Friday 27 November 2015

Chancellor's Autumn Statement - first the good news...

Let's look at the most talked about issue first: tax credits

Newspaper headlines excitedly reported the chancellor's annoucement in words like these: 'Tax credit cuts SCRAPPED in victory for working families' (, for example). Unfortunately the news, while good, is not that good (in fairness, later media consideration was more nuanced).

So what proposals has the chancellor reversed?

In my post of 13th July, I set out the proposed changes to tax credits as follows:

Changes to tax credits for new and current claimants

  • The income taper will be increased from 41% to 48% of gross income: in other words, for every pound over the threshold figure the claimant's tax credits will be reduced by 48p, rather than 41p (before 2011-12 it was 39%);
  • The threshold figure (see previous bullet point) will go down from £6,420 to £3,850: this means that any income over £3,850 will be taken into account now;
  • The income rise disregard will be reduced from £5,000 to £2,500 (at present, a claimant's income can rise by up to £5,000 during a tax year without affecting amount of tax credits paid for that year - this will change to £2,500);
  • No child element will be paid in respect to third (or additional) children born after April 2017. There will be exceptions for multiple births and disabled children. Compared to 2015-16 figures, this will reduce the maximum annual entitlement by £2,780 per child;
  • The powers available to HMRC to recover overpayments will be widened.

Changes to tax credits for new claimants only

  • The family element (currently worth £545) will no longer be included for families whose first baby is born in April 2017 or later (I suppose this could also apply to existing claimants of Working Tax Credits only, but who don't start a family until April 2017).

The U-turn is in respect of the first two bullet points only. The income a claimant* can receive before their tax credits is reduced will stay at £6,420, and any income they have above that figure will reduce entitlement by 41p in the pound, not 48p as was proposed.

That's great, and I don't want to poo-poo the acheivements of everybody, including myself (and the House of Lords) in effecting this change. But the other provisions remain:
  • The amount a claimant's income can rise before their tax credits are affected is still being reduced by £2,500 compared to the current disregard: this could result in a claimant being £1025 worse off over a year compared to their position under the old rules.
  • Entitlement calculations will still not take acount of any children born from April 2017 onwards
  • The family element, curently worth £545 per year, which is currently included in the calculation or all clients will families, is still being removed for new claimants from April 2017 onwards
  • The powers to recover overpayments will still be widened.
Furthermore, tax credits payment rates, like those of most other social security benefits, were frozen in the budget: There will be no inflationary increase in April 2016, April 2017, April 2018, and April 2019.  The Autumn Statement reports at Section 2.2 that earnings are currently rising at about 3% and are expected to reach 3.9% by 2020. Clearly this is good news for those who are working, and, if their benefit income becomes a smaller proportion of their overall income over time, this looks like meeting the stated aim of the tax credit changes.

However tax credits are not just paid to people who are working: anyone who has children of school age or younger relies on Child Tax Credit if they have a low income. For these claimants there is no good news here.

And, even for those famous 'hard-working families', there is another problem on the horizon...

Universal Credit 

It's not happening as fast as Iain Duncan-Smith planned, but Universal Credit is inexorably spreading across the land. It is designed to replace all the means-tested benefits (except Council Tax Support) including tax credits. This means that gradually more and more people with children (for example) will be getting Universal Credit, not Tax Credits. And the changes that the Chancellor announced in the Budget are not being reversed.

In the Universal Credit system, the amount a claimant can earn before their Universal Credit is affected is called their 'work allowance'.  It therefore parallels the 'threshold figure' in the tax credit system. It differs in that only earned income is ignored, and in that there is a range of different work allowances according to different specific circumstances. In the budget many of these allowances were reduced. Let's see how this might pan out.

If you read my 13th July post, you'll remember Alex and Hilary. They have three children. Alex works 35 hours per week, and earns the national minimum wage (which becomes the national living wage from April 2016). To keep things simple, they've got no housing costs - perhaps they live in a relatives house.

