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Evason working group publishes welfare reform mitigations package

Professor Eileen Evason’s working group has published its report on how Welfare Reform should be mitigated by the NI Executive. The group’s recommendations include the full mitigation of the “bedroom tax”, and the mitigation of the household benefits cap, for an initial period of 4 years. The administration of the bedroom tax mitigation has yet to be decided.

Welfare reform in Northern Ireland

The bedroom tax, benefit cap and other measures were introduced by Westminster in March 2012. Since then, the NI Executive has been considering how to implement a programme of welfare reform in Northern Ireland.

In November 2015, the ‘Fresh Start’ agreement was reached: welfare reform would be passed for Northern Ireland from Westminster, and the NI Executive would provide £585 million to fund a package of Welfare Reform mitigations over a period of 4 years. This money would be allocated by an expert working group led by Professor Eileen Evason, and would include the non-application of the “bedroom tax.”

It was also agreed that additional funding would be made available for independent advice services, in recognition of the complexity of changes to the welfare system.

Evason Working Group Mitigations

The main elements of the package proposed by the Mitigations Working Group are:

  • The mitigation of the bedroom tax in Northern Ireland, for a period of 4 years. The administration of this scheme has not yet been decided: options could include the non-application of the bedroom tax, or the creation of a dedicated bedroom tax mitigations fund to which affected claimants could apply.
  • A package of supplementary payments for varying periods for carers, claimants with disabilities, claimants suffering from ill health and families. This includes a supplementary payment to fully mitigate any households affected by the benefit cap.
  • Publishing a dedicated advice strategy, which will aim to ensure that claimants have access to skilled, independent advice throughout the implementation of welfare reform. This would include an independent helpline to assist claimants with any sanctions applied.
  • A package of mitigations relating to Universal Credit, including:
    • Payment of rent directly to landlords;
    • The expansion of the Discretionary Support Scheme to specifically include “working poor” families, with a dedicated budget of £35m per year from 2017/18;
    • The creation of a contingency fund of £2m to make emergency payments where hardship occurs due to difficulties with Universal Credit;
    • Steps to improve the financial capability of those affected including: support for food poverty measures; the creation of a Welfare Reform Information Network involving the voluntary, faith and public sectors; and support for credit unions in providing socially responsible credit.

The Welfare Reform (Northern Ireland) Order 2015

The Welfare Reform Order has four main elements:

  1. Universal Credit will replace six current benefits and tax credits, including Jobseeker’s Allowance, Housing Benefit, and Child and Working Tax Credits. Universal Credit will be available to the unemployed and low-income working households, and is structured with the aim of incentivising work.
  2. Personal Independence Payment [PIP] will replace Disability Living Allowance [DLA]. Where currently, DLA can be claimed at any of three rates (‘low’, ‘middle’ and ‘high’), PIP has only two rates – ‘standard’ and ‘enhanced’ – which are broadly similar to the middle and high rates of DLA. This effectively means that low-rate disability is not compensated by PIP. In addition, PIP claimants must undergo rigorous medical assessments and re-assessments in order to claim the benefit; concerns have been raised about the quality and consistency of these assessments.
  3. Social Sector Size Criteria or the “Bedroom Tax”. Under Welfare Reform, housing benefit for the social sector will become similar to the Local Housing Allowance system that applies for private tenants and households will only be entitled to claim benefit for the number of bedrooms they are seen to require. If the property has more bedrooms than the claimants are seen to need their Housing Benefit is substantially reduced. This policy was intended to foster more efficient use of housing stock and to contain growing Housing Benefit spending. The bedroom tax has been opposed by a range of political parties across Northern Ireland; the Fresh Start agreement has confirmed that the bedroom tax will not be applied in Northern Ireland for at least four years.
  4. Benefit Cap. The benefit cap places an overall limit on the amount of benefits a working-age household can receive. The 2012 Welfare Reform Act sets this figure at £26,000 per year for family households, and £18,200 for single persons. Claimants receiving DLA, PIP, Attendance Allowance, the support component of ESA or industrial injuries benefits are exempt from the cap.

What happens next?

Professor Evason’s working group is due to brief the Social Development Committee in February; secondary legislation will then be developed and passed to implement the group’s recommendations. Regulations must be passed before the Assembly goes into recess in mid-March. The Northern Ireland (Welfare Reform) Order 2015 is due to receive Royal Assent on 1st May 2016; changes to the welfare system will then be implemented across Northern Ireland over the next few years.

Housing Rights training course

The impact of Welare Reform on NI housing, on the 28 April 2016, will consider key areas such as:

  • Housing Benefit’s transfer into Universal Credit
  • Service charges and implications for supported housing
  • Key mitigations, including the “Bedroom Tax” and the benefit cap

Tagged In

Benefits, Money Matters, Social Tenancies, Welfare Reform, Policy

This article was written on 20 January 2016. It should not be relied on as a statement of the current law or policy position. For help with housing issues please contact our helpline on 028 9024 5640 or use our online chat service at www.housingadviceNI.org.