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


Welfare & public expenditure


• 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


Before the crash…how government spent


HB

Tax Credits

HB

ESA

JSA

IS

PC

Universal Credit

PensionCredit

Welfare benefits: old & new


Welfare reform impacts


• 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


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


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


Household benefit cap: impact on 3 child families in London and the south east.

Benefit cap in the South East


• 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


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


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


The Guardian 2 January 2012


Universal Credit


• 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


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


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


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)


• 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


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?


Any lessons learned


• 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


The Guardian 2 January 2012

Documents

Welfare Reform Impacts