Universal Credit expands to include some people with children...

...but don't get too excited.

Until now, only claimants without without children were able to claim  Universal Credit (and even then not in all places in the UK). This is no longer the case.

From 24th November, some claimants with children will be able to claim Universal Credit.

However, this will only apply to people who claim in the some districts of Chester, the Wirral, and Warrington. The actual postcode areas included* are:

• Chester: CH41, CH42, CH43, CH44, CH45, CH46, CH47, CH48, CH49, CH60, CH61, CH62 0 to CH62 9, and CH63.
• Warrington: WA1 and WA2; WA3 4 to WA3 7; WA4 and WA5; WA13 0; WA13 9.

Even in these areas, not all claimants with children or young people will be able to claim  Universal Credit. The main exceptions are claimants who are responsible for any children or young people get Disability Living Allowance or Personal Independence Payment, or are registered blind, or partially sighted.

All the other restrictions on who will be transferred from the 'old' to the UC systems still apply**.

For example, new claims for Universal Credit can only be made by people who are looking for work; in other words, people who would otherwise be claiming Jobseeker's Allowance. So single parents of children under 5 will still not be included (they are able to claim Income Support); nor will claimants who have a limited capability for work (they will still be claiming Employment and Support Allowance).

Another key exclusion is that people currently in receipt of tax credits will not be included. In practice, as far as I can see, this means that anyone who have had children for a while won't be affected, as - almost certainly - they will be getting Child Tax Credit already.

Putting all this together (and there are quite a few other restrictions I haven't touched on) the only people who will be moving onto the Universal Credit as a result of this new change are parents who have just had their first child, where one of the parents is just about to start looking for work. Who live in Chester, the Wirral, or Chester.

Having said all that, once a claimant is in the Universal Credit system they stay in the Universal Credit system, whatever their changes in circumstances.

In other Universal Credit news, the National Audit Office has published another critical report. The Independent notes that the NAO declined to agree with Iain Duncan Smith's assertion that the Universal Credit project is providing value for money.


"The National Audit Office has concluded that it is too early to determine if the Department for Work & Pensions will achieve value for money in its implementation of the Universal Credit programme.

The Department set out to transform the benefits system with Universal Credit and suffered early setbacks. Since the reset in early 2013, it has reduced the delivery risks by significantly extending its timetable for introducing Universal Credit and choosing a more expensive twin-track approach: the roll-out of its ‘live service’ (which uses pre-2013 IT assets), while at the same time developing its new ‘digital service’.

The DWP believes the additional costs of this approach are justified because it expects Universal Credit to achieve substantial benefits for society sooner and more safely. However, such potential benefits do not mean Universal Credit will be value for money regardless of how it is implemented and the cost of doing so."


The Independent also notes that the project "will not now be fully implemented by the end of 2019". As of a year ago, Duncan Smith was still insisting that the everything would be complete by 2017 (see, for example, my post from about a year ago: http://benefitsowl.blogspot.co.uk/2013/11/universal-credit-another-update.html).

In the meantime, I'll continue to do my best to keep you informed of progress.




*I've extracted this information (with some difficulty) from the following sources:
The Welfare Reform Act 2012 (Commencement No. 9, 11, 13 14, 16, 17 and 19 and Transitional and Transitory Provisions (Amendment)) Order 2014
The Welfare Reform Act 2012 (Commencement No. 17 and Transitional and Transitory Provisions) Order 2014
(Goodness me: if nothing else Universal Credit is providing plenty of employment for drafters of legislation. Universal Credit  has created an astonishing cobweb of legislative instruments.)

**For full details of these see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/377732/uc-families-questions-answers.pdf

The EU and David Cameron - some observations

On 20th October David Cameron was visiting the Ford motor plant in Dagenham, and said this:

'What we need in Britain is a renegotiation of our relationship with the EU and then a referendum where the British people decide do we stay in this reformed organisation or do we leave it.

'That’s what I will pursue, that’s what I will deliver, and at the heart of that renegotiation we need to address people’s concerns about immigration. I’m very clear about who the boss is, about who I answer to and it’s the British people. They want this issue fixed, they are not being unreasonable about it, and I will fix it.'
(Source: The Guardian: http://www.theguardian.com/world/2014/oct/20/eu-leaders-conservative-plan-free-movement-cap-migrants-barroso)

This statement, and others like it, left me angry, but also perplexed. On many of the matters raised, Cameron is either being disingenuous, or he is deluded.

So instead of a tiresome rant, I'm going to try to look, calmly, at the facts.

Firstly, an encouraging fact: at least for me. According to a recent IPSOS-MORI poll, support for staying in the EU is currently at its highest level since 1991: 56% of Britons are in favour of staying in the EU, against 36% who want to leave.

Of course, this doesn't ncessesarily mean that all of the 56% who want to stay are completely happy with the status quo, but it does suggest that the image presented by Cameron of an angry majority demanding radical reform is exaggerated.


Next, let's look at this issue of 'renegotiation of our relationship with the EU'.