As you can see from the table below, they benefit from the chancellor's u-turn if they're in the Tax Credit system: in fact their overall income rises slightly because of the national living wage, But if they're in the Universal Credit system things are very different. Because the work allowance was reduced in the Budget (for a couple who are both fit for work and have children, it changes from £123 to £91 per week), they see a reduction close to the one they would have faced had they been getting Tax Credits and the Chancellor hadn't changed his mind.

(all payment figures
are per week)
TC system
March 2016
TC system
April 2016
before U-turn
TC system
April 2016
UC system
March 2016
UC system
April 2016
Net earnings £219 £230 £230 £219 £230
Child Benefit £48 £48 £48 £48 £48
Working Tax Credit £49 £6 £39
Child Tax Credit £170 £170 £170
Universal Credit  £233 £184
Total Income £485 £455 £488 £490 £462
Compared with first column -6%+1% +1% -5%
Out of work benefits £333 £333 £333 £333 £333

And finally, more bad news for tenants of social landlords...

In the Autumn Statement the chancellor a change to Housing Benefit for these people. From 1st April 2018, Housing Benefit payments will be capped in the same way that they are for tenants in the private sector.

Perhaps this needs some explanation. Currently, if you rent from a social landlord, the maximum Housing Benefit you can get is equal to the rent your landlord charges you (minus the bedroom tax, of course, if you are considered to have more bedrooms than you need). However, if you rent privately, The maximum Housing Benefit  you can get is not related to the rent the landlord charges, but to a set of figures set locally, dependent on your age, the size of your household, and the location. From April 2018 this same principle will apply to social housing tenants who took out their tenancies on or after 1st April 2016.

You might say, as Osbourne does, that this move levels the playing field for private tenants versus those  of social landlords. Well yes, that's true, although it's a pity - though not surprising - that the field has been levelled by digging into the high side...

Alternatively, you might also say if you are a bit more cynical) that this change simply completes the work that the bedroom tax started, in reducing the security for tenants of social housing.

If you were even more cynical, you might see this move as consistent with other changes, such as allowing the right to buy, that indicate a doctrinaire opposition to the concept of social housing.

I couldn't possibly comment.

Additional Information

If you want to check out the Autumn Statement yourself, you can find it here:

For more information about Universal Credit, see

*For a joint claim this should be read as 'claimants' here and elsewhere: the two memebers of a couple don't have separate income allocations

The figures in the table were drawn from the spreadsheet of which the figure below is a screen grab.

Friday 14 August 2015

How to solve EU benefits problem: punish the young?

If you've kept your eye on recent developments in the benefits world, you'll know that two groups of people are having a hard time: European migrants to the UK; and young people. So it may or may not come as surprise that, if the BBC is correct, the government is currently considering plans that resolve  its need to appear tough on migrants by punishing British young people. Its either a scheme of floundering desperation or breathtaking cynicism. Or possibly both.

Here's the article, if you want to look at it yourself: EU migrant benefit plan 'could hit thousands of young Britons'

Here's the proposal in a nutshell. The government wants to prevent people from Europe from getting any child benefit or tax credits (and, possibly, housing benefit) until they've been in the UK for at least four years. But to meet EU equality rules, these restrictions will also have to be applied to British nationals (and foreign nationals who are settled in the UK). As children cannot get benefits in their own right, the four years start ticking when British people are old enough to claim benefits in their own right.  So a young person would be unable to claim these benefits until he or she reaches the age of 22.

Before I comment further, I should reassure you: this is, as far as I can tell, just a proposal: it's not going to affect anything anytime soon. And note that we're only talking about child benefit and tax credits here, not other benefits (yet). But it's still disturbing.

It's important to understand the context here.

