3 Work streams have begun, with more to follow as more partners join:

Financial Literacy – e.g. training residents to

become qualified Money Mentors

Comms – promoting existing services and finding

out what people want/need

Protecting Vulnerable Adults

– addressing specific needs

Toynbee Hall leading in

partnership with LBTH

30+ partners including housing

providers, JCP, 3rd Sector

Aim is to raise overall level of financial inclusion through:

Raising levels of financial capability through training,

volunteering, advice and support

supporting organisations to provide better

financial inclusion offering for service users and reduce

the impact of FE on service providers

Supporting Older

People Conference

SP1: Welfare reform – securing your income

Speakers: Graham Mowat

Universal Credit Directorate Department for Work and Pensions

Sian Williams

Head of Financial Inclusion Toynbee Hall

Active chair: Lee Sugden

Executive Director of Resources Wakefield and District Housing

supporting older people conference - amazon s3s3-eu-west-1.amazonaws.com/doc.housing.org.uk/... ·...

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