For once, I agree with Nigel Farage:
'It is impossible to change the free movement of peoples within Europe without a fundamental treaty change with 27 other European countries. Nobody wants it, nobody is interested, and the prime minister knows it's not possible.'
(Source: The BBC: http://www.bbc.co.uk/news/uk-politics-29642604)

Freedom of movement for workers, and those seeking work, is a fundamental principle of the European Union. It was part of the original treaty of Rome that set up the (then) EEC in the first place, and can now be found as Article 45 of the Treaty on the Functioning of the European Union (TFEU). This is what it says:

1. Freedom of movement for workers shall be secured within the Union.
2. Such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment.

3. It shall entail the right, subject to limitations justified on grounds of public policy, public security or public health:
(a) to accept offers of employment actually made;
(b) to move freely within the territory of Member States for this purpose;
(c) to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action;
(d) to remain in the territory of a Member State after having been employed in that State, subject to conditions which shall be embodied in regulations to be drawn up by the Commission.

Note that this gives freedom of movement, not just to people who are actually working, but those who move to another member state in order to look for work.

The only room for manoeuvre available to the government, as far as I can see, is provided by the qualifier at the beginning of paragraph 3: 'subject to limitations justified on grounds of public policy, public security or public health'. However, it is not clear that this allows sweeping restrictions that act against the spirit of the Article as a whole. This position appears to be supported by the fact that in the resultant legislation, the government uses the phrase quoted in a way that is clearly intended to refer to individuals (see, for example, Regulation 21 in The Immigration (European Economic Area) Regulations 2006).

There is a strange doctrinal conflict in the opposition to the principle of free movement. The most strident arguments against the principle seem to come from the conservative end of the political spectrum. As a rough generalisation, right wing thinkers tend to favour a free market, 'laissez faire', economic system. It is arguable that the EU is a textbook example of a this philosophy in action. And yet the proponents of this approach don't seem to like it so much when it doesn't work the way they want it to. If the free market is so great, why is it not appropriate to apply it to individuals looking for work?



However, whatever position you adopt on the matter, it's undeniable that there is net migration from other EU countries to the UK. But even here, the facts aren't quite how they are portrayed.

Here's a typical recent headline:
'One million MORE migrants will flood Britain before EU vote, warns Farage'
(Source: The Express: http://www.express.co.uk/news/uk/524125/EXCLUSIVE-One-million-MORE-migrants-will-flood-Britain-before-EU-vote-warns-Farage)

The argument seems plausible. The report states that net migration is currently 243,000 people per year. The referendum is due in three years' time. It follows from this that at that point the number of additional migrants will reach... 729,000. OK, that's not a million, but we won't quibble about the odd 271,000.

The figure quoted by Farage is correct, and comes from the Migration Statistics Quarterly Report, August 2014, from the Office of National Statistics. However it needs a bit of unpicking. Firstly, the figure quoted is for all migration, not just that from the EU, which accounts for 131,000 of the total.

Secondly, we need to ask: is the figure of 131,000 typical for recent years? Is it part of a trend? And if it is, where is the trend going? These are tricky questions to answer, partly because the figures from the ONS have a high (but specified) degree of uncertainty*. Here's a chart showing net EU migration over the last ten years.

(The error bars are based on the ONS data: according to their analysis, there is a 95% probability that the actual figure lies within the range.)

To be fair to the Euro-sceptics, and even allowing for the uncertainty in the data values, there is an apparent upwards trend over the last couple of years. The last three data points suggest that this increase has stabilised, but at around 130,000. The trend doesn't coincide with any of the big changes in access to the UK market: The last major change before then was April 2011, when the A8 countries (The Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia) were given full access to the UK labour market.

On the other hand, a Europhile might argue that it's not possible to extrapolate a clear trend from this data, and would also note that the mean migration rate over both the first five years and the second five years is almost identical, at about 87,000.

In fact you could make either argument from the figures: the truth is we don't know. But I'd be reluctant to embark on major treaty reform on the basis on these figures.

It's also important to look at the bigger picture, that of the overall population growth of the UK. Again, according to the ONS (this time the Annual Mid-year Population Estimates, 2013, published in June 2014), the UK population reached 64.1 million by mid-2013, an increase of 401,000 since mid-2012.

Based on the mean EU migration rate quoted above, it follows that entire net EU migration over the last ten years represents just 1.4% of the current population.

But let's look breakdown the population growth into categories.

The majority of the increase is accounted for by natural change (births minus deaths). EU migration accounts for just over a quarter of the total. It's worth noting, also, that half of the EU migration is accounted for by citizens of the pre-enlargement EU states.

So, yes, EU migration does contribute to the pressure on our housing stock, transport infrastructure, and other resources, but not as much we contribute ourselves.

Conclusions

• Firstly, the majority of British citizens appear to want to stay in the EU.
• Secondly, the concept of renegotiating our relationship with the EU so as to restrict access to the UK for EU nationals doesn't seem to have any connection with reality.
• Thirdly, although there is net UK migration into the UK, the actual figures are complex, open to misreading, and provisional.
• Fourthly, EU migration accounts for only about a quarter of recent population growth (assuming the figures for year ending June 2013 are typical. 

