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Work Allowance Cuts - Transitional Protection ?
“Jo Stevens: I invite the Secretary of State to confirm that current claimants of universal credit will face losses next April as a result of cuts to the work allowance. Can he explain to the House why there is no transitional protection for universal credit, as there is for tax credit recipients?
Mr Duncan Smith: I thought I had made this clear, but I will make it clear again. For those already on universal credit, advisers will support them through the additional resources and the flexible support fund to ensure that their status remains the same.... “
There’ll probably be over 50,000 working UC claimants affected by this in April. Is that a commitment to transitional protection? Can anyone decode the IDS-speak ?
It may be an attempt to shift help from a statutory basis to a discretionary basis as the FSF is not an entitlement .
Mr Duncan Smith has a very interesting concept of ‘making things clear’. His CV was equally ‘clear’ I gather….
Here’s a UC guide to the flexible support fund -
https://about.universalcredit.service.gov.uk/kms/Pages/Flexible_Support_Fund.htm
This is from evidence to the Public Accounts Committee on 7 December -
‘Q29 Caroline Flint: The Secretary of State apparently said on ‘The Andrew Marr Show’ that “nobody loses a penny” from cuts to in-work support as a result of cuts to the universal credit programme. Is that correct?
Neil Couling: I think he went on to say that for anybody moving from tax credits into universal credit, because of the transfer protection… in 2018, as part of our plan, we start moving people off tax credits into universal credit, and for them, there is cash protection. If their entitlement to universal credit is lower than their tax credit entitlement, we will top up the amount to the level of the tax credit entitlement, and that is what the Secretary of State was talking about.’
Still not clear but adds to what IDS said in giving impression that there won’t be formal transitional protection for UC claimants….
I cannot believe how they can still put forward that UC makes work pay and how much better it is than current benefit system. Removing/reducing the current earnings disregard from UC with no change to the taper means that claimants are worse off in comparison. Also finding that in reality the plan for UC to respond to earnings impacting on entitlement and reduce the problem with the ‘lag’ on amended housing benefit claims is not what claimants experience in reality. They have no idea what they will get at the end of the assessment period and at risk of not being able to pay rent from reduced UC at a point any earnings have been spent.
Daphne quoted the amending regs in an earlier post. It is very clear to me that the changes will apply to new and pre-existing awards of UC. Therefore, for TP to apply, there would need to a supplementary rule permitting this, which there does not appear to be. I wager a cold Kit Kat we will not see one as things stand.
Decoding ‘status remains the same’ means, I think, that ‘we will help you remain a worker’ by offering bits and bobs from the FSF. This is miles away from entitlement based TP principles, and also very short of the kind of help that the discretionary DHP scheme seeks to offer.
We should not have to have to decode these kind of statements. Just tell us the truth. Reminds me of the slippery wording in the Budget disclosing that the two child load limiter will apply to UC from April 2017 irrespective of the birth date of the children. It requires a lamentable skill to disclose without disclosing.
http://www.theguardian.com/society/2015/dec/21/universal-credit-benefit-cuts-work-allowance
So now we know. The answer is that everyone must work harder.
Like Boxer in Animal Farm…..
See also this thread .. http://www.rightsnet.org.uk/forums/viewthread/9163/
Refreshing though it is to hear political honesty of the calibre of Mr Couling’s - telling claimants they’ll simply have to work and earn a lot more to make up for the effects of cuts to their benefit - I’m struggling to understand the maths involved in his response. ‘Someone could recoup the loss from the Work Allowance changes by working 3-4 additional hours a week at the national living wage,’ he said, but I can’t quite follow that.
I’ve only done a rough scribbling to check - and in one of the worst-case scenarios - but I can’t see how working 4 extra hours a week and earning NLW will go anywhere near to making up for the loss of UC. This assumes NLW at April 2016 of £7.20 an hour - and doesn’t factor in Tax or NI, which if included would make the claimant worse off.
Lone parent with no rental costs - assumes all old Work Alowance was used pre-April, so earnings over £734 pm
Old Work Allowance £734 - new WA £397 = £337 loss in WA
Effect on existing wage: £337 * 65% = £219.05 pm cut to UC due to WA changes
But thank the Lord, extra work! 4 hours * NLW (4 * £7.20) = £28.80 p/w = £124.80 pm increased earnings
Increased earnings of £124.80 * 65% = £81.12 reduction in UC pm
£124.80 increased earnings - £81.12 UC reduction = £43.68 net income gain pm
Although this is only one example, and doesn’t take into account any knock-on effect on CTR (which would make the claimant still worse off), I can’t see how gaining £43.68 a month through an extra 15 hours work makes up for the loss of £219.05 a month due to the WA cuts. It’s a crude example, but the sums are so far out - by a factor of 5 - that I’m not going to bother working out any other cases until I’ve had my maths checked.