The government wants to restrict benefits for EU migrants. The Labour government started the restrictions, by introducing a 'right to reside' test into the rules for many means-tested benefits. Since then there has been a progressive tightening of the rules, with the overall effect that, if you are an EU migrant, you are likely to find it very hard to get any help from the state unless you are actually working or in a short period of job-seeking (for more info about the introduction and development of right to reside rules, have a look at, for information about how this pans out in practice, check out

But it's hard to restrict entitlement further. One of the basic principles of the European Union is that it is a free market: there must be no restriction to the movement of goods, services, and labour between member states. This means that no country can make it harder for people from another EU state to work  than its own citizens. David Cameron, and others, have made a lot of noise about renegotiating the treaty rules to change this, but it's hard to see how this can happen: logically it defeats the object of the EU, and practically many other countries object strongly to any restriction of this kind.

So, unsurprisingly, lawyers have advised the government that making EU citizens wait until they have been in the UK for four years would be unlawful: 'Imposing additional requirements on EU workers that do not apply to a member state's own workers constitutes direct discrimination which is prohibited under current EU law'.

According to the BBC, the government has responded to this by proposing making everyone wait four years before they can claim child benefit and tax credits.

The frustrating thing about all this is that this isn't really about a rational response to a real problem: the evidence is that migrants bring more money into the country than they take in benefits (see, for example, Instead it's about political manoeuvring and pandering to UKIP and some elements of the press. This new proposal seems almost purpose built to divide and rule - set young British people against EU migrants. I hope, and believe, that this won't happen, and even dare to hope that it has the opposite effect.

An odd thing that is missing here, either in the government's thinking or the BBC's reporting of it, is Universal Credit (UC). By the time any change of this sort came into force UC would have presumably replaced tax credits for new claimants anyway. I presume that the child-related parts of Universal Credit would be removed for the first four years. But I cannot be sure.

If these changes were to go through, the young people who would suffer would be the ones with children. How would they cope, or be expected to cope? Who knows? And what about the children: how does this proposal square with the proclaimed intention to reduce child poverty?

A government spokeswoman approached by the BBC declined to speculate on the matters raised. But, at the risk of pushing the boat of my opinion a bit too far out, I ask this: what have young people done, for the government to be apparently willing to sacrifice their wellbeing to satisfy the imagined needs of bigots and xenophobes?

Friday 31 July 2015

The Budget and Benefit: Part 2 - some thoughts

In my last post, I laid out the basic information about the proposed changes. In this post I try to flesh out some of detail. I will look at the impact on some claimants, and express some opinions.

Some concrete examples

First of all, let's look at some concrete examples of how the changes might affect people. I'm not going to express any opinions here: the figures speak for themselves.

Low-paid workers with children, and out of work couples with children

Alex and Hilary have three children. It's March 2016. Alex works 35 hours per week, and earns the national minimum wage, 6.70 per hour (it is already scheduled to increase from £6.50 in November 2015. They would also normally receive £48.10 per week Child Benefit (which isn't going to rise for four years).

Let's look at how Alex and Hilary's situation develops:
  • In April 2016 Alex starts to receive the national minimum wage of £7.20 per hour: however the income threshold for the tax credit calculation is reduced from £6420 to £3850, and the rate at which income exceeding the threshold is increased from 41% to 48%;
  • In April 2017 the national living wage is increased: from the budget statement this looks likely to be to about £7.75.
Here's a summary of how the changes pan out. (the full calculations are available at the end of this post, in case you're interested, as are the assumptions I've used). I have also included the equivalent out of work benefit payable for comparison. For simplicity, I've not included rent or mortgage costs, and all amounts are rounded to the nearest pound.

March 2016 April 2016 April 2017
Net earnings £219 £230 £243
Child Benefit £48 £48 £48
Working Tax Credit £46 £6 £0
Child Tax Credit £170 £170 £168
Total income £483 £455 £460
- 6% -5%
Out of work benefits £333 £333 £333

Now let's look at two other couples:
  • Jo and Jean situation is the same as that of Alex and Hilary, in every way except one: their third child is born after the start of April 2017.
  • Ali and Jay do not make any claim for tax credits until after the start of April 2017
Here's a comparison of what each couple are likely to get in April 2017:

Alex and Hilary Jo and Jean Ali and Jay
Net earnings £243 £243 £243
Child Benefit £48 £48 £48
Working Tax Credit £0 £0 £0
Child Tax Credit £168 £115 £105
Total income £460 £406 £396

Out of work benefits £333 £280 £270

So if, for example, your third child is due to born in March 2017 but actually emerges in April you stand to lose about £54 per week (about £2800 per year).

