28 July 2015

Welfare Benefit Reforms 2015

Impact on Residents and Services

Overview

• Context

• Key Changes

• Budget 8 July 2015

• Universal Credit update

Outline of other support available

Context

• 22,652 households receiving Council Tax Reduction

• 17,932 households receiving Housing Benefit

• 4,540 private-rented households receiving Local Housing Allowance

• 13,392 social housing households receiving Housing Benefit

• (June 2015)

February 2011

• Re-assessment and migration of customers in receipt of

Incapacity Benefit

April 2011

• Changes to the annual increase in Benefit rates (a lower

increase)

• Non dependant deductions increased

• Local Housing Allowance rates reduced – based on bottom

1/3rd

January 2012

• Shared accommodation rate applied to single people up to the age of 35

April 2012

• Contribution Based Employment Support Allowance – Limited to a maximum of 1 year

Key Changes

April 2013

• Bedroom tax (Social Sector Size Criteria)

• Local Council Tax Reduction Scheme

• Abolition of Crisis Loans & Community Care Grants

• Personal Independence Payments

• Benefit Cap

2014

• Universal Credit (delayed until July 2014 for Knowsley)

Key Changes

Budget – 8 July 2015

• £46.5bn in savings from the welfare budget over the

remainder of the parliament, with £12bn over the next

two years.

• The largest contributions to this total come from:

– increasing the rate at which benefits are withdrawn as

a person’s earnings increase (£20.5bn);

– freezing in cash terms the main DWP benefits from

April 2016 to March 2020 (£11.3bn); and

– cuts to specific tax credits aimed at families (£5.4bn).

Principle 1) Protect elderly, vulnerable

and disabled people.

• Protection for pensioners to continue

• Increase funding for domestic abuse

• No tax or means test for disability benefits

Principle 2) Those who can work will be

expected to look for work and take it when it is offered

April 2017

• New Youth Obligation for those aged 18-21

• Abolish automatic entitlement to Housing Benefit for

most 18-21 year olds.

• Parents with youngest child aged 3 will be expected to

look for work if they claim UC from September 2017

• Remove ESA Work Related Activity component for new

claimants only [£29.05pw].

Principle 3) Put whole working age

benefits system on to a more sustainable

footing (Reduce welfare bill by £9bn by

2019-20)

• A freeze on working age benefits for four years including Tax Credits

and Local Housing Allowance.

• Rents in Social Housing will be reduced by 1% a year for the next

four years.

• From April 2016

• Level of earnings at which Tax Credits and UC start to be

withdrawn will be reduced

• Tax credit taper rate for tax credit will increase

• From April 2017, Tax credits and UC work allowances will also be

reduced

Principle 4) Benefits system should not

support lifestyles and rents that are not

available to the taxpayer who pay for that

system

• Benefit cap to reduce from £26k to £20k

• Market Rents for high earners in Social Housing

• Support for Mortgage Interest Payments paid as a loan

• April 2016 - family premium withdrawn for new HB claims and backdating restricted to 4 weeks

• April 2017 - Support provided to families through universal credit and tax credits will be limited to 2 children.

Universal Credit

• Expected to commence October 2013 & migrated over 4 years –

actually started in July 2014 and now available to all working age

claimants making a new claim.

• No timescale for migration of existing claims/No indication that

pensioners will move to UC.

• Currently 477 claims where HB has ended due to a claim for UC

(191 were Private Tenancies)

• Total UC caseload for Knowsley 1,552 as at June 15 (75,427 in GB)

https://www.gov.uk/government/statistics/universal-credit-29-apr-

2013-to-2-july-2015

• More information -

https://www.gov.uk/government/publications/universal-credit-and-

rented-housing

How to Request a Managed Payment

Landlords can use the form available on GOV.UK – UC47 'Landlord request for a Managed Payment ‘-

Universal Credit: Rent arrears form to apply for a managed payment of the housing element and

recovery of arrears.

The information they will need to supply includes

Tenants name, address, and if known their date of birth and national insurance number

Current tenancy agreement including

Proof of the rent arrears which must include the amount of rent outstanding and the amount of rent due each calendar month

The landlord’s contact details – their name and address plus their bank/ building society account number and sort code for the payments.

Any reference number / transaction ID for that tenant

Once UC receives this information they will decide whether or not a managed payment is appropriate

and inform both the landlord and claimant.

The claimant will also be offered personal budgeting support.

Discretionary Housing Payments

Discretionary Housing Payments Policy – help towards rent

• Limited funding

• Expected to provide short term(?) support to claimants affected by Welfare Reforms including:

• Bedroom Tax

• Local Housing Allowance Changes

• Benefit Cap

• Universal Credit

• Current Budget £563,700 (down from £660,866 in 2014/15)

• £800m in DHP funding will be provided nationally over the next 5 years.

Further support for Residents

• Emergency food (Food bank)

• Credit union services – savings / loans / insurance

• Emergency Support & Council Tax Hardship Scheme

• Food / fuel vouchers

• Essential furniture / household items

• Free face to face debt advice

• Free telephone or online debt advice

• Money Advice / Benefit checks

• http://www.knowsley.gov.uk/residents/benefits-and-

grants/financial-advice.aspx

Questions

Contact Details

• Contact Details:

• Housing Benefit Section,

• Municipal Buildings, Kirkby.

• L32 1Tx

• Benefits@knowsley.gov.uk

• Contact Centre 0151 443 4042

• One Stop Shops: Huyton, Kirkby, Halewood & Prescot

• Pauline Wass, Revenues and Benefits Manager

• Email: pauline.wass@knowsley.gov.uk