I have not considered two other issues at all. One is the reality of the restrictions currently faced by EU migrants in the UK: if you want more information about this, have a look at my website - http://www.benefitsowl.info/abroad-eea-cit.html

The other is a question that is rarely considered at all: why is it a given that net migration from the EU is necessarily bad?

I'll leave that hanging in the air.


*The raw migration data (which I've used for this post) is available from a link within the Migration Report, and also here: http://www.ons.gov.uk/ons/rel/migration1/migration-statistics-quarterly-report/august-2014/rft-table-1---provisional-estimates.xls

Universal Credit : list of roll-out dates

Universal Credit is rolling out a bit further this autumn. The current expansion seems to be filling in the gaps in the previous roll-outs in the northwest, and so mainly affects the big cities and towns. The postcode areas covered are therefore:

• BB (Blackburn)
• BL (Bolton)
• CA (Carlisle)
• CH (Chester)
• CW (Crewe)
• FY (Blackpool)
• L (Liverpool)
• LA (Lancaster)
• M (Manchester)
• OL (Oldham)
• PR (Preston)
• SK (Stockport)
• WA (Warrington)
• WN (Wigan)

Note that, at the moment, claims are only being accepted from single people and couples without children who would otherwise be claiming Jobseeker's Allowance - those unable to work will still be claiming Employment and Support Allowance, and carers will still be claiming Income Support. 

The list of which postcode areas are affected and when is provided by a DWP memo: 

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/351530/adm16-14.pdf

The memo (and the underlying legislation) group the data by dates, so it is quite hard to see clearly how things develop in any one city or town. However, you don't need to worry about this, as I've re-arranged the data for you here.

Note that 'BB9 7' means (for example) any postcode in the format BB9 7xx, such as BB9 7AA.
If the postcode you are interested in doesn't feature here, the likelihood is that it has already been included (for example, L20 postcodes already operate Universal Credit, as the local authority involved is Sefton, not Liverpool.

The latest threat to the Bedroom Tax?

The bedroom tax has been a frequent visitor to this blog; unsurprisingly, given the impact it has had on many benefit claimants. In my last post I looked at the government's own report on it, which found, amongst other things, that only 41% of claimants had paid the full shortfall, and that only 4.5% of tenants have actually downsized as a result of the shortfall.

However there are signs that the days of the bedroom tax, as we currently know it, are numbered. The most recent development comes in the form of a private member's bill that has been brought to Parliament. The bill's sponsor is Liberal Democrat MP Andrew George: at its second reading on 5th September 2014 MPs voted 306 to 231 in favour, and it has now awaiting scrutiny by the Public Bill Committee.

(If you want to see who voted in favour of the bill, and who didn't, check out http://www.theyworkforyou.com/debate/?id=2014-09-05a.603.0)

What is the bill intended to do?

(If you want to check out the details of the bill yourself, you can find it here: 

http://www.publications.parliament.uk/pa/bills/cbill/2014-2015/0013/cbill_2014-20150013_en_2.htm)

Let's be clear: the bill is not designed to end the bedroom tax (the 'housing benefit size criteria restrictions' to give it its official name).  However it is intended to address some of the most problematic issues.

Remember that the main effect of the bedroom tax is to reduce the maximum Housing Benefit available by 14% if a claimant has one 'too many' bedrooms, or by 25% if they have more than one. For more details see my website: http://www.benefitsowl.info/bedroom%20tax.html.

The bill addresses situations where the claimant, their partner, or a close relative is disabled. Under the current rules many people in this situation will be expected to share a room: couples, for example, are normally only entitled to one room, and some children will be expected to share. At the moment, therefore, people in this situation will have to chose between sharing where it is not appropriate, and having a 14% reduction in their maximum Housing Benefit.

If the bill were accepted there would be no reduction for a claimant in this situation, provided the disabled person was getting any component or any rate of Personal Independence Payment or Disability Living Allowance, and provided that the local authority was satisfied that it was reasonable for the disabled person to need a separate room.

Note that, in the scenario described above, a claimant would still be subject to reduction in their maximum Housing Benefit if there were additional bedrooms not needed to accommodate the disabled person. For example, if a family is currently treated as having two spare bedrooms, even though a disabled person is actually using one of them, there would still be a reduction, although it would now be 14% rather than 25%.

However, there is another provision in the bill that specifies that there should be no reduction at all, irrespective of how many bedrooms there are, if the home has been adapted to meet a disability need of the claimant, their partner, or a close relative, provided the cost of the adaptation exceeds a certain amount (the last proviso presumably existing to prevent a person making minimal changes to a property, that could easily be replicated elsewhere, in order to benefit from the rule).

The bill also addresses another very common scenario: what if there is no alternative accommodation available? Currently, if a claimant is 'under-occupying', and is willing to move to a smaller home, they are still subject to the bedroom tax even if they can find nowhere smaller to move to.

