Universal Credit Migration Could Be ‘Disastrous’ For Disabled People

The Work and Pensions Committee has claimed 100,000 families with children deemed “less disabled” will receive less money under Universal Credit than through tax credits. It said ministers’ promises to ensure “severely disabled” people will get more benefits under Universal Credit than the old welfare system will come at a cost to those not deemed severely disabled. The committee also raised concerns that the removal of disability premiums “risks disabled people living more isolated lives, relying on unpaid care – including from their own, dependent children – or simply being unable to complete certain basic daily tasks”. Read more on Inside Housing.

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Universal Credit – Parliamentary Written Answer

Debbie Abrahams: To ask the Secretary of State for Work and Pensions, what estimate his Department has made of the number of people receiving tax credits who will be receiving universal credit at the completion of full service roll-out.

Damian Hinds: [Holding answer 12 September 2017]: Based on the existing tax credit data and take-up we estimate that around 5.8 million people receiving Tax Credits will be receiving Universal Credit at the completion of Full Service roll-out.

The Government Is 'Wiping Out The Buy-To-Let Economy'

Philip Hammond’s failure to reverse George Osborne’s deeply unpopular tax reforms will have far-reaching implications for the buy-to-let industry, it has been predicted. Government plans to strip buy-to-let landlords of mortgage interest tax relief will have a “detrimental impact” on households up and down and the country, according to David Hannah, principal consultant, Cornerstone Tax. From next month, landlords will start to lose the right to tax deduct their mortgage interest costs at the rate they pay income tax - currently up to 45%. Instead, they will see this fall over the next three years and replaced with a 20% tax credit. Hannah has criticised the move, claiming it will result in rent increases for tenants across the UK. Read more on the Home website.

Corbyn Slams Universal Credit As ‘Institutional Barbarity’

The government is once again under pressure from outside about cuts being made to a key part of the welfare system.  Jeremy Corbyn focused on the cuts being made to Universal Credit, which he accused Theresa May of trying to “slip them through the back door.” The PM replied: “The introduction of universal credit was an important reform.” Corbyn hit back on the cuts, saying they are the same ones David Cameron tried to push through on tax credits. He also highlighted research that stated three million families will be £1,000 worse off from the cuts.  Corbyn highlighted research, which underlined the relationship between benefits sanctions and the rise in use of food banks, as well as one in five UC sanctions ending in a claimant becoming homeless. Read more on 24housing.

Universal Credit – A Programme In Recovery?

A new report from the Institute for Government judges that Universal Credit is now in recovery. A mere 300,000 or so households are receiving it. Serious challenges remain, not least transferring the huge numbers still on tax credits to the new system and ensuring that the most vulnerable, who include people with disabilities and long-term health problems, are able to cope. But many years later than originally planned, something that is recognisable as Universal Credit now looks likely to make it to the finish line. The report charts Universal Credit’s troubled history, which includes an utterly unrealistic initial timetable and the fact that the DWP started to build this hugely ambitious benefit reform before it had defined what it would look like and how it would work. Download the report from the Institute for Government website.

Tax Credit Cuts To Hit 800,000 Workers

About 800,000 people will still be hit by tax credit cuts from April because of a little-noticed change that survived the government’s controversial U-turn on the policy last year. Labour said the scale of those affected by the cut would come as a surprise to those who thought the chancellor had abandoned attempts to reduce tax credits under pressure from the opposition and some Tory MPs.

Osborne was forced into the humiliating climbdown over tax credits in his autumn statement in November following a defeat for the proposed measures in the House of Lords. The defeat prompted a clash between the government and the upper chamber over whether the Lords could block a measure with such large implications for the government’s finances. Read more on the Welfare Weekly website.

Poor Families Likely To Be Hit Unfairly By £12bn Welfare Cuts

David Cameron’s plans to focus £12bn of welfare cuts on slashing tax credits and other working-age benefits look set to be “extremely unfair” on the families who will lose money, the right-leaning Institute of Economic Affairs thinktank has said. The IEA supported the need for making savings in the welfare budget a spokesman said but the composition of the cuts “looks set to be extremely unfair on the working-age population”. He added: “Whilst important for getting cash to relatively poor families, tax credits discourage people from earning more money by creating high effective marginal tax rates, leading to bunching around part-time work hours. They could be reformed in a way which encourages full-time work. But simply salami-slicing the value of tax credits will hit certain households hard without creating this positive dynamic.” Read more on the Guardian website.