Is this (within the simplistic model I’ve set out) right, or have I gone terribly wrong somewhere?
Is this (within the simplistic model I’ve set out) right, or have I gone terribly wrong somewhere?
Can’t see anything wrong with your calculation - even single UC claimants without children will need to do more than 3-4 hours to catch up - see http://www.rightsnet.org.uk/forums/viewthread/9163/ .
Thanks, Jon - obviously a pass at maths but a fail at reading comprehension. (Note to self: follow all links before replying.)
I’ll make my follow-up in the appropriate thread.
PA
[ Edited: 23 Dec 2015 at 01:41 pm by DWRS ]Further evidence that there won’t be any transitional protection for existing UC claimants from this written answer in parliament -
‘Stephen Timms -
To ask the Secretary of State for Work and Pensions, what estimate he has made of the average change in entitlement for existing universal credit claimants who are in work as a result of changes to benefits taking effect in April 2016.
Answered by: Priti Patel
Answered on: 11 January 2016
The vast majority of existing Universal Credit claimants will see no change in entitlement. Those who are in work and who are affected will receive additional support from their work coach and, where appropriate, from the locally administered flexible support fund.’
...Answered by: Priti Patel
Answered on: 11 January 2016The vast majority of existing Universal Credit claimants will see no change in entitlement. Those who are in work and who are affected will receive additional support from their work coach and, where appropriate, from the locally administered flexible support fund.’
So that’s effectively an admission that the vast majority of UC claimants are not in work. (Work allowances are abolished for most UC claimants and reduced for the rest - so almost every UC claimant with earnings will lose at least some entitlement.)
At first glance the UC stats ( https://www.gov.uk/government/statistics/universal-credit-29-apr-2013-to-3-dec-2015 ) suggest that around a third of UC claimants are in work but it’s been pointed out on another forum that the stats include anyone who has any earned income at any time in the AP closest to the count date - so the “in employment” count includes UC claimants who’ve recently lost their job (Data tables: 3.1 note 6) . In addition, former UC claimants with nil entitlement due to earnings are counted as an “in employment” UC claimant for six months even though they’re not getting any UC (Page 8).
My friend in Liverpool is losing £219 per month of UC from April as a result of the reduction in the Work Allowance for lone parents with no housing costs from £734 to £397 pcm.
She received a “courtesy” phone call from DWP to inform and offer support. When she asked what the “support” would comprise, she was told it would be “advice to find a better paid job”.
Do we know how many other ‘hard working families’ are affected in this way?
Someone on tax credits in the exact same situation would not be affected, but she went onto UC after completing University as had to sign on for a few weeks before finding work. I have advised her to contact her MP.
Shocking for individual and hope landlords who have secured third party deductions are also aware of that it is pointless from April for tenants who work particularly those on zero hours contracts.
“She received a “courtesy” phone call from DWP to inform and offer support”
What!!! No mention of a DHP? Your eager “loads of cash” local Council is standing by to assist??
Difficult to award a DHP to someone with no housing costs.
True Gareth .......but not quite the point I was making.
The former Sec of State suggested yesterday this change was forced on him by the Treasury and that he had to fight to get all the extra DHP cash to help those in most need….............yes he actually mentioned the DHP scheme….why break the habit of the past 6 years.
Has anyone seen the letters sent out to UC claimants with earned income telling them about the changes to work allowances? Priti Patel said there would be a dedicated helpline for these people (although presumably about as useful as the courtesy call mentioned above).
If anyone has seen such a letter, I’d be very interested. It’s absolutely clear that there is no transitional protection for anyone already claiming UC. Though numbers earning above the new work allowances may be low, anyone in that position (which in many cases will be anyone earning anything at all as some will have no work allowance post cut) will see a big fall in their UC from one assessment period to the next.
It’s a pretty clear message.
Could someone advise? The UC work allowance new rates state
Higher work allowance (where no HCE in UC) Amount
Single claimant
responsible for one or more children or qualifying young persons
and/or has LCW
£397
Joint claimants
responsible for one or more children or qualifying young persons and/or
one or both have LCW
£397
2. Lower work allowance
Single claimant
responsible for one or more children or qualifying young persons and/or
has LCW
£192
Joint claimants
responsible for one or more children or qualifying young persons and/or
one or both have LCW
£192
1 UC Regs, reg 22(table)
Does this mean that only people with LCW have a work allowance? Or is it sloppy wording and people with children still have a work allowance?
Thank you folks
I read it like this from https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/480317/proposed_benefit_and_pension_rates_2016_to_2017.pdf:
Higher work allowance (no housing element):
Single claimant, one or more children 397.00
Single claimant, limited capability for work 397.00
Joint claimant, one or more children 397.00
Joint claimant, limited capability for work 397.00
Lower work allowance:
Single claimant, one or more children 192.00
Single claimant, limited capability for work 192.00
Joint claimant, one or more children 192.00
Joint claimant, limited capability for work 192.00
...but then again most of what is coming out at the moment has me thoroughly confused. But it is ‘fair’ to ‘hard-working tax-payers’. And stuff like that…er…..