You will also notice that an out of work couple with three children who make their first claim for benefits after the start of April 2017 will receive more than £60 less than an equivalent couple would have got before the rules changed, a reduction of around 20%, or £3,276 per year

Low paid worker without children, Universal Credit system

Ahmed single, has no children, and is looking for work. He is on Universal Credit.

Remember that one of the selling points of Universal Credit was that it made the transition into work easier, and made it more worthwhile working. A person on income based Jobseeker's Allowance is, at best, £5 per week better off, no matter how much they earn. If they were on Universal Credit, a specified amount of earnings are ignored: any earnings that exceed this reduce Universal Credit payments by 65p in the pound.

The problem is that, although the amount of earnings ignored for a single, childless, adult, is £111 per month (about £25.54 per week), from April next year it will be zero.

So this is what things look like for someone like Ahmed...

As you can see, for earnings up to about £25 per week, and above around £100 per week, the changes  remove any real advantage gained by introducing Universal Credit in the first place. Between those figures the post-budget version of UC effectively splits the difference. The maximum difference between the JSA rules and the post-budget UC rules is about £21 (and applies to earned income of £80).

Now here's the thing. The earnings disregard has been around for quite a while: Income Support - on which the rules for income based JSA and income related ESA are based - was invented in 1987, and the disregard was £5 then. It hasn't moved. If it had increased in line with inflation it would now be about £12.56. So the best that Universal Credit can offer compared to Income Support at its inception is an £8 per week increase.

For a wider analysis of the financial impacts of the changes, I strongly recommend the following (pdf) presentation by the Institute of Fiscal Studies (IFS):

The IFS predicts, amongst other changes, that changes to the tax credit work allowances will result in 'just over 3m families losing an average of just over £1,000 per year'.  It also notes that the freeze in benefit rates will result in a cut in real terms of 8% between 2013 and 2020.  And if you are in any doubt of the regressive impact of this and the previous government's policies, check out the graphs on the impact of government policy by income (copyrighted, so not here, but there about half way through).

Other observations

This is where I start to let my opinions show a bit more.

The 'National Living Wage'

The introduction by the government of an official 'National Living Wage' (NLW) is, from one perspective, a stroke of genius. By appropriating the term 'Living Wage' the ground is taken from under the feet of campaigner for a living wage: we've got it now, haven't we?

Well: have we? Not quite. The NLW is set at £7.20 for the year April 2016. The Living Wage Foundation sets the following rates for the previous year (i.e. this year) at £7.85 outside London, and £9.15 within London. So the NLW is less than the campaign's living wage: considerably less if you live in London.

The budget statement has a graph (on page 33) showing how the NLW is projected to increase compared with what the minimum wage would have been if it had continued. However it is a bit misleading, as it employs that ever useful trick, the non-zero y-axis. So here's my version...

I don't know about you, but that doesn't really look like a game changer to me.

And, if you're not yet 25, you don't benefit from it at all.

So that's why I put it in 'scare quotes': it's not really a living wage at all, just a rebadged and slightly increased minimum wage.

Removal of extra help for third and subsequent children

I've already discussed this at length in my previous post, possible-reductions-to-tax-credits, and I haven't got much to add here.

However, there's one little detail that needs noting. At paragraph 2.103 of the budget statement, the chancellor says: 'The Department for Work and Pensions and HMRC will develop protections for women who have a third child as the result of rape, or other exceptional circumstances'.

There's clearly a problem here: a woman who has a child as the result of rape will need to prove that she has been raped in order not to be penalised for having the extra child. How will she do that? The Guardian notes that Alison Thewliss, SNP MP for Glasgow, has raised this matter, asking, for example: 'How are you going to prove it? What if there is no conviction [for the rape] as happens in a lot of cases?...What happens if it becomes known in the local community that a woman is receiving tax credits for a third child? What assumptions will be made about that woman and her children?'

