2013 06 Welfare Benefits

Monday 1 July 2013

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Church leaders ask for an apology from the government for misrepresenting benefit claimants

On 7 June 2013 an alliance of Churches representing Christians from England, Scotland, Wales and Ireland wrote to the Prime Minister asking for an apology on behalf of the Government for misrepresenting the poor. The letter highlights three recent examples of how senior members of the Government have given out “misleading and inaccurate information about people on benefits”:

  • Conservative Party chairman Grant Shapps stated that 878,300 people had dropped claims to incapacity benefit 'rather than completing a medical test';
  • Secretary of State for Work and Pensions Iain Duncan Smith was quoted as saying that 8,000 people who would have been affected by the benefit cap moved into jobs; and
  • Iain Duncan Smith stated that many people were applying for disability living allowance before the new personal independence payment was introduced in order to avoid the new medical test.

The church leaders call on the Prime Minister to ensure that "the record is put straight, and that statistics are no longer manipulated in a way which stigmatises the poorest in our society".

Bishops and Church leaders call on Government ministers to apologise is available from the website of the Methodist Church. Click here. For the text of the letter Click here.

Government says that it believes that housing benefit can continue to be paid to users of the majority of shelters, despite recent Upper Tribunal judgment

Following the Upper Tribunal judgment, in OR v Secretary of State for Work and Pensions & Isle of Angelsey C.C (HB) [2013] UKUT 65 (AAC), noted in the May 2013 update (click here), where Judge Wright held that a night shelter is not a dwelling for which housing benefit is payable, the DWP and the Department for Communities and Local Government (DCLG) have issued a note to local authorities to address 'misunderstandings' about the role of housing benefit in night shelters.

The DWP/DCLG note dated 19 June 2013 (click here) says that, in his decision the judge made it clear that this case was limited to its own particular facts and stated expressly that the case was not intended to prescribe how housing benefit claims for rough sleepers should be decided, and that -

"There has been no sudden change in the law:

  • Housing Benefit rules have not been changed over this basic principle of entitlement;
  • The Government have no plans to change the current rules for Housing Benefit and Universal Credit.

That means that just as it was never true that all users of night shelters were automatically entitled to Housing Benefit, neither is it true that all users of night shelters are now excluded.'"

For more information see “Nightshelter update: the law hasn’t changed” on the Homeless Link website. Click here.

'Households Below Average Income’ Survey

On 13 June 2013 the DWP produced The 'Households Below Average Income - An analysis of the income distribution 1994/1995 – 2011/2012' This sets out the number of children, working age adults and pensioners living in households where income was less than 60 per cent of median income, and where they are thus considered to have been living in poverty. The survey shows that relative child poverty remains unchanged at 2.3 million (17%) (Before Housing Costs) and 3.5 million (27%) (After Housing Costs).

'Households Below Average Income - An analysis of the income distribution 1994/1995 – 2011/2012' is available on the gov.uk website. Click here.

Commenting on the new figures, the Child Poverty Action Group (click here) highlights that absolute child poverty increased over the same period, and that 66 per cent of the children in poverty were in working households.

  • Absolute child poverty has increased from 2.3 million to 2.6 million (18%) (BHC), or 18% to 20%(AHC) and from 3.6 million to 3.8 million(AHC) or 27% to 29%.
  • There was an increase in the percentage of children living in poverty who live in working families. In 2011-12, 66% of poor children lived in working families. The year before, it was 60%.

CPAG also point out that in 2011-12 working families were targeted by nearly £1.5 billion of cuts to working tax credits. CPAG chief executive Alison Garnham said -

“Despite all the talk about ‘scroungers’ and generations of families never working, today’s poverty figures expose comprehensively the myth that the main cause of poverty is people choosing not to work. The truth is that for a growing number of families work isn’t working. The promise that work would be a route out of poverty has not been kept as wages stagnate and spending cuts have hurt low income working families.”

Risk that benefit sanctions unfairly penalise most vulnerable claimants, say MPs

The new Public Accounts Committee report published on 19 June 2013 - ''Department for Work and Pensions: Responding to change in jobcentres' - expresses concern that there is a risk that sanctions unfairly penalise the most vulnerable claimants:

“Enquiries about sanctions to the Citizens Advice rose by 45 per cent from October to December 2012 compared to the same period in 2011. Many enquiries were from vulnerable people, including those with learning difficulties, who found it difficult to understand their jobseeker obligations and why the sanctions had been imposed. Advisers do not always warn claimants that they may be sanctioned and the Department acknowledged that it can be difficult to impose sanctions consistently. The Department should give claimants written warning that they may be sanctioned and should monitor and publish the rate of sanctions by claimant group and jobcentre.” (from Conclusions and Recommendations).

The Public Accounts Committee report, Department for Work and Pensions: Responding to change in jobcentres, is available from the parliament website. Click here.