If the bill were accepted, no reduction would be made if the claimant's landlord and the local authority are not able to make a 'reasonable offer of alternative accommodation'.

Finally, the bill does something that will not affect individual claimants, but may assist tenants in the future. It proposes a review of the availability affordable and 'intermediate' housing, to assess: the extent of the need; what progress has been made to meet the need; and the availability of resources to meet the need. It also empowers the government to contribute to any solution. I doubt that this proposal will find its way into any final bill, but would be happy to be proved wrong: it would be nice to have policy that was evidence-based rather than inspired by dogma or political expediency. 

How does the bill compare to repealing the bedroom tax legislation?

For people who need an extra bedroom because of disability, and for people who would downsize if they could, the bill would be great news if it became law. However the bill does not help people who maintain that they need an extra room for other reasons (including disabled people who use the 'spare' room to store disability-related items). It also does not directly help people who are affected by the bedroom tax now, but need to stay in the same property because their children are getting older and so will need additional bedrooms soon, although it is possible that claimants in that position might be able to argue that alternative accommodation is not 'reasonable'. 

The bill also does not resolve the thorny question of what constitutes a bedroom in this context. The legislation that created the bedroom tax (the Housing Benefit (Amendment) Regulations 2012) does not define what a bedroom is, which has caused problems for claimants and for tribunals alike. In a previous post I noted a tribunal judge who used overcrowding regulations as a guide, but as this was a 1st Tier tribunal his findings do not set a precedent. If the bill became law this confusion would still exist.

On the other hand, the bill may satisfy those MPs who are unhappy about the affects of the bedroom tax on disabled constituents and those for whom alternative accommodation is not available, but nonetheless sympathise with the government's stated aim of increasing availability of homes for larger families.

If Labour win an outright majority at the next general election, they have undertaken to abolish the bedroom tax. The most recent statement I have from the Liberal Democrats is a commitment to reform the legislation: these proposals look very similar to the contents of the bill. And the Conservative party want to keep the bedroom tax (or, as they call it, the spare room subsidy) unchanged (for details of all these see my last post).


When I have more news about the bill, I'll let you know.

Shock news: Bedroom Tax isn't working(!)

I'm signed up with gov.uk to receive alerts of any press releases relating to social security matters: when they publish reports they are normally keen to let people know straight away. Oddly enough, though, they made no mention of a report they published on 15th July. The report's name is 'Evaluation of Removal of the Spare Room Subsidy: Interim report'. The 'Spare room subsidy' is, of course, what other people call the 'Bedroom Tax'.

You can see the report yourself here: https://www.gov.uk/government/publications/local-housing-allowance-monitoring-the-impact-of-changes

The report is not an opinion document: it just gathers facts and presents them. The facts, though, are damning. It's not surprising that the government wasn't very happy about it.

(Remember, first, that what the bedroom tax does is this: in effect, it reduces the amount that counts as rent for Housing Benefit purposes by 14% if you have a 'spare' bedroom, or by 25% if you have two or more 'spare' bedrooms. If you want more details, check out my information on it at http://www.benefitsowl.info/bedroom%20tax.html.)

The report found that five months into the scheme, only 41% of tenants had paid the full shortfall: 39% had paid some, and 20% had paid nothing at all towards the bedroom tax.

For those who did manage to pay some or all of the increase, how did they manage this?

57% of claimants reported cutting back on housing essentials;

26% said that they had had to borrow money (mostly from family and friends, but also using credit cards and payday loans);

10% had used savings;

9% had been given money from family members;

Let's just stop there for a moment, and note, firstly, that you're in trouble if you've got no family members with spare cash, and, secondly, that those with savings will soon not have any.

Moving on again, what about taking the government's suggested route, downsizing to a suitable property. Unfortunately, the report records that only 4.5% of affected tenants have done this. But maybe this is just because people are reluctant to move? Well, no. It turns out that in local authority areas where only a few people are affected by the bedroom tax, many more (up to 16%) are able to downsize.  In other words, as the report puts it, 'this suggests that landlords with the highest proportion of affected tenants will have more difficulties in meeting the demand for downsizing'.

Furthermore, it is reported that although 19% of affected tenants had registered for downsizing, social landlords said that 'they had not yet been able to accommodate most of those who wanted to move to a smaller home'.

Unsurprisingly (at least to me) only 1.4% had moved to the private rental sector; where the discrepancy between the rent charged by the landlord and that met by Housing Benefit tends to be even higher. Don't forget, for example, that single adults under 35 can only get enough Housing Benefit to cover living in a room in a shared house.

Apart from there being nowhere to move to (as we've now established), why didn't people want to move? Many of the reasons are easy to imagine, but here's one that hadn't occurred to me (nor, I imagine, to the government): 'knowing that they would soon cease to be affected by the [bedroom tax] - for instance because a child would turn ten or 16 and would require their own room'. Yes. It makes lots of sense to move to a smaller property when in a year's time you'll be entitled to the home you've just left...