Keir Starmer raises a wider question (as comment in The Guardian): 'What about mothers who have a third child because of ongoing abuse within the relationship?' As he goes on to note: 'Power lies at the heart of most domestic abuse, and that includes power over sex, when to have children and how many'.

As it happens, I'm not completely unsympathetic to the government's wish to disincentive large families. However any change needs to be brought in via a much subtler tool than this one, and one that doesn't produce such problematic consequences.

Young people

What have young people done to deserve their treatment by the Chancellor? They will normally now not be entitled to any help with rent between the ages of 18 and 21, and will have extensive extra requirements placed on them if they want to carry on getting Jobseeker's Allowance or Universal Credit. They will be expected to participate in 'an extensive regime of support' from the outset of their claim: obviously 'support' here is a weasel word, which translated means 'hurdles, obstacles, meaningless check-box exercises, and opportunities for losing benefit'.

I can only assume that they are being targeted because, as generalisation, and as a result of disenchantment with conventional politics, they are relatively unlikely to vote. If the young start ever voting in significantly greater numbers, the government better beware!

And finally, that 'Merry-go-round'...

Before the budget was unveiled, the BBC reported the Chancellor as saying that 'the low paid would be compensated by tax cuts in an effort to end the "merry-go-round on which people pay their taxes and then get back benefits" and firms would be encouraged to pay higher wages'.

There are two different issues conflated here.

The first is the assertion that claimants are being taxed on the one hand, and then receiving tax credits and benefits on the other, and that this is ridiculous. This argument is disingenuous: a person on the NLW will be receiving paying very little tax anyway. There is no 'merry-go-round' here, except insofar that richer people pay tax which then helps poorer people: I may be naive but I regard that as a Good Thing.

The second issue is the - legitimate - concern that tax credits are, in effect, subsidising employers. However the implication that, by reducing tax credits, employers will increase wages to balance this, is unconvincing. So unconvincing that the government never quite says this.

So the working poor will see their income reduced, and the wealthy will be able to carry on making money. And as for the non-working poor: who cares what happens to them? You do. I do. But who else?

Appendix - details of calculations 

Bank of England inflation counter:

Monday 13 July 2015

The Budget and Benefits: Part 1 - the changes summarised

In last week's budget social security was centre stage, as reducing benefit expenditure seems to be the government's preferred route for deficit reduction. George Osborne's target is to reduce annual welfare expenditure by £12billion, although his initial target for fulling achieving this of 2017-18 has been delayed to 2018-19.

But what are the details? It's easy to lose these in all the political and media spin: some changes have been given greater prominence while others have been largely ignored. I've tried to lay out all the main changes here. I've also included some things, such as the 'living wage' and changes  to social housing rents, which are not benefits but are likely to have a significant impact on many claimants.

You can look at the details for yourself. The government has published the Summer Budget 2015 here: Most of the benefit related changes appear in the section headed 'Rewarding work and backing aspiration' (sigh).

In an attempt to keep this to a manageable length:

  1. All changes come into effect in April 2016 except where otherwise specified;
  2. Changes to Universal Credit that simply mirror changes in other benefits are marked '[& UC]'. 
  • There will be no inflationary increase in April 2016, April 2017, April 2018, and April 2019. The following are exempt from this freeze:
    • disability, carer, and pensioner related  benefits, elements and premiums;
    • Statutory sick pay, maternity pay, etc.
Changes to tax credits for new and current claimants
  • The income taper will be increased from 41% to 48% of gross income: in other words, for every pound over the threshold figure the claimant's tax credits will be reduced by 48p, rather than 41p (before 2011-12 it was 39%);
  • The threshold figure (see previous bullet point) will go down from £6,420 to £3,850: this means that any income over £3,850 will be taken into account now;
  • The income rise disregard will be reduced from £5,000 to £2,500 (at present, a claimant's income can rise by up to £5,000 during a tax year without affecting amount of tax credits paid for that year - this will change to £2,500);
  • No child element will be paid in respect to third (or additional) children born after April 2017. There will be exceptions for multiple births and disabled children. Compared to 2015-16 figures, this will reduce the maximum annual entitlement by £2,780 per child; [& UC];
  • The powers available to HMRC to recover overpayments will be widened.