Blanket redesignations of properties for 'bedroom tax' purposes could lead to loss of housing benefit subsidy

Housing Benefit General Information Bulletin HB G6/2013 dated 21 June 2013 reproduces Lord Freud, the Minister for Welfare Reform’s a letter to local authority chief executives. In the letter Lord Freud says:

'In principle my Department has no objections to re-designating properties where there is good cause to do so, for example where a property is significantly adapted to cater for a disabled persons needs. However, we would expect the designation of a property to be consistent for both housing benefit and rent purposes. Blanket redesignations without a clear and justifiable reason, and without reductions in rent, are inappropriate and do not fall within the spirit of the policy.'

Lord Freud cautions:

'Where it is found that a local authority has re-designated properties without reasonable grounds and without reducing rents, my Department would consider either restricting or not paying their housing benefit subsidy.'

Housing Benefit General Information Bulletin HB G6/2013 is available on the DWP website Click here.

Rents in the private sector are not falling in London despite housing benefit reforms

According to a report published on 26 June 2013 by London Councils (a cross-party organisation representing all London boroughs) rents in the private sector are not falling in London despite housing benefit reforms capping the amount of local housing allowance (LHA). The report, ‘Tracking Welfare Reform: The Impact of Housing Benefit Reform in London’ also found that working households account for 90 per cent of the growth in LHA receipt in outer London between Jan 2012 and Jan 2013 and LHA households with dependent children are fastest growing family type in outer London.

To limit the pressure on the London boroughs, London Councils is calling for -

  • a welfare system that is tailored to London’s higher costs of living, particularly higher rents;
  • a London exemption from below inflation rises of LHA; and
  • a full assessment of the additional financial burdens on local authorities arising from welfare reform.

Tracking Welfare Reform: The Impact of Housing Benefit Reform in London is available from the London Councils' website. Click here.

Spending Round 2013

On 26 June, 2013Chancellor George Osborne delivered the government's Spending Round 2013. The Welfare benefit related measures include the following:

  • Introducing upfront work search - e.g. claimants will have a longer initial interview be required to write a CV at their first application and making weekly meetings to ‘sign on’ mandatory for about half of jobseekers (instead of the current two weekly meetings);
  • requiring all unemployed claimants to wait seven days before becoming eligible for financial support (thereby extending the current three-day waiting period for JSA);
  • introducing a longer initial interview and claimants will be required to write a CV at their first application for JSA;
  • nearly half of all jobseekers will be required to sign on every week (instead of the current two-weekly meetings);
  • requiring all claimants who are subject to conditionality to verify their claim each year;
  • requiring claimants to learn English – with sanctions for those who refuse;
  • requiring lone parents who are not working to prepare for work once their youngest child turns three;

In addition, a cap of £100bn will be introduced on the country’s total welfare spending that will be set each year at the Budget for four years and will apply from April 2015 (JSA and the state pension are to be excluded). Also, from 2015/2016, winter fuel payments will no longer be payable to individuals who live in countries with an average winter temperature higher than the warmest region of the UK.

The government's Spending Round 2013 is available from gov.uk. Click here.

Responses to the spending review by NGOs include:

Citizens Advice:

“Seven days is a long time to wait before being caught by the safety net. This could mean families who have fallen on hard times being unable to eat or heat their homes, relying even more on food banks which are already breaking under the strain of demand, or turning to payday lenders. The Chancellor must explain if people moving in and out of temporary or low paid work, or on zero-hours contracts, will be penalised if their work dries up and they face seven days with no income. The uncertainty this creates for people in precarious employment completely undermines the stability Universal Credit is intended to provide."

“Seven day delay on benefits could make it harder for families to cope” Click here.

Child Poverty Action Group:

“The decision to delay eligibility for Job Seekers Allowance to seven days is a ‘foodbanks first’ policy that will hurt families stuck in the low pay – no pay cycle, moving in and out of insecure, low-paid jobs, and will lengthen foodbank queues. We’re talking about parents doing the right thing but who have very little in the way of savings to tide them over if they lose their job. There should be no doubt this will leave more families and children cold and hungry and push more families towards doorstep lenders and foodbanks.”

“'Foodbanks first’ jobseekers cut and welfare cap will rack up economic costs of child poverty” Click here.

Gingerbread:

“We know that any delay in benefit payments is crippling for single parent families – with an additional seven day wait we fear many more will be forced to rely on food banks and payday loans to make up the new shortfall.”

“Spending Round: Welfare reforms ‘massive step back’ for single parents” Click here.

Crisis:

"Leslie Morphy, chief executive of Crisis, said: “Our clients already have to deal with long delays before benefit claims are processed, leaving them penniless in some cases. Making people who lose their job or are on low wages ineligible to claim for a week on top of this will needlessly leave more people utterly destitute. This arbitrary move will lead to debt, unheated rooms, unpaid rent, hunger and homelessness. A cruel and senseless measure and one we call on the government to reconsider.”

“Spending Review: Benefit delay will cause hunger and homelessness” Click here.

