The Welfare Reform Act 2012 introduces the most fundamental reforms to the social security system for 60 years. Aims for a simpler, fairer benefits system and to ensure work pays.
There are a number of major changes starting from April 2013 as follows:
- Housing Benefit (Social Housing bedroom restriction)
- Social Fund (formerly Community Care Grants and Crisis Loans)
- Overall Benefit Cap
- Localised Support for Council Tax (abolition of Council Tax Benefit)
- Universal Credit
- Personal Independence Payments (replacing Disability Living Allowance)
Housing Benefit - size criteria for social sector (bedroom tax)
The Government has introduced new rules that set out the number of bedrooms Housing Benefit will pay for, if you are renting from a local authority, a registered housing association or other registered social landlord.
The new rules restrict the size of accommodation you can receive Housing Benefit for based on the number of people in your household.
The rules allow one bedroom for:
- every adult couple (married or unmarried)
- any other adult aged 16 or over
- any two children of the same sex aged under 16
- any two children aged under 10
- any other child, (other than a foster child or child whose main home is elsewhere)
- a carer (or team of carers) who do not live with you but provide you or your partner with overnight care
Under-occupying working age households living in Social Housing (Local Authority or Registered Social Landlord) have their Housing Benefit restricted by 2 different percentage rates based on the level of under occupation - 14% Housing Benefit loss for 1 spare bedroom or 25% for 2 or more. This change applies to both new and existing working age tenants from April 2013.
Local Welfare Assistance (Social Fund)
North Yorkshire County Council administers a Local Welfare Assistance scheme from April 2013 as Community Care Grants and Crisis Loans were abolished and responsibility delegated to upper tier Local Authorities. Customers who are interested in finding out more should be signposted to the County Council’s Customer Contact Centre on (01609) 534527.
Crisis Loan alignment payments will be replaced with a new national payment on account scheme run by The Department for Work and Pensions who will also continue to deal with funeral payments Bereavement Service helpline: 0345 606 0265. Budgeting loans (You normally have to repay the loan within 104 weeks) are available if you’ve been getting income-related benefits for at least 26 weeks. You will need to complete a claim form ‘SF500’ and return this to your local Jobcentreplus office.
Overall Benefit Cap
The Benefit Cap is a limit on the total out of work benefits that a family unit can receive with the aim being to ensure that workless households will no longer receive more in benefits than average working families (combined income after tax and National Insurance)
A cap on the amount of benefit a household may receive so that these are in line with average weekly earnings (£500 per week for couples and lone parent households and £350 per week for single households).
The Benefits Cap will not apply where someone is entitled to:
- Attendance Allowance
- Disability Living Allowance and its replacement Personal Independence Payment (PIP)
- Employment and Support Allowance where the Support Component has been awarded.
- Industrial Injuries Disablement Benefit
- War Widow’s/ Widower’s Pension
- Working Tax Credit
There will be a grace period of 39 weeks when the cap will not apply for people who have been in work for 52 weeks or more (and have lost their job through no fault of their own) before they claim benefit.
Any excess amount over cap will be deducted from Housing Benefit.
Local Support for Council Tax
As part of Welfare Reform, Council Tax Benefit was abolished from 1 April 2013 and replaced with local schemes.
Each local billing authority has to design and implement its own Local Support for Council Tax (LSCT) scheme which will mean reduced financial assistance for working age people towards paying their Council Tax bills from April 2013. Pensioners are fully protected at the same levels of support as they received under Council Tax Benefit.
New LSCT claims and change of address/circumstances will continue to be made using Scarborough Borough Council claim forms, available online or at any Customer First office.
Universal Credit will provide a new single system of means-tested support for working-age people in and out of work.
Existing means-tested benefits that will no longer be paid include income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit and Housing Benefit.
For those in work, financial support will be withdrawn at a single transparent rate as earnings increase to ensure that work always pays and is seen to pay.
Claims for Universal Credit are expected to be made online with payment of Universal Credit direct to the household.
Scarborough and Whitby Jobcentres started to deliver Universal Credit from 9 November 2015.
Personal Independence Payments
Personal Independence Payment (PIP) will be introduced for all new claims. The non means tested payment helps with extra costs incurred, and a new independent assessment will ensure support is targeted at those who need it.
Awards of Personal Independence Payment will be based upon the circumstances of the individual and will look at the impact of their disability or health condition on the ability to live independently and participate in society.
Over time, more than 2 million existing Disability Living Allowance claimants will be contacted to check their eligibility for the new Personal Independence Payment (PIP). It will take until 2016 to complete the reassessment process. The new fairer independent assessment will be delivered by a contracted provider and will help ensure financial support is better targeted. There will be a full roll-out of managed reassessment claims.
Reassessment activity to invite claims to PIP will end by March 2016 with some claims not completing the full reassessment activity until later in 2016.
What can I do about this?
If you think that you may be affected by any of these changes then there are a number of places you can go to locally for advice and assistance:
Scarborough Borough Council
For advice on housing benefit and local support for council tax contact Customer First by emailing firstname.lastname@example.org or calling 01723 232372. Alternatively you can see an advisor face to face by visiting the Customer First centres on St Nicholas Street, Scarborough or Bobbies Bank, Whitby (Jobcentreplus office)
Your own landlord
If you are a tenant of a housing association, such as Yorkshire Coast Homes or Sanctuary Housing then you will be able to contact them for advice. If you are affected by the Spare Room Subsidy (Bedroom Tax) then it is important that you contact your landlord especially if you think that you are going to struggle to pay any extra rent. They can advise on payment options and possibly look at moving you to a smaller property where you might not be affected by the charge.
Yorkshire Coast Homes also employs money management officers who can provide lots of advice on money management, budgeting and debt advice and help you to manage your money more effectively.
- Yorkshire Coast Homes tenants should call 0345 065 56 56 or go on to their website.
- Sanctuary Housing tenants should call 0800 131 3348 or go on to their website.
- Citizens Advice Bureau has specialist debt and benefit advisors, who can assist with ensuring people get the correct benefit entitlement or can advise on what to do if you get into debt.
- Citizens Advice Bureau, Based at Elder Street in Scarborough who can be contacted on 01723 368710
- Citizens Advice Bureau in Whitby is based at Church House on Flowergate and can be contacted on 0344 411 1444
- South Yorkshire Credit Union Based at the Customer First centre on St Nicholas Street, Scarborough and is open from 9.30 am to 4.00 pm, Mon day to Friday. They can be contacted on 01723 377140. South Yorkshire Credit Union provides a range of low cost financial services including a current account, savings and affordable loans.
- Government website: The Department for Work and Pensions (DWP) has a specific webpage on welfare reform: This includes information on all the major welfare reform changes.
- Money Advice Service: The Money Advice Service provides free, independent advice on a range of money matters including money management and debt advice.
Other advice agencies
There are a wide range of advice agencies operating throughout Scarborough, Whitby and the rest of the borough. These include Rainbow Money, based at the Rainbow Centre in Scarborough (contact 0808 1789362), which provides debt and money advice.