Further Updates

Key Welfare Reform Changes
Welfare Reform will result in changes to the benefits system. Many of the current benefits will cease to exist and new benefits and payment systems will be introduced. This information has been referenced from the NIFHA website www.nifha.org.uk

Universal Credit
Universal Credit will be one single benefit for people aged 18 to 64 years old paid to each household.  It will replace the following means-tested benefits:
•Child Tax Credit;
•Working Tax Credit;
•Housing Benefit;
•Income-Related Employment and Support Allowance;
•Income-Based Jobseekers Allowance;
•Income Support.
 
A number of concessions for Northern Ireland have been made including payment of Housing Benefit directly to landlords and fortnightly payments rather than monthly payments as seen in England, Scotland and Wales.
 
A pilot introduction of Universal Credit is planned to commence in September 2016 with full implementation commencing in January 2017
 
DIGITAL BY DEFAULT
 New claims for Universal Credit, Housing Benefit and Rate Relief will be made online, and all subsequent contact regarding the claim will be conducted online. The Northern Ireland Housing Executive (NIHE) will be introducing online applications for Housing Benefit from April 2016 on a phased basis.
 
BENEFIT CAP
 From May 2016 a cap will be introduced to limit the total amount that claimants can receive from a list of specified benefits.  The cap will apply to combined income from:
•Bereavement Allowance;
•Carer’s Allowance;
•Child Benefit;
•Child Tax Credit;
•Employment and Support Allowance (except where it’s paid with the support component);
•Guardian’s Allowance;
•Housing Benefit;
•Incapacity Benefit;
•Income Support;
•Jobseeker’s Allowance;
•Maternity Allowance;
•Severe Disablement Allowance;
•Widowed Parent’s Allowance;
•Widowed Mother’s Allowance;
•Widow’s Pension.
 
If the total comes to more than the maximum amount allowed, the claimant’s Housing Benefit payments will be reduced.
 
The level of the cap will be:
•£500 a week for couples (with or without children living with them);
•£500 a week for single parents whose children live with them;
•£350 a week for single adults who don’t have children, or whose children don’t live with them.
 
This will not apply if:
•The claimant receives Pension Credit or Working Tax Credit;
•A member of the claimant’s household is claiming benefits such as, but are not restricted to, Disability Living Allowance, Attendance Allowance, Industrial Injuries Benefits or the support element of Employment Support Allowance.
 
The Evason Report recommends supplementary payments for up to four years for families with children who may be affected by the benefit cap.
 
CHANGES TO PENSION AGE
 The age at which the State Pension is payable will increase from the current level of 65 for men and 60 for women to 66 for both.  The increase is due to take place between November 2018 and October 2020 with further increases planned for 2026 and 2044.
 
As a result of the increased pension age, this will result in a greater number of ‘working age’ claimants.  The benefits available to working age claimants are much less generous than those paid to those eligible for the state pension.
 
 SOCIAL SECTOR SIZE CRITERIA (BEDROOM TAX)
 The social sector size criteria, also known as the bedroom tax, is a change to Housing Benefit entitlement in which claimants receive less in Housing Benefit if they live in a property that is deemed to have one or more spare bedrooms.
 
The Stormont Agreement and Implementation Plan states ‘it has been agreed that the social sector size criteria – the so called bedroom tax – will not apply, as agreed by the Executive.’  However, the Evason Report supports ‘full mitigation of the bedroom tax for Northern Ireland Housing Executive and housing association tenants.’
 
NIFHA is currently seeking clarity as to whether the bedroom tax will be introduced but with full mitigation or not at all.
 
SOCIAL RENTS CAPPED AT LOCAL HOUSING ALLOWANCES
 Local Housing Allowance (LHA) is a rent assessment scheme calculated by taking into account local private market rents, local facilities and services, whether the renter is in shared accommodation and how many bedrooms are needed.
 
Single people under the age of 35 years are awarded a shared accommodation rate regardless of the number of bedrooms they have, or whether they are actually sharing.  If the rent is higher than the LHA, the tenant has to fund the shortfall from a source other than Housing Benefit.
 
The Chancellor announced in his Autumn Statement that the amount of rent that Housing Benefit will cover in the social rented sector will be capped at the relevant LHA level.
 
It is proposed that this measure will come into force in April 2018 and will only apply to new tenants who have signed their tenancy agreement after 1st April 2016.
 
SHARED ACCOMMODATION RATE
 The shared accommodation rate applies to most single people aged under 35 renting from a private landlord.  With the shared accommodation rate, the maximum Housing Benefit a claimant can receive is the rate for renting a single room in a shared house.  This applies even if they rent a self-contained flat.
 
The proposed cap on Housing Benefit will limit single people, with no dependents, under the age of 35 to the shared accommodation rate, regardless of accommodation size.
 
It is proposed that this measure will come into force in April 2018 and will only apply to new tenants who have signed their tenancy agreement after 1st April 2016.
 
HOUSING BENEFIT FAMILY PREMIUM
The Housing Benefit Family Premium is currently awarded to families with a child or qualifying young person.  One Family Premium applies regardless of the number of children or qualifying young people.
 
It is proposed that the Family Premium will no longer apply to Housing Benefit from 1st May 2016.
 
HOUSING BENEFIT BACKDATING
It is proposed that from 1st May 2016 the period in which new Housing Benefit claims can be backdated will be reduced to one month.
 