The report also looked at of Discretionary Housing Payments (DHPs), the extra housing benefit available for claimants with additional needs, who ask for it, and whose requests are granted by their local authorities. A key concern raised was that some claimants were refused because disability benefits they were getting  (i.e. Disability Living Allowance, Personal Independence Payment, etc) were treated as extra income that reduced their need for help. A further concern was that more than half (56%) of the claimants surveyed who had not applied for a DHP were unaware of them.

Finally, what about the main declared purpose of the bedroom tax (freeing up properties for large families who needed them)? 41% of social landlords surveyed said that they were having difficulty filling their larger properties. Landlords and local authorities also reported that waiting times for smaller properties had increased: don't forget that many of the people on these waiting lists will be there precisely because they are trying to do what the government wants them to do, downsize, and therefore will be forced to pay the bedroom tax for longer.

What do the main political parties want to do about the bedroom tax?

The Conservatives want to keep it, obviously, although even some of their number are expressing concerns. Somewhat startlingly (to me, anyway), Norman Tebbit has come out against it. The Huffington Post, for example, reports his comments: 'I worry about what Labour chooses to call the bedroom tax. Because so often what is a spare room is in fact a vital part of the looking after an elderly person. It enables their relatives to come, it enables carers to be there...I think we introduced that rather without thinking it through very well, and I think that's costing us.'

Labour want to scrap the tax: in fact they have an online petition about it. It's only fair to point out, though, that the previous labour government brought in the first bedroom tax, by limiting Housing Benefit to claimants renting in the private sector according to how many bedrooms they needed (amongst other factors). It was called the 'local housing allowance', was brought in in 2008, and is still in force. Furthermore, Hansard clearly indicates that it was the Labour government's intention to extend something similar to the social rented sector.

The Liberal Democrats have recently stated that they are committed to reform the bedroom tax. They say that they plans 'will see those already in the social rented sector only lose their benefit if they are offered a suitable smaller home and turn it down' and 'would also permanently exempt disabled adults'.  This isn't in line with their previous statements. The Huffington Post eloquently illustrates six opportunities when Nick Clegg could have opposed the bedroom tax but, instead, defended it. The Lib Dems don't exactly have an perfect record of keeping pre-election promises. 

Take your pick...




Universal Credit expands in the north-west

On 29th April the government announced that 'the expansion of the full Universal Credit benefit to the rest of the north west of England will start in June': 
https://www.gov.uk/government/news/universal-credit-first-year-of-welfare-transformation-and-north-west-next-steps

But what does that really mean? and who will it affect?

(For detailed information about what Universal Credit is and how it works, check out http://www.benefitsowl.info/universal%20credit.html.)

What is the situation now?

At the moment, in the north-west of England, Universal Credit only affects people who live in the following local authority areas: Wigan, Warrington, Oldham, and Tameside. These are known as 'pathfinder areas'. 

However, even in these areas, only a fairly small subset of potential claimants need to worry about Universal Credit. Universal Credit is currently only available to single claimants who are between 18 and 60½, are not working, are looking for work, and are not getting any other benefits or tax credits when they make their claim. 


What is happening from June?

From June this year Universal Credit will expand to cover claimants live in the areas covered by:

• Bolton Borough Council
• Bury Borough Council
• Cheshire East Council
• Cheshire West and Chester Council
• Knowsley Borough Council
• Preston City Council
• Salford City Council
• Sefton Borough Council
• South Ribble Borough Council
• St Helens Borough Council
• Trafford Borough Council
• Wirral Borough Council

(You might note that Manchester and Liverpool are missing from this list.)


These new areas will only be applying Universal Credit to the same group of claimants as in the earlier pathfinder areas, i.e. single claimants who are between 18 and 60½, are not working, are looking for work, and are not getting any other benefits or tax credits when they make their claim. In effect, therefore, the roll out will initially only have an impact on single jobseekers who are not getting any other benefits at the moment.

For people living in the existing pathfinder areas - Wigan, Warrington, Oldham, and Tameside - the net will gradually be expanded to include some couples making new claims, according to the government's press release.

To get an up-to-date list of areas that are included check out https://www.gov.uk/universal-credit/eligibility

When you say 'from June'...

Well...

There are two important phrases in the government's press release: 

• 'from June more jobcentres across the north west of England will gradually come online each week until the whole region is covered'
• 'We are currently in discussion with the following 12 local authorities to be at the forefront of this next stage of expansion'

In other words this isn't going to happen overnight. But claimants in these areas still need to be ready for when it does.

I've commented on problems with the roll-out of Universal Credit in previous posts so I won't go on about them here. However I will mention that the most recent report [1] on the matter from Parliament's Work and Pensions Committee notes that as of December 2013 just 4,280 were claiming Universal Credit (paragraph 24) of a total estimated target of 7.7 million households (summary).

Discussion with local authorities is necessary, in particular, because Universal Credit includes payments for rent and so replaces Housing Benefit - a local authority administered benefit - for the claimants affected. Council Tax Support will continue to be administered by local authorities. So extensive liaison between the DWP and each local authority will plainly be necessary.

