27 December 2010

The Timetable for Benefit Cuts (if we don’t stop them)

This is a blog which unashamedly purloins useful information from others! However credit where credit is due and in this case to Mick Hall’s Outrage site. Mick is one of the few socialists left in the Labour Party.

Tony Greenstein

Posted: 05 Nov 2010 12:10 AM PDT

Below are details of the various cuts and changes to the benefits system which are most likely to affect claimants and which the coalition intends to introduce – or has introduced - between October 2010 and 2014

Incapacity benefit. Pilot trial of transfer of IB claimants to ESA begins in Burnley and Aberdeen areas involving1,700 claimants.

Effect: the DWP estimate that 23% of IB claimants will fail the work capability assessment and will not be eligible for ESA. More information on the pilots from this link

Mortgage interest payments. Rate of mortgage interest support reduced from 6.08% to Bank of England average, currently 3.67%.

Effect: many claimants of income support, jobseekers allowance, employment and support allowance and pension credit now face a shortfall in their mortgage interest payments, meaning they must either meet the difference out of their benefits or face losing their home.

VAT. Not a benefit at all, but on 4 January 2011, the standard rate of VAT will rise to 20%.

Effect: the cost of many staple items will increase, affecting people on low incomes disproportionately and meaning benefits do not stretch as far.

MARCH 2011
Employment and support allowance. A new harsher work capability assessment is to be introduced.

Effect: the DWP estimate that the number of people being found fit for work will increase by 5% and the number being placed in the support group will increase by 0.5%.

Incapacity benefit. Transfer of IB claimants to ESA begins. Due for completion in March 2014.

Effect: the DWP estimate that 23% of incapacity benefit claimants will fail the work capability assessment and will not be eligible for ESA.

APRIL 2011
Disability living allowance
Higher rate mobility component will be payable to people with a severe visual impairment.

Effect: The DWP say that it will allow around 22,000 blind people to claim higher rate mobility.

Local housing allowance. Maximum weekly allowance payable limited to:

£250 for a 1 bed property
£290 for a 2 bed property
£340 for a 3 bed property
£400 for a 4 bed property

Maximum property size limited to four bedrooms instead of five.

Effect: many private sector tenants, especially in London, are likely to face a shortfall between the amount of their benefit and the rent they have to pay. Claimants with large families are also likely to suffer.

Various benefits: benefits such as disability living allowance that have until now been uprated based on increases in the retail price index will be uprated in line with the less generous consumer price index.

Effect: benefits will increase by less each year and claimants incomes will fall further and further behind those of the rest of the population.

Local housing allowance. Rents will be based on the cheapest 30% of properties in an area, rather than the cheapest 50%.

Effect: many private sector tenants are likely to face a shortfall between the amount of their benefit and the rent they have to pay.

APRIL 2012
Employment and support allowance. Contribution-based ESA will be time-limited to one year. The start date for this is not yet clear. But it appears that legislation may be enacted in 2012 with immediate effect on those who have been in receipt of contribution-based ESA for 12 months or more.

Effect: people in receipt of contribution-based ESA who have savings or a partner who works may no longer be able to receive ESA or JSA.

Local housing allowance. The shared room rate will apply to single people aged under 35 years old, rather than 25 years old. Under this rule claimants cannot get more than the rate for a room in a shared house rather than the rate for a one bed flat.

Effect. Private rented tenants under 35 years old will be more likely to face a shortfall between the amount of their benefit and the rent they have to pay.

Disability living allowance. DLA mobility component will no longer be payable to people in residential care.

Effect: Around 58,000 people in residential care will lose the mobility component and have their lives made considerably poorer as a result

APRIL 2013
Housing benefit. This will be limited to the size of property a claimant’s household requires.

Effect: Social housing tenants who are judged to have too many rooms, perhaps because their partner has died or left or their children have left home, will have their housing benefit reduced or they will have to move to a smaller property. There is likely to be a shortage of such smaller properties in the social housing sector.

Jobseekers Allowance. Claimants who receive JSA for more than 12 months will have their housing benefit or local housing allowance reduced by 10%.

Effect: Many claimants in high unemployment areas or who have physical or mental health conditions which mean they are discriminated against in the jobs market will have to meet the shortfall in their rent payments out of their benefits. Some will undoubtedly become homeless.

Combined with the harsher ESA medical this will mean that, for example, deaf claimants who can read 16 point type will be forced onto JSA and then have their HB or LHA cut by 10% because they are so heavily discriminated against by employers and thus less likely to find employment. In effect it will be a punishment for being disabled.

Benefit cap: The maximum amount a household can receive in benefits will be limited to the average take-home pay for working households, estimated to be £500 a week in 2013. The cap will apply to combined income from:

The main income replacement benefits (Jobseeker’s Allowance, Income Support, Employment Support Allowance);
Other means-tested benefits (including Housing Benefit and Council Tax Benefit);
Child Benefit and Child Tax Credit;
Other benefits (including Carer’s Allowance and Industrial Injuries Disablement Benefit.

The cap will not apply to claimants of DLA, working tax credit or war widows benefit.

Effect: this is most likely to affect larger households with high housing costs.

SOMETIME IN 2013-2014
Disability living allowance. New medical and changed eligibility rules for DLA for claimants of working age. All existing claimants will be reassessed using the new system.

Effect: the intention is to reduce the number of DLA claimants by at least one fifth.

Various working age benefits. Universal credit will replace:

Employment and support allowance
Jobseekers allowance
Income support
Housing benefit
Council tax benefit
Working tax credit
Child tax credit

Initially this will only apply to the long-term unemployed, but the intention is to move all claimants of the above benefits onto universal credit over the course of two parliaments.

Effect: there are not yet enough details to know who might be better off and who will be worse off under the new system.

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