2014 07 Welfare Benefits

Friday 1 August 2014

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Number of children living in poverty

In 'Households Below Average Income - An analysis of the income distribution 1994/1995 – 2012/2013', (click here) published on 1 July 2014 the DWP sets out the number of children, working age adults and pensioners living in households considered to be living in poverty: The statistics show that: in 2012/2013:

  • 18 per cent of children (2.3m) were in households in the UK with incomes below 60 per cent of contemporary median net disposable household income before housing costs (BHC),
  • 27 per cent (3.6m) after housing costs (AHC);
  • 38 per cent of children in workless families were in relative low income BHC, compared to children in families where at least one adult is in work (13 per cent)
  • children from larger families with three or more children were more likely to be in relative low income BHC, than children from smaller families - 22 per cent compared to 16 per cent for one-child families.

Independent Review of the sanctions system

An independent review has found that improvements are needed to the sanctions system, particularly for vulnerable claimants. In the 'Independent review of the operation of Jobseeker’s Allowance sanctions validated by the Jobseekers Act 2013' (click here), published 22 July 2014 says the following issues are of particular concern and gives recommendations as to how these should be addressed, including -

  • letters about sanctions are “complex and difficult to understand”
  • many sanctions referrals from work programme providers are subsequently cancelled or judged to be non-adverse.
  • claimants either do not understand the ‘good reason' process or where sanctions decisions originate from and who to speak to about them This can result in claimants’ concerns and queries being passed “from pillar to post with little hope of resolution”.
  • sanctions not being notified – there were many examples where the first that claimants knew of adverse decisions was when they tried to get their benefit payment out of a cash point but could not.

The government published its response to the review the same day in which it accepts, either fully or in principle, all of the 17 recommendations (click here).

See also report in the Guardian 22 July 2014 Benefit sanctions hit most vulnerable people the hardest, report says: Claimants not told about hardship system and sanctions imposed when they were not at fault, DWP study finds (click here)

Bedroom tax research

In the report, 'Evaluation of Removal of the Spare Room Subsidy: Interim report', (click here) published 15 July 2014 today, sets out the findings of research carried out in the first eight months of bedroom tax implementation from 1 April 2013. The findings include:

  • a total of 4.5 per cent of affected claimants were reported by landlords to have downsized within the social sector within the first six months of implementation;
  • a key concern raised by landlords and local agencies is that disabled people in adapted homes have not always been awarded discretionary housing payments (DHPs) because disability benefits caused them to fail the means test for an award - a large majority of local authorities included disability benefits in the DHP means test;
  • landlords reported that, five months into the bedroom tax, 41 per cent of tenants have paid the full bedroom tax shortfall, 39 per cent have paid some and 20 per cent have paid none;
  • rent arrears had risen by 16 per cent (although it was not clear that this was attributable to the bedroom tax);
  • there was widespread concern that those who were paying were making cuts to other household essentials or incurring other debts in order to pay the rent - 57 per cent of claimants reported cutting back on what they deemed household essentials and 35 per cent on non-essentials in order to pay their shortfall; and
  • landlords state that they will eventually evict bedroom tax affected non-payers and many landlords expressed concern that collecting rent from people who can’t afford to pay whilst in their current circumstances is damaging relations between landlords and tenants.

Dramatic Lib Dem U-turn on bedroom tax

On 16 July 2014 the Liberal Demcrates anounced that in the light of the DWP findings that they have decided to review their position on the bedroom tax as the DWP research found the tax – brought in to cut benefits to households that have spare rooms – was not working. In particular, figures showed nearly 60% of the 550,000 tenants affected were in rent arrears and only one in 20 had been able to move to a smaller home.

Under the Lib Dem reforms, all disabled people would be permanently exempt from the tax. And as part of a complete overhaul, nobody would have their housing benefit cut unless they can be offered a suitable smaller home.

See ‘Bedroom tax must be axed says Nick Clegg in dramatic Lib Dem U-turn’: Mirror, 16 July 2014 (click here).
'Bedroom Tax': Lib Dems Withdraw Support’: Sky News 17 July 2014 (click here).

Cases

In R (Sumpter) v Secretary of State for Work and Pensions [2014] EWHC 2434 (Admin) (Hickinbottom J) the High Court has ruled that the government's consultation on the personal independence payment (PIP) mobility criteria was not unfair or unlawful. The claimant argued that the 2012 consultation process was unfair and thus unlawful because the PIP eligibility criteria did not include the 20m threshold, and that, by the time the government held a further consultation on the PIP mobility criteria in 2013, the Social Security (Personal Independence Payment) Regulations 2013 (the 2013 Regulations) - which contained the 20m threshold - were already in force. Hickinbottom J dismissed the challenge. While it was “unfortunate” that the 2013 consultation did not take place prior to the adoption of the Moving around criteria in the 2013 Regulations, the consultation process, looked at as a whole, was not unfair. The Claimant, and other interested parties, had a proper opportunity to make their comments on the 20m criterion in the 2013 Consultation, which the Secretary of State had considered with an open mind. Click here for the judgment.

In R (Winder & Ors) v Sandwell MBC [2014] EWHC 2617 (Admin), Hickinbottom J) it was argued that a policy by Sandwell Council that excluded anyone from claiming a reduction in their council tax unless they had lived continuously in the borough for at least two years regardless of their ability to pay was unlawful on a number of grounds including that the Council did not have the power to impose the residence requirement because section 13A(2)(b) of the Local Government Finance Act 2012 restricts the criteria by which classes for council tax reduction can be defined to financial, The Court agreed holding that theimposition of the residence requirement in both the 2013-14 and 2014-15 Council Tax Reduction Schemes was ultra vires and thus unlawful and issued a declaration to that effect. The Court also held that residency requirement was unlawful on a number of other grounds including that it is indirectly discriminatory against non-British people and women and that discrimination is unjustified, a failure to consult and in relation to section 149 of the Equality Act 2010 the Council failed to conduct any equality impact assessment on the requirement. Click here for the judgment.

In R (Reilly (No. 2) & Anor) v Secretary of State for Work and Pensions [2014] EWHC 2182 (Admin), (Lang J) the High Court ruled that retrospective legislation relating to the government's back-to-work scheme was 'incompatible' with the European Convention on Human Rights (ECHR) under Article 6. The Court concluded that there justification for the 2013 Act put forward by the Defendant did not justify the interference with the Art. 6(1) rights of the Claimants to a judicial determination of their claims. The Court said that its reasoning only applies to the claimants who had pursued claims in the courts or tribunals. Click here for the judgment.

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