How will Universal Credit affect claimants?

It's crucial to understand that the introduction of Universal Credit brings with it two, very distinct, kinds of changes: 

1. Changes relating to what Universal Credit is;
2. Changes relating to how Universal Credit is administered.

The first kind of change is largely positive, or at least neutral, in terms of the effect upon claimants (at least in my opinion). For example:

• Claimants with no other income will receive just the same amount of money as they do now;
• Claimants who do have income other than earnings, or who have capital, will find that it is treated in the same way as it was before; 
• Claimants who have earned income will find that they will be able to keep much more of their earnings than they could with the 'old' means-tested benefits;
• There will no longer be a cut-off for claimants who work 16 hours or more hours per week.

The second kind of change, on the other hand, is likely to cause a lot of problems for a lot of people. The key changes are these:

• Most claimants will have to claim the benefit, and report changes, online;
• Claimants will be paid every calendar month, rather than every two weeks as at present;
• These monthly payments will include any help with rent, so claimants will normally be responsible for making sure that the right amount of money is passed onto their landlords at the right time..

I don't think you need me to spell out the likely consequences of this disturbing cocktail.

All this assumes, of course, that the DWP IT systems underlying Universal Credit work properly. The Work and Pensions Committee appears to have serious concerns about this (see their report, paras 34ff).

Will this be the end of Jobseeker's Allowance (JSA) and Employment and Support Allowance (ESA)?

Yes and no.

income based JSA and income based ESA will be abolished: they, like Housing Benefit, will be replaced by Universal Credit.

However contribution based JSA and contribution based ESA will remain (they will be renamed - initially - 'new style' JSA and ESA, and eventually just JSA and ESA). Therefore anyone who thinks that they may be entitled to contribution based JSA and is in a Universal Credit area should claim both. When I have a better idea of how this works in practice I will let you know.

In the meantime, if you want to know more about Universal Credit have a look at my website at http://www.benefitsowl.info/universal%20credit.html

Main sources and further reading

[1] Work and Pensions Committee - Fifth Report: Universal Credit implementation: monitoring DWP's performance in 2012-13 http://www.publications.parliament.uk/pa/cm201314/cmselect/cmworpen/1209/120902.htm

The Universal Credit (Transitional Provisions) Regulations 2013 No. 386 
http://www.dwp.gov.uk/docs/a14-6501.pdf

Advice for decision making: Chapter M1: Pathfinder Group - Claims for UC https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/288079/admm1.pdf 

The Universal Credit Regulations 2013 No. 376 http://www.dwp.gov.uk/docs/a14-6001.pdf

New requirements for jobseekers

This is a quick post to just flag up the changes: I'll comment on them properly soon.

Changes have been brought in today that affect two different groups of Jobseeker's Allowance claimants: 

• 'pre-work programme' claimants: i.e. relatively new claimants, who have not yet attended a work programme;
• people in 'long-term unemployment': in practice, those who have been unemployed for more than three years.

'Pre-work programme' claimants

(Source: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/302526/touchbase-apr14.pdf)

• Day one conditionality - this will require new claimants to show that they are looking for work from day one. In practice this means that they will need to set up an e-mail address, prepare a CV, and register on the Jobsmatch website. Although the government states that Jobseekers who do not claim online will be helped to do these things by a 'work coach', it is not clear (at least to me) how this will be help to claimants who are not IT literate. This requirement will be rolled out gradually between now and October 2014.
• Mandatory English language requirement - claimants (at first in England only) whose English skills are assessed as being below the required standard will be required to attend training to improve their skills. On the face of it this seems sensible, but only if the resources are available to enable this training to be provided properly.
• Quarterly work search interviews.
• Weekly work search reviews - These will be phased in for 50% of claimants between now and October 2014.

People who have been unemployed for more than three years

(Source: https://www.gov.uk/government/news/help-to-work-nationwide-drive-to-help-the-long-term-unemployed-into-work)

Claimants who are not in work after three years will be required to do one of the following:

• Attend the Jobcentre every day (normally at their own expense).
• Attend a 'community work placement' - i.e. work as a non-voluntary volunteer (the examples given by the government are 'gardening projects, running community cafes or even restoring historical sites and war memorials') - for 30 hours per week for 6 months (plus 4 hours per week supported jobsearching).
• Intensive Jobcentre support - for claimants with with 'multiple or complex barriers to work'.

Failure to comply with this will result in an initial sanction of 4 weeks, with a further sanction of 13 weeks for a second failure to comply.

I've already my opinions clear with regard to daily signing and community work placements in a previous post: http://benefitsowl.blogspot.co.uk/2013/10/conservative-party-conference.html

Unfortunately for the  government, many of the charities who might be expected to provide the community work have boycotted it - http://keepvolunteeringvoluntary.net/ . The Independent reports:

'The charities have noted that the maximum community service order that someone might receive if they were found guilty of drink-driving or assault is 300 hours, but claimants on six-month workfare schemes will have to work without pay for more than double this time.'