Universal Credit Could Make Working Fewer Hours More Attractive

Universal credit is facing significant design problems and needs serious reform if it is to meet its original goal of making work pay for most claimants. A nine-month review, conducted by Resolution Foundation, concluded that for some groups, especially women, universal credit could make reducing the number of hours worked more attractive. It suggests for these groups the fall in their employment earnings would largely be cushioned by the taxpayer.  The report states: “Multiple changes to UC since its conception – some policy-related, some reflecting a lower than originally anticipated budget – have altered both its design and expected impact.” It suggests it would take as much as £3bn to restore the planned UC taper – the rate at which UC is withdrawn as earnings rise – to the level at which tax credits were withdrawn. Read more on the Resolution Foundation website.

Housing Benefit to Be Targeted In Osborne's Welfare Cuts

Housing benefit could be cut by over 10% in George Osborne's July Budget as the government attempts to deliver its commitment to reduce welfare spending by £12 billion in two years. The Institute for Fiscal Studies said that the pledge to protect child benefit from the social security cuts means HB, along with tax credits and disability/incapacity benefits, would "most likely" take the biggest hit.  Carl Emmerson, IFS deputy director, explained: "Cuts of this scale amount to almost 10% of unprotected benefits. Finding such a reduction without cutting child benefit would mean that even more significant cuts would likely be required to spending on one or more of tax credits, housing benefit and disability & incapacity benefits." Read more on 24dash.

Benefit Changes Mean a Choice of 'Eat or Heat' For More Families

Soaring numbers of families with disabled children are being forced to go without food or heating because they can no longer afford the basics, according to research from Contact A Family. One third of families with disabled children are worse off as a result of benefit changes – nearly half by more than £1,500 a year. Changes to tax credits, a reduction in help with council tax and the "bedroom tax" were the commonest problems reported. Overall, 83 per cent of parents with disabled children say the family is now having to go without. Of these, almost a quarter say their child's health has worsened as a result, and more than two thirds suffered ill health themselves. Read more on the Independent website.

Welfare Delays Cause Soaring Numbers Using Food Banks

Delays and gaps in the welfare state are behind the soaring numbers turning to food banks, according to new research into those relying on charity in Britain. Minor adjustments to the benefits system could prevent many from needing emergency food, research commissioned by Oxfam, Child Poverty Action Group, Church of England and The Trussell Trust has found. For more than half of those interviewed, the immediate trigger which sent them to a food bank was linked to problems with welfare, including waiting for benefits to be paid, sanctions, problems with Employment Support Allowance or missing tax credits. Read more on the Independent website.

IDS Goes After Benefit Fraudsters, But What About These 3 Bigger Costs To The Taxpayer?

Iain Duncan Smith's DWP has launched a new advertising campaign encouraging people to phone a hotline if they suspect somebody they know is fraudulently claiming benefits. The government estimates that £1.1 billion is lost a year due to benefit fraud. However, there are three other issues that, from the government's own figures, are bigger problems;

·         The tax gap, charting the estimated amount of taxes unpaid thanks to evasion, avoidance, error and criminality, soared to £34 billion

·         £1.4 billion in benefit overpayments, an increase of nearly 6%

·         Unclaimed tax credits, with childless families missing out on £2.3 billion worth.

Read more on the Huffington Post website.

US-Style Finance Model Could Replace Social Housing Grant

A US model involving private investment supported by tax credits could be an alternative to the current system of social housing grant funding in the UK, a report has found. Funding Affordable Housing, written by Vic O’Brien development director at Greensquare Group, looks at the system of Low Income Housing Tax Credits (LIHTC) in the US.  Under this system, private corporations invest funds into affordable housing projects and receive tax credits over 10 years, creating a return on investment. The report suggests this avoids the present difficulties caused by low grant rates and the need for developers of affordable housing to have enough asset cover. The LIHTC model means providers do not need to make repayments from rental streams within the project. Download a copy of the report from the Winston Churchill Memorial trust website.

Benefits and Tax Changes Amount To 'Speeded-Up Thatcherism'

The Government's welfare benefits and tax changes will widen income inequality between rich and poor on a scale similar to that of Margaret Thatcher, new analysis reveals.  Research for the Fabian Society claims cuts to benefits and tax credits, particularly for working-age families with children, will amount to a “speeded-up replay of Thatcherism”, with inequality increasing twice as fast by 2015 as it did under the former Conservative prime minister.  The poorest families will lose more than 12 per cent of their net income on average, compared to around 3 per cent of net income for households in the ninth decile (the second most wealthy income bracket).  Read more on the Fabian Society website.

Poverty: Children – Parliamentary Written Answer

Chris Skidmore: To ask the Secretary of State for Work and Pensions what estimate he has made of the effect of (a) Universal Credit and (b) the Welfare Benefits Uprating Bill on child poverty.