RATE RELIEF
Currently Rate Relief for housing association tenants is administered by the NIHE.  This is applied for through the Housing Benefit application form (HB1) and is credited to their rent account.
 
Rate Relief for social housing tenants receiving Universal Credit will be moving to Land and Property Services, this will mean that it will have to be applied for separately from Housing Benefit.  Payment of rate relief will also be made separately from Housing Benefit.
 
This change will be introduced in parallel with Universal Credit from January 2017
 
DISABILITY LIVING ALLOWANCE
Disability Living Allowance (DLA) consists of two elements, a care component and a mobility component.  As DLA is a non-means tested benefit it is payable to claimants regardless of whether they work or not.
 
The care component of DLA is paid at three rates depending on the level of care the claimant requires.  The mobility component is paid at two rates with the high rate paid for those unable or virtually unable to walk and the lower rate paid to those who can walk but require guidance or supervision.
 
Under welfare reform, DLA will be replaced by the Personal Independence Payment (PIP) for all working age claimants (16-64).  PIP will be assessed on a points based system and may see some existing DLA claimants deemed ineligible for PIP.
 
PIP will consist of two elements, a daily living component (replacing DLA care) and a mobility component.  Both components are paid at a standard or enhanced rate depending on the claimant’s needs.
 
The Evason Report envisages the majority of DLA claimants will migrate across to PIP, however it does recognise that the uncertainty surrounding this may cause anxiety to claimants.  It is proposed that those claimants who are refused PIP and lodge an appeal should receive supplementary payments equal to their benefit.  These payments would cease if an appeal is unsuccessful.
 
Those who qualify for PIP but at a rate lower than their previous DLA payment should receive supplementary payments if the reduced rate exceeds £10 a week.  Payments will be made for one year and at 75% of the loss.
 
PIP will be introduced for new claimants in summer 2016.  The date for existing DLA claimants to migrate across to PIP has yet to be confirmed.
 
ADDITIONAL DISABILITY BENEFITS
In addition to core benefits, households with adults or children with a disability may be entitled to additional payments.  These additional payments are referred to as premiums or elements, these are:
•Disability Premium;
•Enhanced Disability Premium;
•Severe Disability Premium;
•Tax Credits – Disability Element;
•Tax Credits – Severe Disability Element.
 
In instances where claimants transition from DLA to PIP and see their entitlement reduced, this will affect the disability premium they receive.
 
It is proposed that in cases where claimants lose this premium or see it reduced, supplementary payments can be made for up to one year to allow for an appeal to be made.
 
CARERS ALLOWANCE
Carer’s Allowance is a non-means tested benefit payable to those who provide care for someone who is ill or has a disability.
 
To claim carer’s allowance, the claimant must satisfy the following criteria:
•Not be in full-time education;
•Earn less than £110 per week;
•Must be providing at least 35 hours of care per a week.
 
The person being cared for must be in receipt of one of the following benefits:
•Attendance Allowance;
•Disability Living Allowance (DLA) care component at the middle or higher rate;
•Constant Attendance Allowance at or above the normal maximum rate with an Industrial Injuries Disablement Benefit, or basic (full day) rate with a War Disablement Pension
•Armed Forces Independence Payment.
 
DLA is due to be replaced by the Personal Independence Payment (PIP) for working age claimants.  Carers who provide care to those affected claimants may have their entitlement to carer’s allowance affected as a result of this transition.  Some current recipients of DLA may not be eligible for PIP and therefore eligibility for Carer’s Allowance would also cease.
 
The Evason Report recommends that there should be a supplementary payment for carers affected for one year after entitlement ceases.  This will cover any potential financial loss and allow time for advice to be sought and a fresh claim or appeal to be made if appropriate.
 
EMPLOYMENT AND SUPPORT ALLOWANCE
 Employment and Support Allowance (ESA) is paid to those who are having difficulty finding work due to ill health or a disability.  When applying for ESA, claimants must go through a work capability assessment to determine their ability to work.  Following this assessment claimants are placed into two groups, these are the work related activity group or the support group.
 
If a claimant is deemed able to move towards employment they are placed in the work related activity group.  Those who are deemed as unable to move towards employment are placed in the support group.
 
ESA is payable in two forms, these are contribution based ESA and income related ESA.  To be eligible for contribution based ESA the claimant must have made enough national insurance contributions over a certain period of time.  Income related ESA is a means tested alternative for those who have not made enough national insurance contributions to qualify for the contributions based ESA.
 
Currently those receiving contributory based ESA receive £102.15 a week if they are placed in the work related activity group and £109.30 a week if they are in the support group.  Those on income related ESA receive up to these amounts depending on what other income they have.  In either case the benefit is payable for as long as there is proof of unfitness for work.
 
A one year limit will be introduced in which contributory ESA can be claimed for those in the work related activity group.  This is regardless of the claimant’s ability to work at the end of this period.  This time limit will be retrospectively applied. This means that claimants who have been receiving contributions based ESA for more than one year at the time this provision is implemented will see their payments cease.
 
The Evason Report proposes to mitigate this provision by giving claimants three month’s warning that their entitlement will end.  This will allow time for advice to be sought and whether there are grounds for them to be reassessed and placed in the support group.  The report also recommends that an automatic check should be put in place to determine whether the claimant is eligible for income related ESA once their claim for contributions based ESA ceases.
 
A further mitigation in cases where claimants are not placed in the support group or eligible for incomer related ESA is to provide a supplementary payment equivalent to the total loss for one year after the claim has ceased.

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