Changes to tax credits for new claimants only

  • The family element (currently worth £545) will no longer be included for families whose first baby is born in April 2017 or later (I suppose this could also apply to existing claimants of Working Tax Credits only, but who don't start a family until April 2017). [& UC]

Employment and Support Allowance

  • For new claimants after April 2017 there will be no work-related activity component (currently £29.05). At present, after the initial assessment period, claimants  who are assessed as being potentially able to work in the future will usually receive £102.15 per week. New claimants affected by this rule will only receive £73.10 per week. [& UC]

Housing Benefit and social housing rents

  • Backdating will be limited to a maximum of four weeks (compared with a possible maximum of up to six months currently, in some circumstances);
  • For new claimants, or current claimants who start a family, there will be no family premium (currently worth £17.45 normally); [& UC]
  • There will be no personal allowances for children amounts in the Housing Benefit calculation to take account of third (or subsequent) children born after April 2017 (the same exceptions apply as for tax credits child elements); [& UC]
  • Social housing rents will decrease by 1% a year for four years;
  • Social housing tenants whose income exceeds £30,000 (£40,000 in London) will be required to pay a market rent, or near market rent (although as words in this section include 'consult', 'set out the detail', and 'due course', suggest that the timetable for this change is uncertain).

Mortgage Help (applicable to most means-tested benefits)

  • Claimants will normally have to wait 39 weeks before mortgage help begins (in fairness, the current 13 week wait was applied as a recession related provision, and was always intended to be temporary;
  • From April 2018 mortgage help will become a loan, repayable when the claimant sells the house or begins work.

Universal Credit

  • The amount people will be able to earn before their benefit is affected (the work allowance) will be reduced: For childless, non-disabled, claimants, the work allowance will go down to zero (currently £111 per month): for other claimants it will go down to £397 per month for those with no housing costs (compared to between £536 and £734 now) and to £192 per month for those with housing costs (compared with between £192 and £263 now);
  • Various changes are to be made reducing amounts for families with children. These mirror those applied to other benefits;
  • From April 2017 there will no longer be an extra amount payable for claimants who have limited capability for work and are in the work related activity group;
  • The work-related requirements placed on parents of young children will become stricter from April 2017. This is a bit tricky to explain. For simplicity, imagine you are a single parent of a child:
    • Currently, no requirements are placed on you until your youngest child is one year old. Then, until your child is three, you have to attend work-focused interviews. From the child's third birthday until they are five you also under work-preparation activities as well. Once your child is five, you have to be available for work;
    • From April 2017 there are no changes until the child is one. However, you will now have to undertake work-preparation activities once the child is two, not three, and will be expected to look for work when they are three, not five.

  • From September 2017, working parents of 3 and 4 year old children will be entitled to 30 hours of free childcare (compared with 15 hours currently).

Benefit Cap
  • The Benefit cap, which sets a limit on the total amount of benefits a household can receive, will be reduced from £26,000 to £20,000 per year outside London, and to £23,000 within London. 
Changes affecting young people 
  • From April 2017, 18 - 21 year olds will not normally be entitled to help with their rent (as part of Universal Credit - Housing Benefit is supposed to have been phased out by 2017). There are exceptions, including 'vulnerable' young people, those who may not be able to move back with their parents. Young people who have been working and living independently will also be able to get help with their rent, but only for six months;
  • From April 2017 18 - 21 year olds on Universal Credit will be expected to participate in 'an intensive regime of support' from the outset of the claim. After six months they will be expected to apply for an apprenticeship or traineeship, go on a work placement, or 'gain work-based skills'. All this is known as the 'youth obligation';
  • 18 - 24 year olds will not be entitled to the 'Living Wage'.

