The Welfare Reform Bill provides for the introduction of a 'Universal Credit' to replace a range of existing means-tested benefits and tax credits for people of working age, starting from 2013. The Bill follows the November 2010 White Paper, Universal Credit: welfare that works, which set out the Government’s proposals for reforming welfare to improve work incentives, simplify the benefits system and tackle administrative complexity.
This paper has been prepared for the Second Reading debate in the House of Commons. For information on the provision in the Bill relating to the introduction of Universal Credit, please see the complementary Library Research Paper, 11/24. Besides Universal Credit, the Bill proposes a number of other significant welfare reforms, including replacement of the current Disability Living Allowance, restriction of Housing Benefit entitlement to social housing tenants whose accommodation is larger than they need, time-limiting the payment of contributory Employment and Support Allowance to twelve months, and capping the total amount of benefit that can be claimed.
On 11 November 2010 the Government set out plans for a 'Universal Credit' to replace most in work and out of work benefits for people of working age. This note gives an overview of the main features of the Universal Credit and looks at some of the issues raised by the proposals.
The June 2010 Budget announced that a new "objective medical assessment" would be introduced for both new and existing working age DLA claims from 2013-14, saving over £1 billion a year by 2014-15 and reducing the DLA caseload by 20%. On 6 December the Government published a consultation paper, Disability Living Allowance reform, which sets out plans for an entirely new benefit - the "Personal Independence Payment" - to replace DLA, starting from 2013-14.
The June 2010 Budget announced that from April 2011 the Sure Start Maternity Grant would be restricted to the first child only in a family, saving around £73 million a year. The Social Security Advisory Committee believes that the measure "lacks a coherently argued rationale", and the House of Lords Merits of Statutory Instruments Committee has suggested that the Government needs to set out more clearly the rationale for the change and its anticipated impact. A particular concern is that changes to the Social Fund Budgeting Loans scheme to mitigate the impact on families will not come into effect until early 2012.
The Spending Review on 20 October 2010 announced that, from April 2012, for those Employment and Support Allowance claimants assessed as eligible for the Work Related Activity Group, contributory ESA will only be payable for up to one year. Some claimants affected by the change will be able to claim income-based ESA, but it is estimated that around 280,000 could lose entitlement to ESA completely.
The October 2010 Spending Review announced that the DLA mobility component would be withdrawn from people in care homes whose place was funded by a public body. The proposal was dropped by the Government during the passage of Welfare Reform Bill 2010-12. This note gives background to the original proposal and summarises initial reactions to it.
Cold Weather Payments are made to certain claimants of means-tested benefits during periods of very cold weather. To trigger the £25 payments, the average temperature in an area must be recorded as, or forecast to be, 0Â°C or below for seven consecutive days.
From April 2011 rates of many benefits and Tax Credits will increase; this will mainly be in line with the 3.1% annual increase in the CPI to September 2010. Exceptionally, this year the basic state retirement pension will be increased by the 4.6%.
The Government is committed to a "triple lock" for uprating the basic state pension, which means in future it will be increased by the highest of the increase in earnings, prices (as reflected in the CPI increase) or 2.5%. This year, to ensure the basic state pension is in line with the previous uprating rules, the increase in the RPI is being used. There is a requirement for Pension Credit to be increased in line with earnings. However, to ensure the least well-off pensioners benefit from the triple guarantee, the standard minimum income guarantee in Pension Credit will increase in April 2011 by the cash rise in a full basic State Pension.
This note sets out the basis for the April 2011 uprating. It focuses on the Retirement Pension and Pension Credit but also contains a summary of the main benefit and tax credit rates before and after the uprating.
Child Benefit is frozen until April 2014.
The Coalition Government's June 2010 Budget announced that a new "objective medical assessment" would be introduced for Disability Living Allowance claims from 2013-14. The Spending Review on 20 October announced that that the DLA mobility component is to be withdrawn from people in care homes whose place is funded by a public body. The Spending Review also announced that, from April 2012, for those Employment and Support Allowance claimants assessed as eligible for the "Work Related Activity Group", contributory ESA would only be payable for up to one year.
At the Conservative Party Conference in October 2010 the Chancellor announced that from January 2013 Child Benefit would be withdrawn from families with a higher rate taxpayer. This note looks at the background to the announcement and at reactions to it. Revised proposals for a “High Income Child Benefit Charge” were presented in Budget 2012 under which Child Benefit would instead be clawed back from families where the highest earner had an income in excess of £50,000. Further details can be found in Library briefing SN06299, Child Benefit for higher income families.
By April 2011 most lone parents with a youngest child aged seven or over will no longer be able to claim Income Support but will instead have to claim Jobseeker's Allowance and be available for and seek paid work.
The Welfare Reform Act 2009 includes provisions to enable piloting of mandatory 'work-related activity' for lone parents on Income Support and partners of benefit claimants with a youngest child aged 3-6. The Labour Government announced proposals to run 'pathfinders' in four Jobcentre Plus districts in England from October 2010.
This note sets out financial support available to domestic energy consumers, including grants for central heating, insulation, microgeneration equipment and social security measures. It also explains how to seek advice or information about gas and electricity problems from Consumer Direct and the Energy Ombudsman.