Tagged: housing benefit

£19 per week benefits cut for working age claimants under Tories

Working age claimants are likely to face an average cut in income of over £19 a week if the Conservatives form the next government .

The drastic drop, likely to be taken from housing benefit (HB), employment and support allowance (ESA), disability living allowance (DLA) and personal independence payment (PIP), will be needed to allow the Tories to cut £12 billion from benefits spending.

Cuts timetable
The cuts will come in the years 2016-17 and 2017-18, after the current agreed spending round ends.

The chancellor’s plan is to have huge cuts in these two years, followed by much more modest cuts in 2018-19 and then a big surplus to pay for giveaways in the year leading up to the 2020 election.

bar chart showing planned cuts

Target benefits
The Tories are still refusing to say which benefits will be cut until after the election.

But the reality is that pensioner benefits, which make up well over half the benefits bill, are entirely protected.

And the proposed limiting of child benefit to the first three children would save just £300 million.

While cuts to housing benefit for some under 25s could save as little as £50 million.

So, the only place cuts can realistically come from is working age benefits. And Jobseeker’s allowance makes up only a tiny proportion of these, so rising employment will make little difference.

Jobseeker’s allowance is expected to cost just £2.39 billion in 2016-17, compared to:

  • Employment and support allowance: £14.47 billion
  • Disability living allowance: £10.11 billion
  • Housing benefit: £24.8 billion
  • Personal independence payment: 4.78 billion

The benefit that was supposed to transform the system and save billions, universal credit, doesn’t even make up one hundredth of a percent of the benefits bill and the DWP refuse to make predictions about future totals.

£2,000 per claimant
According to the Institute for Fiscal Studies, the cuts the chancellor has outlined so far, primarily a freeze on the uprating of most working age benefits, including the ESA personal allowance but not the two additional components, would save just £2 billion.

So that still leaves around £10 billion in cuts to be absorbed by the 5 million working age claimants in the UK. That’s a terrifying £2,000 per claimant over two years, averaging out at over £19 a week.

We have no way of knowing how the chancellor plans to make these cuts.

But it could be a combination of measures such as abolishing the work-related activity component of ESA; removing the lower rate of DLA care and/or mobility for working age claimants; making the points system for PIP much harsher; reducing the percentage of rent that housing benefit covers . . . and much more.

Tax credits
One possible way out of devastating cuts for sick and disabled claimants would be for the chancellor to pile a large part of the cuts on to tax credits. But there are major problems with this.

Firstly, ‘welfare’ has a precise meaning for a chancellor – particularly one delivering a budget – and tax credits are not part of the welfare budget at all, so Osborne would have clearly been misleading voters and the commons.

More importantly, the Tories have resolutely divided people into ‘strivers’ and ‘skivers’ over the past five years. ‘Skivers’ get ‘welfare’, ‘strivers’ go out to work and get tax credits if they are on a low income. The reality, of course, is very different, but this is the tale politicians and the press tell.

If it turns out that Osborne was pretending he was going to hit the ‘skivers’ with another round of cuts , but in reality planned to slash the incomes of millions of ‘strivers’ instead, his reputation will suffer enormous harm. So too will the idea that work always pays more than benefits.

The Tory party will quite possibly recover from the damage by the time of the next election, but George’s chances of becoming the next leader of the Conservatives in 2018 or 2019 will probably have been irreparably damaged.

It’s very unlikely to be a risk he wants to take.

“Radical changes” will be needed, says IFS
It’s not just Benefits and Work that is arguing that the chancellor will have to make radical cuts to disability benefits and housing benefit.

Paul Johnston of the IFS told the BBC, following the budget:

“He has told us he wants to freeze working age benefits. That will save up to about £2 billion. That’s something he has told us. It’s the other £10 billion we know nothing about.

“It’s of course possible to cut benefits by £10 billion or £12 billion, if that’s what you really want to do.

“But you need to recognise especially if you’re protecting pensioners which the conservatives have said they want to do, this will involve radical changes to, for example, the housing benefit system, big cuts to child benefit, big cuts to disability benefits.

“These are the big benefits. If you want to save £10 billion you have to find radical things to do to those big parts of the benefits system.”

