Benefits reform: what is in store?

THE benefits system is undergoing the most radical shake-up in living memory over the next four years as the UK Government seeks to reduce the welfare budget by £28billion.

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Benefits reform: what is in store?
Benefits reform: what is in store?

The Government says it will help cut fraud and bureaucracy and make work pay.

However, opponents are concerned it will put millions who rely on benefits, many of whom work in low-paid jobs, into poverty.

In a new series the Evening Times is looking at the changes, their possible impact, and what is being done to mitigate that impact.

Today we look at the different types of benefits and what will change.

In later articles we will highlight changes to individual benefits and outline where people can go for further information and advice.

The Department for Work and Pensions says the introduction of Universal Credit will simplify the benefits system by bringing together a range of working-age benefits into one streamlined payment.

It says the changes will be cheaper to administer, improve the incentives to work and reduce fraud.

The one-off payment is due to be in place this October and will replace several different individual benefits an tax credits.

The transfer will be phased between this October and December 2017, replacing separate payments for Jobseeker's Allowance, Employment Support Allowance, Housing Benefit, Working Tax Credit and Child Tax Credit.

Money will be paid monthly in arrears to one member of a household, into a bank, building society or Post Office account.

The Government says almost three million families in the UK will see their benefit entitlement reduced as a result.

Child Benefit

Changes have already started and will see many families lose Child Benefit altogether, with others getting a reduced monthly payment.

Low income families will not be affected by the cut, but will be hit by the "uprating", which is a capped increase of 1%. It is calculated this will cost a family with two children £1100 a year.

Families with one parent with a taxable income of more than £50,000 will lose some of the benefit, and it will be withdrawn entirely if one parent earns above £60,000.

Deputy First Minister Nicola Sturgeon, left, described it as "cack-handed" because a couple each earning £49,000 will keep all the benefit, while a couple with a sole earner on £51,000 will lose out.

People on the higher incomes must stop claiming the benefit or pay it back at the end of the year through the self-assessment tax system.

The changes have been criticised for complicating a system that because of its universality was previously one of the easiest to apply.

THE changes to this benefit have been estimated by the Scottish Parliament Information Centre to affect 39% of all housing benefit claimants in Glasgow.

The biggest change is a cut in the benefit if the house is deemed to be too large and there is a spare bedroom.

The classification of a spare bedroom is when there is a couple with two bedrooms regardless of what the extra room is used for.

The cut means a loss of 14% of rent if you have one spare bedroom and 25% if you have two or more spare bedrooms.

Families will also be hit if they have two children under the age of 10 of the same sex and have three bedrooms because the children are considered young enough to share a room.

From April, this will be phased out over the next two years and replaced by Personal Independence Payment (PIP). Everyone of working age will be affected by the change but there are no plans to change for under-16s or pensioners.

About 600,000 people are expected to lose their entitlement to the benefits completely because the new rules are tougher and many existing claimants will not qualify under the new rules.

In April any new claims in north England will be assessed under PIP.

New claims elsewhere in the UK will be under the PIP assessment from June.

Between this year and 2015 anyone who reports a change in circumstances or the period of their claim comes to an end will have to re-apply using the new rules.

After 2015 all claimants will be invited for a new assessment under the new system and changed.

Ester McVey, Minister For The Disabled, told MPs about 560,000 claimants will have been assessed by October 2015. Of these, 160,000 will get a reduced award and 170,000 will get no award.

PEOPLE claiming this allowance will be switched to Universal Credit, but a number of sanctions have been introduced that are designed to encourage people to stay in a job and accept offers of work.

Higher Level sanctions if someone leaves job voluntarily will lead to claimants losing all of their Allowance for 13 weeks for a first failure, 26 weeks for a second failure and 156 weeks (three years) for a third failure.

Lower Level sanctions for failing to attend an adviser interview will lead to claimants losing all their Allowance for a fixed period of four weeks for the first failure and 13 weeks for subsequent failures.

Changes to Council Tax benefit are being introduced but the Scottish Government and the Convention of Scottish Local Authorities have agreed a deal that will ensure no one in Scotland is affected by any reduction in the amount they are due.

stewart.paterson@ eveningtimes.co.uk

Families

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