People with children still have a work allowance (allbeit reduced). It has been completely removed for single people and couples who don’t have children (and don’t have LCW/LCWRA).
Apparently 59,000 people have been written to about the work allowance changes, according to Priti Patel yesterday - http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2016-04-12/33701
Apparently 59,000 people have been written to about the work allowance changes, according to Priti Patel yesterday - http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2016-04-12/33701
Even by their own statistics, they seem to have fallen short of notifying everyone potentially affected by the work allowance cut.
203,392 people were on the Universal Credit caseload, as of 11th February 2016. Of these, 80,363 (or 40 per cent) were in employment and 123,026 (or 60 per cent) were not in employment.
Official Statistics Universal Credit: 29 Apr 2013 to 3 Mar 2016
Over 80,000 people working, yet only 59,000 sent letters? Let alone the fact of anyone currently out of employment not being told their wonderful journey back into work might not be quite so wonderful anymore. Given that we understand it’s mainly childless people claiming UC at the moment (although no stats appear available to confirm or deny this), this is a worry.
Over 80,000 people working, yet only 59,000 sent letters?
I can’t tell if working couples on UC are being counted by DWP as two “people” on UC in the stats.
Do couples on UC generally only get one letter (or one each, as per tax credits)?
The Universal Credit stats figures are complex.
First:
“An additional improvement was made in March 2016 to the recording of the local office of a Universal Credit claimant. This led to revisions to both the starts and the people on Universal Credit series. Users are advised that statistics obtained prior to March are not comparable to the current figures”
That means that you need to go back and get the updated figures if you are looking at the historical stats - don’t use figures you had already got.
After that, the basis for the numbers of claims / claimants in the current release is described as:
“The claims figure in this release is defined as the total number of claims made to Universal Credit, up to the count date. If an individual goes on to make
multiple claims, each claim will be included in the headline figure. Claims that did not progress to the individual starting on Universal Credit are also
included.”
Presumably, in most cases, claims can only be made by individuals. Couples, except for NW and full scheme, will only appear because of changes of circumstance. See the last para (below) re stats on full service areas.
“It is also important to note that the headline figure for claims made is generally three weeks later than the figures provided for starts and the number of people on Universal Credit. This means that individuals who have made a claim to Universal Credit after the count date will be included in the claims made figure but will not be included in the starts and people on Universal Credit figures, even if they have completed the claim process and have started on Universal Credit. “
“A starter to Universal Credit is defined as an individual who has completed the Universal Credit claim process and accepted their Claimant Commitment.
The headline figure for starts includes all successful claims made for Universal Credit. Therefore, if an individual has started on Universal Credit more than
once during the period covered by this release, then each spell will be included in the headline figure. “
“The people on Universal Credit includes those who have started Universal Credit (as above) and have not had a termination recorded for this spell, up to
the ‘count date’. A termination would be recorded either at the request of the individual or if their entitlement to Universal Credit ends. For example, if they
no longer satisfy the financial conditions to receive Universal Credit as they have capital over £16,000, or if increased earnings reduced their award to
zero for six consecutive months. The count date for the people on Universal Credit figure relates to the second Thursday of the month.”
“The number of people on Universal Credit figure includes a breakdown on whether the claimant is in employment or not in employment, which is also subject to revision; although the expectation is that this will be within five per cent of the final figure. An individual on Universal Credit at the count date will be recorded as in
employment if they have employment earnings recorded within their completed Universal Credit assessment period closest to the count date. They may not be in employment precisely on the count date. “
“A limited test of the Full Service for Universal Credit was launched in Sutton, South London, on 26 November 2014, and expanded into Croydon and Southwark, South London on the 10 June 2015 and 4 November 2015 respectively. Claimants will manage their Universal Credit claim online to monitor payments, communicate with their work coach and record work search progress. Please note that this publication does not currently include statistics covering these areas.
The Full Service for Universal Credit was introduced into Hounslow, West London, on 27 January 2016, and Musselburgh, East Scotland, on 23 March 2016. Figures for Hounslow and Musselburgh in this publication do not include Full Service claimants. “
Does that help?
Apparently 59,000 people have been written to about the work allowance changes, according to Priti Patel yesterday - http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2016-04-12/33701
Letters advising of work allowance cuts did not inform claimants of the availability of the Flexible Support Fund. Priti Patel explains why in a written answer today -
‘The purpose of the correspondence was to notify the claimants who may be affected of the changes to the work allowances and to highlight the work coach as the primary source of additional support.
As the Flexible Support Fund is accessed at the discretion of the work coach and is based on individual claimant need, it was not explicitly referred to in the letter.’
NB - sample letters were deposited in the Commons library on 11 March 2016