The 'Living Wage' (in my next post I'll justify my use of 'scare quotes' around this term.)

  • From April 2016, this will be set at £7.20, compared with the £6.50 national minimum wage currently (due to rise to £6.70 in September 2015);
  • It is intended that it reach at least £9 (60% of median earnings) by 2020.
  • It will not apply to workers who are younger than 25.

In my next post, due soon, I'll give some examples, and offer some opinions...

Main Sources

The Summer Budget 2015:
The resultant Welfare Reform and Work Bill:

Monday 22 June 2015

Possible reductions to tax credits

An e-mail popped into my inbox today from the campaigning group, 38 Degrees: George Osborne: No more kids in poverty. Please don't cut child tax credit I decided I need to have closer look.

The issue has been covered extensively in the media:

Tory welfare cuts would hit poorest third of UK families, research shows:
Cameron to hint at assault on tax credits in welfare speech:
George Osborne considering £5bn cuts to child tax credits:

What is being proposed?

The proposal is to 'return the per-child element of child tax credit to its real CPI-adjusted 2003/4 level' [1]. But what does that mean in practice?

First, some basics.

  • Working Tax Credit is available if you are in full time work (as defined by tax credits regulations), provided your income is low enough. 
  • Child Tax Credit is available if you have children, again provided your income is low enough. 
  • If you are in full-time work and have children you are potentially entitled to both. 
  • If you (or your partner) are in full time employment, have at least one child, no child care costs, and provided no-one in the family is disabled, the maximum Working Tax Credit you can normally get is £4,780 (in the tax year 2015-16), and the maximum Child Tax Credit you can get is normally £545 plus £2,780 per child (the 'child' element). 
  • So if you have two children the maximum total tax credit figure is £10,885 (£4,780 plus £545 plus two lots of £2,780)
  • What you actually receive is then reduced by 41% of any income you have over £6420.

The government is proposing reducing the amounts for children. The figure of £2780 per child would be reduced to about £1935. They get this by taking the actual figure used in 2003-4 and then increasing it in line with the consumer price index (the increases have presumably been higher than the CPI in the past in an attempt to reduce child poverty).

What's the government's rationale? And what do I think about their logic?

  1. If you support workers with in-work benefits you are, in effect, subsidising the businesses that employ them.
  2. This is a Bad Thing
  3. To remove this anomaly you reduce in-work benefits: workers' pay will increase accordingly
  4. The best in-work benefit to cut is the child element of tax credits.
Part (1) is indisputable. Part (2) is arguable either way. 
Part (3) is that bit I, and, I suppose, most of the readers of this post, find particularly unconvincing. Here's some questions that come to mind:
  • What will be the drivers of pay increases? Market forces? Strikes? Employer goodwill?
  • Will there be sanctions for employers who don;t increase their wages? (Of course not)
  • Will all employers increase their wages, or just some?
  • How long will it take for the entire employment world to make good the shortfall (if ever)?
And what about Part (4)? Why pick on the child element? The likely, and logical, reason is that all the other elements of tax credits have been increased broadly in line with inflation since 2003: only the child element has been increased at a higher rate, presumably with the aim of reducing child poverty.

Of course this leads to an obvious objection: won't reducing the child element risk increasing child poverty? Er... Yes. According to the Child Poverty Action Group [2] 1.1 million children were lifted out of poverty between 1998/9 and 2011/12. However they also cite research from 2013 that projected that from 2012-13 child poverty would rise, reaching a 600,000 increase by 2015/16. These figures, which are obviously due for verification any time soon, are  unlikely to take account of the proposed reduction to the child element, as this has only recently been suggested. 

Furthermore, this change would affect all families with children on low incomes, whether they're in work or not (this hasn't been mentioned in the media coverage I've seen so far) A single parent on Income Support with one child under five years old, for example, would see their income reduced by £845 per year too (more than £16 per week). 

Where have they got this idea from?