(http://www.independent.co.uk/news/uk/politics/jobless-mustsign-on-every-day-government-to-dock-money-from-longterm-unemployed-if-they-do-not-comply-9294586.html)

More on this soon...

 

EEA nationals - the changes summarised

You would have to be living in a closed monastic order not to aware of the furore about European migrants over the last few months, apparently precipitated by the removal of restrictions for Bulgarian and Romanian nationals on 1st January 2014. Whether the government was responding to public concern - as expressed in some parts of the media - or opinion was being shaped by a government agenda is not clear, at least to me, but what we can be certain of is that a lot of legal changes have been applied to European citizens in the UK.

I will try and hide my own opinions about all this for this post. My aim, instead, is to summarise the main details of all the different changes, and where all this leaves European Economic Area (EEA) migrants in the UK today when it comes to claiming social security benefits.

For a more detailed, and possibly more accessible, description, please read my web site pages on this subject, which have been subject to considerable reworking over the last few weeks:

http://www.benefitsowl.info/abroad-eea-cit.html for general information about the rules for EEA citizens in the UK

http://www.benefitsowl.info/abroad-eea-history.html for a brief history lesson covering developments for EEA citizens in the UK up to the present.

The changes I will be looking at are:

• Removal of restrictions for Bulgarian and Romanian nationals
• Three months residence requirement for Jobseeker's Allowance claimants
• Tougher rules for Jobseeker's Allowance claimants for EEA nationals
• Minimum earning threshold for EEA migrants
• Restrictions to Housing Benefit for some Jobseeker's Allowance claimants

First, though, in case you haven't got the time to check out those links, there are two key concepts you need to be aware of:

• 'Habitual residence': in essence, if a claimant come to the UK to live, they are generally barred from claiming means-tested benefits until the state is satisfied that they are really intending to stay here, and not just visit. This applies to UK citizens who have lived abroad as well as to EEA nationals. When a person has become habitually resident is decided as a case by case basis, but it normally takes between about one and three months.
• 'Right to reside': Since 2004, the UK government will not regard a person as being habitually resident unless they have a right to reside here. This lets British citizens off the hook, but is a real problem for people from the EEA. The rules setting out who has the right to reside are extraordinarily complex: however it's safe to say that, in general, workers do have this right, as freedom of movement for workers is enshrined in the original treaty setting up the European Union.

Note: in the rest of this post, when I write Jobseeker's Allowance you should take this to mean income based Jobseeker's Allowance unless otherwise stated. There are no restrictions on claiming contribution based Jobseeker's Allowance, but in general most recent migrants are not able to get this.

Removal of restrictions for Bulgarian and Romanian nationals

When these two countries joined the European Union on 1st January 2007 the UK got a special concession, or derogation, which allowed it to impose extra restrictions on people from these countries. The key right of freedom of movement for workers was, in effect, watered down. Romanians and Bulgarians could come here to work, but only in certain types of work and only in a strictly regulated way. They also were not allowed, in effect, to claim Jobseeker's Allowance and any other benefits that result from that (like Housing Benefit), until they had worked for at least a year (they were allowed to claim appropriate benefits if they were working, such as Child Benefit, Child Tax Credit, and Housing Benefit). 

EU law does not allow this kind of derogation to continue for more than 7 years, so the British government had no choice but to end the restrictions[1]. They therefore now have the same rights as citizens of other EEA member states.

From 1st January, therefore, Bulgarians and Romanians can take up any employment that's available, and, if they get a job but later lose it, they will be able to claim Jobseeker's Allowance. 

Had there been no other legal changes, they would also be able to claim Jobseeker's Allowance before they found their first job, but this is now not possible for EEA migrants anyway, as you will see.

Three months residence requirement for Jobseeker's Allowance claimants

From 1st January 2014 anyone claiming Jobseeker's Allowance will not be treated as habitually resident, and therefore unable to get Jobseeker's Allowance, until they have been in the UK for three months[2].

Although this change was presumably brought in as a reaction to the feared 'influx' of Bulgarian and Romanian jobseekers, it applies to all new entrants, including UK citizens who have been abroad for a while.

In practice, the effect of this change is likely to be marginal, as even under the previous rules it was not unusual to have to wait for three months to satisfy the habitual residence test anyway. 

Tougher rules for Jobseeker's Allowance claimants for EEA nationals

This is where is gets a bit tricky; partly because the underlying legislation is extraordinarily labyrinthine, and partly because (paradoxically) some of the key terms are very poorly defined. 

The government describes the changes as follows (from its press release):


'After 3 months [see above], migrants will also have to take a stronger, more robust test if they want to claim income-based JSA.

In order to pass the improved Habitual Residence Test migrants will have to answer more individually tailored questions, provide more detailed answers, and submit more evidence before they will be allowed to make a claim. For the first time, migrants will be asked about what efforts they have made to find work before coming to the UK and whether their English language skills will be a barrier to them finding employment.