Labour and Tories no different?
Our ‘Benefits sanctions and deaths survey’ found that 59.5% of respondents thought that the Conservatives would be harshest with claimants, but 40% believed Labour and the Conservatives are as bad as each other.

In truth, all the indications so far are that the Conservatives will be vastly worse for claimants.

Labour are only aiming to make a total of £7 billion in cuts over the course of the next parliament, compared with the Conservatives £30billion.

We are no fans of Labour here at Benefits and Work. We despise the way they have privatised chunks of the benefits system and helped to demonise claimants.

But, for the coming five years, we have absolutely no doubt which party will plunge millions of claimants into unbearable poverty and, like Tory minister Hugo Swire, find it all mildly amusing.

Source – Benefits & Work, 25 Mar 2015

http://www.benefitsandwork.co.uk/news/3052-19-per-week-benefits-cut-for-working-age-claimants-under-tories

Benefits cuts in the media

Perhaps not surprisingly, most of the media have paid little attention to the plan in this week’s budget to impose £12 billion of unspecified cuts on the benefits bill. The fact that it could be a matter of life or death to claimants is not something that most of the press are troubled by.

Below is a round-up of some of the more useful coverage, however. Please post a link in the comments section to anything else you have found that might help inform Benefits and Work readers.

The New Statesman is reporting that the planned freeze of working age benefits for two years would save just £3 billion of the £12 billion in cuts. Even if the freeze were to extend to the whole five years of the next parliament it would create only £6.9 billion in cuts.

They also point out that limiting child benefit to three children per family will save only £300 million.

As well as covering the Institute for Fiscal Studies demand for more details on benefits cuts, the Guardian points out that attempts to cut the benefits bill in the last five years have not always been successful. They argue that “A cut in tax credit entitlements has done little more than put a brake on their inexorable rise” and that housing benefit “is likely to rise in line with escalating rents”.

In addition, “pensioners are in line for an inflation-busting rise of 2.5% in the state pension next month” and, with inflation likely to stay low, they are likely to get “another above-inflation rise next year”.

While the cost of jobseeker’s allowance may fall if employment continues to rise “it accounts for only a tiny fraction of welfare spending” allowance.

There’s also an excellent Guardian graphic which shows what a huge hole Osborne’s cuts will blow in working age benefits.

Meanwhile the Independent finds that voters are unlikely to be told what cuts to benefits the tories are planning as “David Gauke, a Treasury minister, told the BBC the Tories would set out the details after the election”.

Source – Benefits & Work, 20 March 2015

http://www.benefitsandwork.co.uk/news/3047-benefits-cuts-in-the-media

“Big cuts to disability benefits” if conservatives win, warns IFS

The Institute for Fiscal Studies (IFS) is warning that cutting the benefits bill by £12 billion will lead to “radical changes” to housing benefits and “big cuts to disability benefits”, amongst others. They have challenged chancellor George Osborne to explain where the cuts will be made.

In an interview for the BBC today, Paul Johnston of the IFS pointed out that:

“The chancellor has been saying for nearly two years now that he wants to find £12 billion of welfare cuts by 2017.

“He’s told us maybe where he’ll find £2 billion of that £12 billion. If he really wants us to take seriously the idea that other spending will be protected, he needs to tell us something about where the additional £10 billion of welfare cuts will come from.

“They will not be easy to find.”

Johnston explained that a freeze on working age benefits, which would itself cause increasing hardship for working age claimants, would go nowhere near saving enough cash.

“He has told us he wants to freeze working age benefits. That will save up to about £2 billion. That’s something he has told us. It’s the other £10 billion we know nothing about.

“It’s of course possible to cut benefits by £10 billion or £12 billion, if that’s what you really want to do.

“But you need to recognise especially if you’re protecting pensioners which the conservatives have said they want to do, this will involve radical changes to, for example, the housing benefit system, big cuts to child benefit, big cuts to disability benefits.

“These are the big benefits. If you want to save £10 billion you have to find radical things to do to those big parts of the benefits system.”

For claimants, especially those who are sick and disabled, the result of the next election could well have a dramatic effect on the quality of their lives for decades to come.

You can see the full interview on the BBC website.

Source – Benefits & Work, 20 Mar 2015

http://www.benefitsandwork.co.uk/news/3046-big-cuts-to-disability-benefits-if-conservatives-win-warns-ifs

What horrors for claimants is Osborne hiding in his budget statement?