Esther McVey (edited response): In the autumn statement (2012), it was announced that in light of the national economic situation, certain working-age social security benefits and payments, certain elements of tax credits, and child benefit, would be uprated by 1% rather than by prices (as measured by the consumer prices index ('CPI')) for the tax years 2013-14, 2014-15 and 2015-16. Because the relative poverty income line moves each year in cash terms some families will move below this line over the period.  We estimate that the uprating measures in 2013-14, 2014-15 and 2015-16 will result in around an extra 200,000 children being deemed by this measure to be in relative income poverty compared to uprating benefits by CPI.

‘Double Lockout Bill’ Cuts Support For Workers and Jobseekers

A new report reveals that the government’s welfare benefit uprating legislation is based on bogus claims and is a poverty-producing bill that will further exclude the poorest workers, jobseekers, carers and disabled people from the mainstream of society. The report finds that:

· The bill is poverty-producing and means that both absolute and relative child poverty will increase

 · Contrary to arguments made by Ministers, welfare spending on workless families has been falling and most Jobseekers Allowance claimants find new jobs within months

· Contrary to popular perception, benefit fraud is at its lowest ever recorded level and the ‘scrounger’ stereotype is grossly inaccurate

 · The government must focus on the root causes of social security and tax credit demand and prioritise progress on full employment, living wages, affordable housing and affordable childcare

Download a copy of the report from the CPAG website.

Soldiers, Nurses and Teachers Hit By Benefit Curbs

Half a million soldiers, nurses and teachers will have their income slashed under the coalition's benefits crackdown, according to a new report. The chancellor's sub-inflation rise in benefits and tax credits over the next three years will hit a whole range of the country's most trusted professionals.  Up to 40,000 soldiers, 300,000 nurses and 150,000 primary and nursery school teachers will lose cash, in some cases many hundreds of pounds, according to the Children's Society. The revelation appears to contradict the government's stated intention to target shirkers and scroungers, and will raise the temperature of the Commons debate and vote on the plan on Tuesday (7 January).  Read more on the Observer website.

Universal Credit – Parliamentary Written Answer

Mr Byrne: To ask the Secretary of State for Work and Pensions how many working-age benefit and credit recipients will be on universal credit by 2017.

Mr Hoban: We anticipate that all working age benefit and tax credit recipients who are entitled to universal credit will have been migrated onto universal credit by the end of 2017. On current projections this means that around 8 million households will be in receipt of universal credit by 2017.

Should Social Landlords Pass On The Bedroom Tax To Tenants?

The idea of social landlords reducing rents by universally reclassifying their properties against those hit by the bedroom tax may seem absurd, but let's do the maths.  We already know there aren't enough alternative one-bedroom properties for the 400,000 who qualify for them; there are only 60,000 relets of existing one bedroom properties each year.  Even if all one bedroom homes we have were only allocated to underoccupiers from now on, some would wait for seven years while being charged as much as £25 extra a week from an income of as little as £75. Add on council tax, utilities and existing debts, and it becomes an impossible, unaffordable situation for many.  The impact will be worst in the north of England, hit by higher levels of underoccupation and by other benefit cuts such as changes to employment and support allowance, tax credits, incapacity benefit and council tax. Recent estimates suggest that working age households will face an additional £4.50 a week in council tax, while across the north east of England 50,000 underoccupiers will need to pay an additional £30m a year in rent. The government's discretionary housing payment (DHP) fund stands at £1.25m, leaving a shortfall of at least £28m in help available for underoccupiers.  This won't improve much even when a promised DHP increase kicks in next year. Durham county council has estimated the impact of welfare reform as a whole on the local economy in 2013 at £150m, worse in following years. That's £150m less going into local pockets, businesses and services when it already has the highest worklessness and the lowest job creation rates in the country.  Read more of this opinion piece on the Guardian website.

Warning over Botched Roll Out Of Universal Credit

UNISON, the UK’s largest union, is warning the government that its botched roll out of Universal Credit – less than 18 months away – will make it more difficult for low income families to claim much-needed benefits and tax credits. The government wants to combine the introduction of Universal Credit with a shift to administering the service online. But analysis by the union has proved that the very people who rely on benefits and tax credits – those on low incomes - are the least likely to use the internet.   Low income families are also the least likely to be able to afford the cost of calling the 0845 number they will have to ring to access these benefits and tax credits if they can’t apply online. The cost can be as much as 40p per minute from mobiles. The union has emailed every councillor in England, Wales and Scotland, calling on them to take action, as the switch could mean the loss of 20,000 jobs in Housing benefits and tax credits. The union is also warning councils that if things go wrong, cheques don’t arrive and families can’t afford to feed their children, they will turn to their local council for help.  Read more on the Unison website.