Welfare Reform

Welfare Reform means changes to the benefits system. Many of the current benefits will be replaced with a new benefits and payment system.

What’s happened so far?

Social sector size criteria – or as we know it Bedroom tax. This was introduced in April 2013 and affects tenants of social landlords by reducing housing benefit for any spare rooms a tenant has. The rates of reduction are 14% for one spare bedroom and 25% for two or more. A similar change was seen by private sector tenants in that they get benefit based on local rates and the house size they need. From January 2012 anyone under 35 renting from a private landlord is given benefit at the rate of a single room in shared accommodation.

Council Tax Benefit was replaced by localised Council Tax Reduction schemes. Each council will run their own scheme. In England, pensioners are protected, but most other people who used to get full help are likely to have to pay something towards their council tax bill. In the Redcar and Cleveland area this is a 20% contribution.

Some of the social fund was stopped. Budgeting loans are still available from the DWP (if you fit the criteria) but community care grants and crisis loans now sit with the local authority and are called the Discretionary Social Fund. You now need to apply to Redcar and Cleveland Council if you are without enough money to meet your needs or for white goods if you qualify. The white goods element is by way of a loan.

Teesside was in the pilot area for the roll out of Personal Independence Payment or PIP which will eventually replace DLA. This started out in April 2013 and applied to new claims only but in October 2015 those still on DLA will be written to and invited to make a claim for PIP instead. Although called an invite it really is a warning that you need to claim PIP instead.

Mandatory reconsiderations came in which is the new name for how to ask for a benefits appeal. This applies to all benefits except housing benefit. The most controversial change with this is that if a claimant needs to appeal their ESA decision (employment and support allowance) they must claim Jobseekers Allowance until the mandatory reconsideration has been carried out.

Benefit cap – as the name suggests this is a cap on the amount of benefit a single person or family can receive. It includes all benefits (except council tax support) and if your income exceeds £350 if you are single or £500 if you are in a couple or have children then the benefit is capped to that amount. The way is works is that any excess income is taken off your housing benefit but you will always be left with 50p in housing benefit. If you are in the support group of ESA or any of your family has DLA/PIP then you will not be affected by this cap. The same applies to if you receive working tax credits. Watch out for this cap getting even lower in the next few months.

And finally Universal Credit – this is the means tested benefit that will replace tax credits, housing benefit, income support and income based JSA and ESA. This benefit is expected to be brought into the Redcar and Cleveland area in spring 2016 – or anytime between December and March. The aim of this change to all benefits is to encourage those who can work into work and support those who cannot work. The benefit will be claimed online, a bank account is needed to have this benefit as the housing costs will be paid direct to the claimant so an account that accepts direct debits is required. The benefit will be paid monthly too so it is crucial that claimants have budgeting skills. One of the features of this benefit that we have already had introduced in the area id the “claimant commitment” and this is the agreement you will enter about work-related requirements you’ll have to meet before you can get your benefit.

If you’re already working, you’ll have to agree to look for a job with more pay or more hours to increase your income.

If you have a partner, the new requirements will apply to them too and you'll both have to sign a claimant commitment.