George Osborne has confirmed that there will be further massive cuts in the benefits budget, but refuses to say where they will fall, leaving working age claimants the likely target for the worst excesses.

In his budget speech yesterday Osborne confirmed there will be a further cut of £12bn in benefits spending, but gave no further details. Given that pensioners are largely protected, that leaves unemployed, sick and disabled claimants as the only realistic target for big savings.

This morning Osborne told the Today programme:

‘I’m proposing the same pace of cuts as over the last five years.”

He added:

“We’ve saved £21 billion in this Parliament and we need £12bn in the next. People can judge me by my track record”.

We know that there are plans to reduce the household benefit cap further and to stop housing benefit for some under 25 year olds. But these measures will be nowhere near enough to meet the proposed level of savings.

This is especially so when you consider that, with out-of-control rents, the housing benefit bill is set to continue to expand.

It certainly is possible to judge Osborne and his fellow ministers by their track record.

Over the last five years we have seen the introduction of the bedroom tax, the replacement of DLA with PIP, the time limiting of ESA, massive increases in sanctions and the destruction of the social fund, to name but a few.

None of these measures were in the Conservative party manifesto. And none of them, it seems, have come close to being harsh enough in Osborne’s view.

Where is there left now to make cuts in the benefits budgets? Where do you think the axe will fall?

Source – Benefits & Work,  19 Mar 2015

http://www.benefitsandwork.co.uk/news/3043-what-horrors-for-claimants-is-osborne-hiding-in-his-budget-statement

Half a million more people claiming housing benefit under coalition

Order Of Truth

hbenAs we have reported many times, the claims of the government that their so-called ‘austerity measures’ are saving money for the taxpayer are nothing more than lies. Simple.

In particular, their claim of saving money through housing benefit reforms are ridiculous and defy simple logic. Looking at the ramifications of their ill-thought-out policy shows that the housing benefit bill has risen considerably as a direct result of their incompetence and social engineering policies.

The following report is from The Guardian.

Britain’s failure to build affordable homes has led to a soaring housing-benefit bill – with half a million more people now relying on state hand-outs to pay their rent than when the coalition came to power, a damning new analysis reveals.

The coalition’s crackdown on welfare has failed to prevent an explosion in the number of people relying on state help in recent years, with a total of five…

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Only 31,030 People Claiming Universal Credit, Figures Show

The Department for Work and Pensions (DWP) has discretely released dismal Universal Credit statistics on the same day as the latest unemployment figures are announced.

The figures reveal that there were just 31,030 people on Universal Credit by 8th January 2015.

This represents an increase of 17 per cent on the caseload compared to December 2014, but is still far short of the 1million (plus) originally promised by the Work and Pensions Secretary, Iain Duncan Smith MP.

The Jobcentre Plus office with the largest caseload was Oldham with 2,640 Universal Credit claimants, followed by Wigan with 1,930.

Of the people on the caseload in January 2015, 32 per cent were in employment and 68 per cent were not in employment.

47 per cent of the Universal Credit caseload in January 2015 has been on the new benefit for less than three months, this compares to 52 per cent in December 2014, 55 per cent in November 2014 and 60 per cent in October 2014.

There are more males on the Universal Credit caseload than females (70 per cent compared to 30 per cent).

Males aged 20-24 make up 24 per cent of the total Universal Credit caseload.

Universal Credit is replacing the following benefits:

  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Working Tax Credit
  • Child Tax Credit
  • Housing Benefit

Main Findings

63,690 people have made a claim for Universal Credit up to 12th February 2015. The rate at which people are claiming continues to increase as the roll out of Universal Credit continues.

35,620 of the people who have made a claim have, up to 8th January 2015, attended an initial interview, accepted their claimant commitment, and gone on to start Universal Credit.

31,030 people were on the Universal Credit caseload, as at 8th January 2015. Of these, 10,080 (or 32 per cent) were in employment and 20,950 (or 68 per cent) were not in employment.

Source: Department for Work and Pensions (DWP).


