Platform 51

Welfare Reform Act 2012

On 8 March the Welfare Reform Act 2012 received Royal Assent.

The Act introduces a wide range of reforms which the Government states are to make the benefits and tax credits system fairer and simpler by:

• creating the right incentives to get more people into work by ensuring work always pays

• protecting the most vulnerable in our society

• delivering fairness to those claiming benefit and to the tax payer.

Welfare Reform Act 2012

Stated main elements:

• Universal Credit

• Reducing fraud and error

• New claimant commitment

• The Personal Independence Payment

• A fairer approach to Housing Benefit

• Reform of the Social Fund

• Reforming Employment and Support Allowance

• Changes to support a new system of child support

Universal Credit

Universal credit will replace means-tested benefits and tax credits for working-age people up to pension credit age. It will be paid to people in or out of work.

• Simplify the benefits system

• Mimic work and receipt of salary

• A single system of disregards and one taper

• Improve work incentives

Universal Credit

How will UC be calculated

It will be made up of:

• Personal amounts for a single claimant or couple

• Additional amounts for:

• children or qualifying young person (additional for disabled children)

• rent/mortgage

• Limited capability to work

• Limited capability for work-related activity

• Regular caring responsibilities for a severely disabled person

• The maximum award will be subject to the ‘benefit cap’

Universal Credit other points

• Transitional protection

• Applications will normally be made on-line

• Couples will make a joint claim

• Claimant commitment - more conditionality and tougher sanctions. Claimants will be placed in one of four groups:

1. Claimants subject to no work-related requirements

2. Claimants subject to the work-focused interview requirement only

3. Claimants subject to the work preparation requirement

4. Claimants subject to all work-related requirements

Platform 51’s concerns

• Platform 51 supports girls and women across England & Wales.

• Women rely more on benefits and tax credits

• Women will be affected by all the changes from the Welfare Reform Act but specific areas include:

• Payment of Universal Credit

• Childcare funding

• Social Fund changes

• 2nd earner disincentive

Payment of Universal Credit

Couples will make joint claims for Universal Credit and it will be paid into one account.

We are concerned about the impact of this on commitments to end child poverty and promote gender equality

This payment method:

• Assumes that all couples live in equal relationships

• Does not recognise the most effective way of ensuring that money allocated for children reaches them through paying it to the main carer.

• Fails to include any analysis on the impact of the proposal on women experiencing domestic abuse, including financial abuse.

• Does not guarantee that both partners in joint claims have direct access to some part of Universal Credit

Childcare Funding

From 2013 money will be available for childcare to cover part time and mini-jobs

• This will help many single parents to get back into work in a way that fits around school or nursery hours.

• The initial proposal kept total spending on childcare the same

• Successful lobbying meant this increased by £300 million

 

Social Fund changes

The Discretionary Social Fund is being abolished and it is to be replaced with local provision

• The current Social Fund is a statutory fund - the replacement will not be ring-fenced

• We are concerned about support for women and children fleeing domestic violence

• Lack of financial support may impact on women returning to violent partners or deciding to leave them

• Lack of financial support is likely to delay women’s move from refuge accommodation into their own homes with their children or risk material deprivation and poverty

Other important points

• 2nd Earner Disincentive

• Benefit Cap & Housing Benefit

• Employment Support Allowance

• Lone Parents

Conclusion & Next Steps

Timescale for UC

• It will be introduced in October 2013 for all new claims of out-of-work support

• People moving from out-of-work benefits will transfer onto UC between October 2013 to April 2014

• From April 2014 there will be no new claims for tax credits and existing claimants will transfer to UC