If they pass the Habitual Residence Test, EEA jobseekers will then only be able to claim JSA for 6 months. After 6 months, only those who have compelling evidence that they have a genuine chance of finding work will be able to continue claiming.'


Frustratingly, none of the following aspects of this are laid out in the legislation[1]:

• details of the 'stronger, more robust,' test;
• what 'evidence' will be required;
• what evidence will be required to meet the threshold of 'compelling'. 

There are also a number of issues related to the distinction between people who are defined as jobseekers and those defined as workers who are 'involuntarily unemployed' (but are also jobseekers), and how people move between these definitions. This feeds into the new rules about Housing Benefit (see below).

Minimum earning threshold for EEA migrants

As stated in a previous post (http://benefitsowl.blogspot.co.uk/2014/02/a-busy-week-for-benefit-watchers-part-2.html) I actually disagree with some other commentators in that I think this is probably a change for the better.  The change may be a useful clarification, and doesn't, as the change is worded, restrict anyone's rights compared to what they were before. 


The clarification has not come in the form of any new law, but as a memo added to the Decision Makers Guide (Memo DMG 1/14). It uses something called the 'minimum earnings threshold', which is, broadly speaking, the amount you need to earn before you have to pay class one National Insurance Contributions (£153 for 2014/15). The guide says that if an employee or a self-employed person has been earning at least this for the three months before a claim for benefit is made they will 'automatically'  be considered a worker. If this test is not satisfied, the decision maker 'will need to examine each case as a whole, taking account of all circumstances, to determine whether the EEA national’s activity was genuine and effective'. This second bit is what the DWP was supposed to be doing with all EEA worker claimants anyway, before this memo.

So for people who have been earning above the minimum earnings threshold they can be certain that they will be treated as workers. Those who are earnings less will continue to be assessed as they were before.

Note that this guidance is unlikely to be applicable to people claiming Jobseeker's Allowance, Income Support, or Employment and Support Allowance, as they won't normally fit the rules for these benefits anyway, but will be relevant to claimants of Housing Benefit and Universal Credit.


Restrictions to Housing Benefit for some Jobseeker's Allowance claimants

This change comes in later than the others, on 1st April 2014.

The main effect of the new law is that although new EEA arrivals in the UK may be able to get Jobseeker's Allowance after three months, but even then they will not normally be entitled to Housing Benefit. On the other hand, an EEA resident in the UK who has been working, and then loses their job, will be able to get Housing Benefit with their new claim for Jobseeker's Allowance. 

That might seem reasonable enough (or perhaps not). But there is another problem, related to my final comments in the section on 'tougher rules...' above. 

The way in which the law preferentially targets newer arrivals is by removing access to Housing Benefit from 'plain' jobseekers, as opposed to workers who have become unemployed.  

This needs some explanation. The treaty of Rome, which created the then European Community, gave freedom of movement to workers. It also included the freedom to move between European countries to seek work. However subsequent European directives have made it clear that these two freedoms are not equal. The effect is that EU countries, such as the UK, have more obligations to workers than to work seekers. 

Furthermore, the EU requires that workers do not lose their 'worker' status for at least six months if they lose a job, provided that they register as a jobseeker. 

The upshot of all this is that people who claim Jobseeker's Allowance and want Housing Benefit will be able to get it if they are regarded as worker, and won't if they aren't.

But here's the thing. Ex-working jobseekers will not be able to have the 'worker' status indefinitely. In accordance with EU law anyone who was employed for less than a year does not have to be treated as worker after they have been off work for six months. They will then become an 'ordinary' jobseeker, and therefore lose the right to Housing Benefit. 

And even people who have worked for more than a year in the UK risk losing their right to Housing Benefit after six months unless they can 'provide compelling evidence that [they are] continuing to seek employment and [have] a genuine chance of being engaged'.

So we could be seeing people who have been in the UK a while, have taken up tenancies, and will lose their ability to get Housing Benefit if they are unemployed for too long.

I note that the legislation creating this restriction was neither referred to Parliament's Social Security Advisory Committee (SSAC), nor were the proposals sent out to consultation, as 'it appears to [the Secretary of State] that by reason of the urgency of the matter it is inexpedient to do so'. This is disturbing.

Conclusion

You might wonder why most of these changes seem to be targeted as jobseekers (and workers) and nobody else. The reason is simple. Most EEA migrants to the UK who are not in the labour market are not entitled to any income-based benefits already.

People in the labour market will need to get used to a regime where no benefits are available until they get work, and where they will not be able to rely on retaining benefits for more than six months of unemployment.

Having said that, some of the changes (the initial three month prohibition on claiming Jobseeker's Allowance, for example) are not as significant as they appear: it is hard to escape the feeling that they were introduced to give an impression of action.

Nevertheless the changes do matter, and people will undoubtedly experience hardship and anxiety because of them.

[1]  The Immigration (EEA)(Amendment)(No.2) Regulations 2013
[2] The Jobseeker's Allowance (Habitual Residence) Amendment Regulations 2013
[3] The Housing Benefit (Habitual Residence) Amendment Regulations 2014