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NIFHA | Policy | Welfare Reform

Welfare Reform

Welfare reform sees the introduction of a wide range of changes to the social security system in Northern Ireland. Some benefits will cease to exist and new benefits and payment systems are being introduced.

NIFHA is supporting its members through the changes introduced as a result of welfare reform. We are engaging with government and departmental officials to ensure housing associations are represented as key partners throughout the implementation process.

A key welfare change is the introduction of Universal Credit. This is a single means-tested benefit which will be paid to people aged 18 to 64 years and replaces a number of existing benefits, including Housing Benefit. Universal Credit has been live in areas of the North West of England since 2014.

The National Housing Federation has produced a video in which staff and tenants from three housing associations talk about their experiences with Universal Credit including online applications, money management and changes they’ve made.

The Welfare Reform (Northern Ireland) Order 2015 came into force on 10 December 2015 and introduced the primary rules for welfare changes such as the Benefit Cap, Universal Credit and Personal Independence Payments (PIP). Welfare changes introduced in Northern Ireland will be given greater clarity by secondary legislation which will provide the detail as to how these changes will be implemented.

Read more about the key upcoming welfare reforms due to be introduced in Northern Ireland below…

Universal Credit

Universal Credit is a single means-tested benefit for working-age people aged 18 to 64 years and is paid to each household. It will replace the following means-tested benefits:

  • Income Support;
  • Income-Based Jobseekers Allowance;
  • Income-Related Employment and Support Allowance;
  • Child Tax Credits;
  • Working Tax Credits;
  • Housing Benefit.

Universal Credit will be paid monthly by default but claimants can choose to receive payments fortnightly. The housing element of Universal Credit will be paid by default to the landlord on a monthly basis.

At the start of a claim for Universal Credit the joint claimants must choose whether payment is made to one single account or whether to split payments across two accounts (there is no default option).

The introduction of Universal Credit will be carried out in two phases:

  • Transition phase – new benefit claims commencing from September 2017;
  • Managed migration – existing benefits claims will transfer to Universal Credit from July 2018.
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.

Online applications for Universal Credit and Rate Relief will be launched in September 2017.

The Northern Ireland Housing Executive (NIHE) is planning to introduce online applications for Housing Benefit for non-Universal Credit claimants. It is anticipated that this will be introduced on a phased basis.

Benefit Cap

From 31 May 2016 the Benefit Cap has introduced an upper limit to the amount of benefits a household can receive. The following benefits will count towards the Benefit Cap:

  • Bereavement Allowance;
  • Child Benefit;
  • Child Tax Credit;
  • Employment and Support Allowance – Work Related Activity Group;
  • Guardian’s Allowance;
  • Housing Benefit;
  • Incapacity Benefit;
  • Income Support;
  • Job Seeker’s Allowance;
  • Maternity Allowance;
  • Severe Disablement Allowance;
  • Widowed Parent’s Allowance;
  • Widowed Mother’s Allowance;
  • Widow’s Pension;
  • Widow’s Pension (age related).

If the total comes to more than the maximum amount allowed, the claimant’s Housing Benefit payments will be reduced.

The Benefit Cap limits are:

  • £500 per week (£26,000 a year) for lone parents or couples (with or without children;
  • £350 per week (£18,200 a year) for a single person without responsibility for children.

In the 2015 Summer budget, the government put forward proposed plans to reduce the Benefit Cap for families to £384.62 per week (£20,000 a year) and £257.69 per week (£13,400 a year) for single claimants. The new cap is planned to come in from Autumn 2016.

The Benefit Cap 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.

Supplementary payments, payable for up to four years, may be available for households, with children, identified as being affected by the Benefit Cap from 31 May 2016. Those affected by the Benefit Cap, do not need to apply to receive a supplementary payment. This will be paid directly to the landlord by the Department for Communities.

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.

From January 2017 the new criteria will allow for one bedroom for:

  • Each adult couple;
  • Any other adult aged 16 or over;
  • Any two children of the same sex aged under 16;
  • Any two children aged under regardless of gender;
  • Any other child (other than a foster child or child whose main home is elsewhere);
  • A carer (or team of carers) who do not live with the claimant but provide overnight care.

If the claimant is living in a property that has more bedrooms than required under the social sector size criteria the eligible rent will be reduced by:

  • 14% if they have one more bedroom than is required;
  • 25% if they have two or more bedrooms than what is required.

The social sector size criteria will not apply to

  • Those over State Pension age;
  • Those in shared ownership schemes;
  • Those in sheltered or supported housing who have support services provided by a not-for-profit landlord;
  • Disabled children in receipt of middle/high rate DLA;
  • Parents with adult children in the armed forces who normally live with them will be able to retain the bedroom for that adult child whilst deployed on operations;
  • Foster Carers – they are allowed one additional bedroom so long as they have fostered a child or become an approved foster carer within the last 52 weeks.

The Northern Ireland Executive has committed to ‘full mitigation of the bedroom tax NIHE and housing association tenants.’ This will ensure that no one will be impacted financially when the social sector size criteria is introduced. Supplementary payments to mitigate the social sector size criteria will be automatically applied and payments will be made by the Department for Communities direct to landlords. These mitigation payments will remain in place until 31 March 2020.

Social Rents Capped at Local Housing Allowance Rates

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.

This measure will come into force in England, Scotland and Wales in April 2018 and will only apply to new tenants who have signed their tenancy agreement after 1 April 2016.

The Department for Communities is carrying out an impact assessment before making a decision on whether to introduce this cap in Northern Ireland.

For more information on current LHA rates throughout Northern Ireland click here.

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.

This measure will come into force in England, Scotland and Wales in April 2018 and will only apply to new tenants who have signed their tenancy agreement after 1 April 2016.

The Department for Communities is carrying out an impact assessment before making a decision on whether to introduce this cap in Northern Ireland.

Housing Benefit Family Premium

The Housing Benefit Family Premium of £17.45 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.

The Family Premium will no longer be applicable for new claims made on or after 5 September 2016.

Housing Benefit Backdating

The maximum period in which Housing Benefit can be backdated will be reduced to one month from 5 September 2016.

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 September 2017.

Personal Independence Payment (PIP)

PIP will replace Disability Living Allowance (DLA) for people aged 16 to 64 years. It is a non means-tested benefit, this means that a person’s income or savings are not taken into account. It will help people with a disability or long-term health condition whether they are working or not. DLA will remain for children up to the age of 16 and anyone aged 65 or over.

PIP consists of two components:

  • Daily living component – this will replace the DLA care component and will be paid at either a standard or enhanced rate.
  • Mobility component – this will replace the DLA mobility component will be paid at either a standard or enhanced rate.

Some people are entitled to receive just one component while others receive both.

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 from 20 June 2016. This will be for new claims and where a claimant reports a change of circumstances. All remaining DLA claimants aged 16 to 64 years will be randomly selected for assessment and invited to claim PIP. This will happen over a number of years between December 2016 and December 2018.

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.

Carer's 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;
  • 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.

As DLA is due to be replaced by the 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

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.

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.

Further information is available to NIFHA members in a downloadable guide available by logging into the Member’s Area.

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