UK Labour Market, February 2015

  • Comparing the estimates for October to December 2014 with those for July to September 2014, employment continued to rise and unemployment continued to fall. These changes maintain the general direction of movement since late 2011/early 2012.
  • There were 30.90 million people in work. This was 103,000 more than for July to September 2014 and 608,000 more than for a year earlier.
  • The proportion of people aged from 16 to 64 in work (the employment rate), was 73.2%, higher than for July to September 2014 (73.0%) and for a year earlier (72.0%). The employment rate last reached 73.2% in December 2004 to February 2005 and, since comparable records began in 1971, it has never been higher.
  • There were 1.86 million unemployed people. This was 97,000 fewer than for July to September 2014 and 486,000 fewer than for a year earlier.
  • The unemployment rate was 5.7%, lower than for July to September 2014 (6.0%) and lower than for a year earlier (7.2%). The unemployment rate is the proportion of the economically active population (those in work plus those seeking and available to work) who were unemployed.
  • There were 9.05 million people aged from 16 to 64 who were out of work and not seeking or available to work (known as economically inactive). This was 22,000 more than for July to September 2014 and 6,000 more than for a year earlier.
  • The proportion of people aged from 16 to 64 who were economically inactive (the inactivity rate) was 22.3%, virtually unchanged compared with July to September 2014 and with a year earlier.
  • Comparing October to December 2014 with a year earlier, pay for employees in Great Britain increased by 2.1% including bonuses and by 1.7% excluding bonuses.

Source: Office for National Statistics (ONS)

Source –  Welfare Weekly,  18 Feb 2015

http://www.welfareweekly.com/only-31030-people-claiming-universal-credit-figures-show/

Confusion over universal credit

Job Centres in the region are among the first in the country to take part in the national roll out of the Government’s new Universal Credit, which began today (Monday, February 16).

Universal Credit, designed to get people into work more quickly and making it easier for them to earn more, has started in 15 areas, including Hambleton, Ryedale, Hartlepool and York.

Initially the credit, which merges six working-age benefits into one, is being rolled out only for new claims from single people who would otherwise have been eligible for jobseekers allowance, including those with existing housing benefit and working tax credit claims.

At Northallerton Job Centre today there was confusion over how it will work. One single parent, who gave her name as Julie, said she had been told nothing about it.

It could possibly be a good idea, rather than having separate benefits and dealing with different departments,” she said.

“But I have been told nothing about this, and how it will work. I want to get back to work and I am studying at the moment so if it helps me to get back to work that’s good. But information would be a big help too.”

Another 19-year-old man who is currently claiming jobseekers allowance said he was also in the dark.

 “If it is only for new claims that’s probably why,” he said. “But if it’s supposed to be coming in for everyone, no one has mentioned it to me and I haven’t heard anyone talking about it in the Job Centre.”

A pilot scheme has been tried out in the North-West, which the Government said had been a success

Work and Pensions Secretary Iain Duncan Smith said:

“The evidence shows that under Universal Credit, people move into work more quickly and earn more money, giving them increased financial security.

“It is very impressive that we have seen these results so soon and that this is having a real impact on people’s lives. This is a cultural change which will alter the landscape of work for a generation.”

But Labour’s shadow work and pensions secretary Rachel Reeves said no one believed the promises that the new system would work.

 “It will also take over 1,571 years to roll out universal credit to everyone at the current rate,” she said.

“Labour wants universal credit to work and we’ll call in the National Audit Office to do an immediate review of this failing programme to get a grip of the spiralling waste and delays.”

Source – Northern Echo, 16 Feb 2015

Universal credit ‘a nightmare’, says claimant who advertised welfare reform

A Universal Credit claimant who featured in a government film to promote the reform now says the system is riddled with computer problems and could make people destitute.

In the Department for Work and Pensions (DWP) advert, Daniel Pacey explains how the reform helped him to find work.

But he now says a six-week delay before the first payment and subsequent monthly payments are “a nightmare“.

The DWP said monthly sums replicate the world of work and tackle dependency.

A spokesman said:

“Universal credit is simplifying the benefit system and [makes] the transition into employment smoother.

“Our work coaches discuss budgeting support with all claimants and nearly 80% say they are confident in their ability to manage a monthly budget.”

> Is that 80% of work coaches or claimants ?

Mr Pacey, 24, from Wigan, Greater Manchester, said:

”It might be easy for a government minister to make their wages last a month. But I’d like to see them make £250 last four weeks while looking for work.”

