Author: davepickering

A Happy New Year? Not for people on benefits. The introduction of the controversial Universal Credit is sure to be one of the biggest stories of 2013. It’s the most radical shake-up to the welfare system in seventy years, but what does it mean for you?  Granton Information Centre’s Roddy Samson (pictured below) has been giving presentations on changes to the benefits system, and the impact these changes will have on the lives of millions of people. Below, he guides us through the benefits maze: 

‘The rationale for changing the welfare system is a generally accepted belief that the current system is far too complex, with too many different types of benefit and allowances. So the Westminster government is seeking to simplify the system and make it easier to understand – and will also make savings of around £8 – 10 billion as it does so!

The idea behind the reforms is to get people back to work, and to try to make pay. Between 2010 and 2013 there will be 39 changes to the benefits system, some are already in place and more will come in next year.

The main points to consider are Income Support, Rent Capping, Disability Living Allowance (DLA) the introduction of the Universal Credit, benefits caps, Housing Benefit and the scrapping of Incapacity Benefit.

Income Support is now generally paid to lone parents – is used to be the case that lone parents could claim income support up until their child was 16 years of age. That dropped to twelve, then seven and now, when the child reaches five years of age, the parent is expected to register to be available for work. That’s a major change.

Disability Living Allowance (DLA) is currently paid to people who have a disability or a long-term condition, and it’s paid both to people in work and out of work. There are two sections to it – mobility and care – but DLA will be scrapped altogether next year and replaced by Personal Independence Payment.

There will be a new, tougher medical test for people on DLA; new claimants will be tested and existing claimants will be re-assessed by an organisation called ATOS who were contracted by the Department of Work and Pensions to carry out the medical assessments. The retesting will mean a lot of people will lose their entitlement to this benefit, there will be substantial loss of income and the impact will be that people with disabilities – many of whom require a significant level of care – will find that they have far less money coming into their household. Universal Credit is the flagship of the government’s welfare reform agenda, a single ‘super-benefit’ that will replace a number of existing benefits – including Income Support, Job Seekers Allowance, Employment Support Allowance, Housing Benefit and Tax Credits – and replace this with one single benefit payment.

Universal Credit is supposed to be structured to make work a better choice than being on benefits, but there has already been a lot of criticism of the proposals. Universal Credit introduces conditionality and sanctions for the first time. Just now, you have Tax Credits to top-up the incomes of people on low pay, which are paid if you work 16 hours a week. – but the government proposes that you must now work for at least the equivalent of 35 hours a week at the national minimum wage to qualify – and if you don’t, they suggest you should ask your employer either for more hours or for a wage rise!

Job Seekers Allowance will also become part if the Universal Credit, but if you fail to meet the conditions of the benefit the sanctions will now go much higher – they are talking about sanctioning people for up to three years, which means that people could be left with no money for that period.

The other problem with Universal Credit is that it’s going to be paid monthly, with all benefits paid in one lump sum. There’s a real problem with this, in that – to take housing benefit, for example – rent is currently paid directly to landlords. If you give large sums of money to people with drug or alcohol issues, and other vulnerable people, what is likely to happen is that they will spend the money on other things and not on the essentials, leading to rent arrears and potential debt problems.

The other problem with this is that applications for Universal Credit must be made on-line, which poses huge problems for people who either do not have access to computers or others who have difficulty operating them – the on-line application can take one and a half to two hours to complete. The government also plans to introduce a Benefit Cap from next April. This is supposed to be about fairness – making sure that people on benefits are not better off than families in work – but this will impact on larger families and those whose housing costs are higher. The benefits cap has been set at £500 for couples with or without children living with them, and for single parents whose children with them. For single adults without children or with no children living with them the cap is set at £350.

The new rules on Housing Benefit is being called the Bedroom Tax, and it basically means that, if you are a single person who lives in a two bedroom house, you will not be paid additional housing costs – you will only get enough to cover the cost of a one-bedroom flat. The idea behind it is that there are lots of people living in homes with spare rooms, but the fact is that there are very few one-bedroom flats available, particularly in areas like North Edinburgh. The difference in cash terms is a cut of around £14 a week per unoccupied room.

People on Incapacity Benefit are also facing tougher tests as the government tries to get more people off benefits and into work, and the medical focuses on what people are able to do other than what they are unable to do, the thinking being that almost everybody could carry out some form of work. What we’re finding, though, is that as many as 34% of those on Incapacity Benefit don’t turn up for their medical and disappear off registers altogether. Of those who do turn up for the medical, 37% are passed fit for work – but 71% of those who challenge the decision are successful on appeal when they are represented by organisations like ourselves.

In summary, these are massive cuts. It’s clear that no-one will be better off as a result of the latest welfare reforms, whereas even more people will be worse off as the new arrangements are introduced. There are massive social implications, affecting huge swathes of society – but the poorest, in particular, will be hardest hit.’

So there you have it. As Neil Kinnock once said: ‘I warn you not be ordinary. I warn you not to be young. I warn you not to fall ill. I warn you not to get old.’ That day of reckoning is now fast approaching. For too many British citizens, rather than a new year of hope and opportunity 2013 promises to be a year of pain, misery and despair.

If you are confused about how the benefits system changes will affect you, make an appointment to see an adviser at Granton Information Centre or attend a drop-in session. Telephone 552 0458 for more information.