The Children's Society:

“Fairness and reform may be the watch words of this speech, but the country’s most disadvantaged children will continue to be hit hard by on-going cuts. The government’s own figures show that the poorest households will have lost nearly £1000 a year from their own pockets through cuts to public services and changes to tax and benefits.”

“Spending review: 'Children and families are set to pay the price'” Click here.

Direct payments to be triggered after two months’ rent arrears under universal credit

In a press release dated 27 June 2013 the Minster for Welfare Reform, Lord Freud announced that if rent arrears reach the equivalent of two months rent, a claimant in receipt of universal credit will have housing payments switched to the landlord, or managed payments. The press release also says that once the arrears have been cleared, it will work with landlords to return tenants to direct payments, and then in most cases - following the tenant being offered budgeting support - they will return to direct payments within six months.

The press release Freud: Universal Credit protection for tenants and landlords is available from the DWP website Click here.

Cases

The Upper Tribunal considered whether ‘attention’ provided at school for a child with dyslexia could count for disability living allowance purposes. A three-judge-panel was convened in KM v Secretary of State for Work and Pensions (DLA) [2013] UKUT 159 (AAC) (Mr Justice Charles, Lady Stacey and UT Judge Gamble), to resolve the conflicting law on the issue. The Upper Tribunal held that the attention needed by a dyslexic child could include the teaching of basic reading and writing skills at school, thereby endorsing the approach of Judge Jupp in CDLA/1983/2006. The Upper Tribunal said the approach taken by Judge May QC in CSDLA/427/2006 was wrong. Judge May QC had held that this amounted to the provision of education which was outside the scope of DLA as this would result in double provision from public funds. The Judges held that the fact that a claimant retained entitlement to DLA while in hospital and care homes, with payment only suspended in prescribed circumstances, established that Parliament did not intend that double provision from public funds was always precluded. There was no such statutory preclusion, and the fact that there was no requirement for DLA to be spent on the service provided and that many claimants without family or friends were more reliant on local authority services, demonstrated the difficulty of providing for such a preclusion. Whether medical treatment was ‘attention’ for DLA purposes depended on the purpose of the treatment (i.e. whether it was provided to remove or reduce a disability), rather than how it was funded.

The Judges declined to describe the circumstances in which an award should or should not be made in respect of a dyslexic child (which was ‘fact specific’), but commented on the approach which should be adopted by decision-makers in paragraphs [44]-[51]:

  • A person with dyslexia normally had a functional or mental disability or impairment.
  • A detailed fact finding exercise was required to establish the nature and degree of assistance the person needed from other people in connection with impaired bodily function(s), including why it is required, whether it is sufficiently intimate and personal to qualify as ‘attention’ for DLA purposes and whether it would be reasonably required ‘but for’ the functional disability.
  • It should then be determined whether the attention is required frequently enough and satisfies the comparison test for under 16s in section 72(1A).
  • This approach applied to all assistance relied on by the child, both at home and in school, and would help establish whether the attention required was outside the normal scope of education and pastoral care that would be normally given to a child of the same age without a functional disability.

Click here for judgment

In SM v Secretary of State for Work and Pensions (ESA) [2013] UKUT 102 (AAC), Judge Wikeley considered whether a person undergoing treatment for gambling addiction in residential accommodation is deemed to have limited capability for work. The claimant was living in a residential treatment centre for people with a gambling addiction for 4 months before moving to a ‘half-way house’ for 3 months to complete the programme. While he was in the treatment centre, he completed an ESA50 questionnaire and attended a medical in connection with his claim for employment and support allowance (ESA). Shortly after he moved into the half-way house, the DWP decided he was no longer entitled to ESA having scored nil points in the work capability assessment. The claimant’s appeal was dismissed by a tribunal. He appealed to the Upper Tribunal on the grounds that the tribunal had erred in law by failing to consider whether he satisfied regulation 25 of the Employment and Support Allowance Regulations 2008. Regulation 25(1) treats a person as having limited capability for work while he is undergoing medical or other treatment as an in-patient in a hospital or similar institution, or is recovering from that treatment.

The Upper Tribunal decided that the tribunal had erred in law by failing to properly consider regulation 25. It set aside the tribunal’s decision and remitted the appeal for rehearing by a new tribunal. The Upper Tribunal directed that the new tribunal would need to determine several questions in the light of further evidence:

1. Was the claimant undergoing ‘medical or other treatment’ in the residential treatment centre?

2. Was the claimant an ‘in-patient’ in the treatment centre?

3. Was the treatment centre a ‘hospital or similar institution’?

4. Was the claimant undergoing medical or other treatment as an in-patient in a hospital or similar institution in the half-way house? Similar considerations applied.

5. Was the claimant recovering from medical or other treatment in the half-way house?

Subsequent to the decision under appeal, regulation 25 has been amended to provide that a claimant attending a residential programme of rehabilitation for drug or alcohol addiction is treated as having limited capability for work. The Judge held that this was not relevant to the claimant’s appeal. Click here for judgment.

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