The government has announced that a national roll-out of universal credit is starting in earnest across the country. The aim is for it to be offered in all job centres in England, Scotland and Wales by 2016.

> Whether it works or not, presumably.

Work and Pensions Secretary Iain Duncan Smith told BBC News the new benefit was £600m under budget and had been implemented gradually on advice.

But Mr Pacey, who lives with his father, said his job centre struggled with failing computer systems, adding:

“I hate to think about how I would have coped had I lived on my own. I know I couldn’t have.”

The DWP spokesman added:

“People can apply for advanced benefit payments if they need extra support and we are working with local authorities to make sure people get budgeting and debt advice.

“The IT system adapts smoothly to claims as they become more complex, which we have already seen across the North West.

“Computer problems in offices are separate issues and are resolved quickly but these do not impact the operating system, or have an impact on claims.”

The scheme was initially piloted in Ashton-Under-Lyne nearly two years ago.

Under the old system, payments were bi-weekly, with housing benefit paid directly to landlords.

Under universal credit, claimants are instead paid monthly and are expected to pay their rent themselves.

Housing Associations in Ashton-Under-Lyne say rent arrears and debt are on the rise amongst universal-credit claimants.

The chief executive of the National Housing Federation, David Orr said:

“This scheme isn’t even ready to fully roll out in Ashton-Under-Lyne, where it’s been piloted for two years, let alone the rest of the country.”

The DWP spokesman said:

“In some cases, we can arrange for alternative payment arrangements, including rent being paid direct to landlords.”

The government says it is important for people to learn how to handle their own monthly budgets, as this replicates the world of work.

> Oh for fucks sake – how stupid do they think we are ?  Do they think every unemployed person has never worked ?  Do they think anyone having to survive on benefits doesn’t already know all about handling budgets ?

But Mr Pacey’s new job in a call centre pays bi-weekly.

He said: “In my experience, most low-paid jobs pay weekly or every other week, not monthly. You can’t make small sums of money last a month.

“It’s not about dependency, it’s about living, being able to get a bus to go to the job centre. The government needs to rethink this.”

 

The scheme has also been criticised by the National Audit Office as badly managed and failing to deliver on its targets.

It is concerned that a roll-out from pilot areas in north-west England is taking place with fewer resources to spend on staff training and less time for staff to get accustomed to the changes.

About 50,000 people in selected areas have claimed the benefit since it was introduced in April 2013 – far fewer than the government originally said would be getting it by now.

Computer problems have also caused delays and seen ministers write off tens of millions of pounds.

Source –  BBC News,  16 Feb 2015

Government Targets Working Benefit Claimants

Part-time workers claiming Universal Credit face punitive in-work benefit sanctions, it has been reported today.

Universal Credit claimants in part-time employment could see their Housing Benefit slashed, if they fail to increase their working hours to 35 hours per week on the minimum wage, reports Inside Housing.

The trial, quietly introduced through secondary legislation, will affect around 15,000 new Universal credit claimants earning less than £12,000 a year.

Sanctions currently only affect unemployed people in receipt of Jobseeker’s Allowance (JSA) or Employment and Support Allowance (ESA).

If the trial is rolled out across the country, thousands of hard-working people could see their in-work benefits docked for the very first time.

> From one point of view this could be a good thing – because it will bring home to people who previously didn’t give a damn about, or even supported, benefit sanctions for the unemployed, just what is going on.

Universal Credit merges a number of existing benefits into one single monthly payment. This includes Housing Benefit, Working Tax Credit, Child Tax Credit, Income Support, JSA and ESA.

However, the Government’s flagship project has been beset by delays and problems with its IT systems. Official figures show 26,940 people were claiming Universal Credit by 11 December 2014.

The DWP is speeding up the roll-out of Universal Credit across Britain, in an apparent bid to prevent Labour from calling a halt to its introduction if they win the next general election.

> Labour could – and should – still scrap it if they win… but will they ?

Under the new mandatory pilot, which launches in April 2015, in-work Universal Credit claimants face the prospect of weekly sanctions – starting at around £29 per person.

Those affected by the trial will be offered ‘support’ from Jobcentre Plus to increase their pay and working hours. Failure to comply could result in sanctions.

> So just how do you increase your hours (unless you’re the boss) ? And its not much incentive to take a job like that if you know you’ll still be at the mercy of Jobcentre work coaches.

Source –  Welfare Weekly,  11 Feb 2015

http://www.welfareweekly.com/government-targets-hard-working-benefit-claimants/

Conservative Health Chair Criticises David Cameron’s Welfare Cuts Plans

David Cameron’s plans to target benefit cuts at the young and vulnerable have come under fire from within his own party.

Sarah Wollaston, the Conservative chair of the health committee, said she did not support scrapping housing benefit for 18-to-21-year-olds, after the prime minister toured the television studios detailing some of the Tories’ proposals to cut another £12bn from the welfare budget.

In a series of interviews, Cameron repeated his pledge to lower the welfare cap from £26,000 to £23,000 per family alongside proposals to stop housing benefit for school-leavers. The cap was about a “basic issue of fairness”, he said.

“I don’t think a family should be able to get more in benefits than someone going out to work, working every day, and trying to do the right thing for them and their family,” he said.

> If anyone ever does get more in benefits than someone working (which I doubt) , perhaps it’d be because the wages they are earning are so poor, or they’re only working 16 hours a week.

But in any case, you can only play the hand you’ve got, so if it did happen that you’d get more on benefits than by working…why not ? Cameron & Co  probably dodge paying more  tax in a year than you’d claim.

“One of the criticisms of the cap set at £26,000, which I have heard all over the country, is that the cap was set too high. We’re responding to that.

“We’re generating these jobs. People listening to this programme don’t pay their taxes to sustain people on welfare who could work.”

> Well actually, yes they do – National Insurance, at least. When working I’ve never grudged paying NI (much) because I paid it in the belief that I could claim some of it back should I become unemployed, and also – and this is an important point –  that it should go towards helping others unemployed even if I wasn’t.

He said the country was no longer willing to tolerate people living on welfare as “a lifestyle choice” and claimed Conservative plans would help “young people move into work more quickly”.

> A lifestyle choice ?  And I thought it was a survival choice….the choice being survive or die.

However, his proposals on scrapping housing benefit for young people came under fire from Wollaston and a number of charities.

Wollaston, the Conservative MP for Totnes, told the BBC’s Daily Politics:

“That is a policy that I don’t actually support. The point is that there is a debate going forward, I would not support personally taking housing benefit from the most vulnerable. I would not personally support taking away housing benefit from the very young. I think because there is an issue here we need to discuss about intergenerational fairness … There are many policies within parties that we have a debate about.”

Tory peer Baroness Wheatcroft later added that the Conservatives need to “get the tone right” to make sure they sound sympathetic towards those who cannot work.

“I firmly believe there is only one nasty party and it’s a very nasty party called Ukip. What the Conservative party needs to do is to be careful that it does not appear to be in the least nasty, but kind and caring and wants people to work because it is the best possible solution to them as well as the country,” she told the World at One.

> HA HA HA HA HA ! Maybe you’d appear kind and caring if you were kind and caring. No-one who has been fucked over by the Tories is going to forget it.

The warnings came the day after academics from the LSE, Manchester and York published a new study showing the coalition’s cuts are disproportionately hitting families with young children.

Among the charities to issue warnings about the proposed benefit cap were the Child Poverty Action Group. Its chief executive, Alison Garnham, said:

“Let’s be absolutely clear – the benefit cap is at least nine times more likely to affect children than adults, and the majority of adults it hits are lone parents, many of whom have children so young even the government recognises they should not be required to work.

> The parent or the children ?  I only ask because the government making small children work just seems so likely…

“On the day that a major programme of research by academics from leading universities shows families with young children have been more impoverished than anyone else in recent years, we have another policy-push that would undercut the most vulnerable.”

Paul Noblet, head of public affairs at youth homelessness charity Centrepoint, weighed in on the issue of housing benefit, saying it would cause further misery for vulnerable young people.

“The 80,000 young people who find themselves homeless will think David Cameron is more focused on May’s elections than the reality that, for the most vulnerable young people in our society, housing benefit is a lifeline, not a lifestyle choice,” he said.

Source –  The Guardian,  27 Jan 2015