The government appears to have taken this proposal for a suggestion made by the Institute of Fiscal Studies (IFS): Benefit cuts: where might they come from? [3] It's worth taking a look at.

Reducing the child element of Child Tax Credit is only one of the suggestions made by the IFS. It also highlights that it would be likely to increase child poverty by 300,000, and that, 'in the absence of much-needed clarity from the government on its child poverty strategy (and in particular its attitude towards the supposedly legally-binding 2020 child poverty targets) it is difficult to assess the coherence of such a policy.

One of the other suggestions they make is to abolish Child Benefit, and increase tax credits and Universal Credit accordingly so that the poorer are not worse off. The majority of families with children would lose about £1000, but it would be the bottom third (in income terms) who would be protected. 

Both suggestions would, the IFS estimates, save about the same amount of money: about £5Bn

I leave you to ponder the reasons for the government preferred choice.


In his speech today (22nd June) David Cameron said[4]: "There is what I would call a merry-go-round. People working on the minimum wage having that money taxed by the government and then the government giving them that money back - and more - in welfare". These look like weasel words to me: a false equivalency is being presented. What is actually happening is that people on the minimum wage are too poor to be paying much tax anyway. But they do benefit from government assistance  to bring their income to a liveable level. 

Yes, it would - probably - be better if those at the bottom of the pile were earning more, and didn't need government assistance. But they aren't, and I can see no way in which a reduction in tax credits will lead to a prompt and universal increase in earnings. It's not even as if the Conservative party has given more than lip service to the Living Wage.

(The Daily Telegraph has published a surprisingly thoughtful article: David Cameron wants to cut in-work tax credits, and wants companies to pay staff more. How can he do it? I don't agree with all their suggestions, but it's a useful contribution to the debate.)

So, yes, I'm signing the petition. You might choose to.

But beware: if this cut doesn't become law, another one will...


[1] 'George Osborne considering £5bn cuts to child tax credits'

[2] Child poverty facts and figures

[3] Benefit cuts: where might they come from?

[4] Report by independent on David Cameron's speech, 22/06/2015

Monday 18 May 2015

A question about contributory benefits

Although I can't (and don't) give specific advice to individuals via, or via this blog, I do sometimes get a question from a reader that raises wider issues, and other people might be interested in. Here's one I received recently (I have changed some details to protect the person's confidentiality).

"Dear Benefits Owl

I started receiving invalidity benefit in the early 1990s.  In 1995, Invalidity Benefit was replaced by Incapacity Benefit, and this continued until claimants of Incapacity Benefit were slowly migrated over to Employment Support Allowance.  I was transferred to ESA in 2014 and am in the 'support' group of taxable ESA, as mine is contributions based.

However, it's recently come to my attention that as ESA is a taxable benefit, then it must be included in my annual tax self-assessment.  This is unfair, as claimants of invalidity benefit or pre 1995, incapacity benefit, were entitled to tax-free incapacity benefit and until it was transferred to ESA, never had to include this figure in their self-assessment.  As I have other income, I now will be effectively paying 20% tax on my ESA, as this new ruling has taken my income over my tax code.  How can they suddenly abolish a ruling that has stood for the last 18 years, that claimants of incapacity before 1995, did not have include it as a taxable benefit?

Ms A"

I've had to think quite hard about this, as there's more to this than meets the eye. Here's my response.

First, I need to confirm that Ms A's understanding of the facts is correct: sadly for her, it is.

Invalidity Benefit and Sickness Benefit were both replaced by Incapacity Benefit in 1995. Incapacity Benefit was taxable from the outset. However, having dusted off  (literally!) some old handbooks I can confirm that it was not taxable if a claimant was transferred onto it from Invalidity Benefit.

In 2008 Incapacity Benefit was, in turn, replaced by Employment and Support Allowance. Again, Employment and Support Allowance was (and is) taxable. However this time there was no concession for people whose Incapacity Benefit was not taxable (because they had been transferred from Invalidity Benefit).

For many people this will not be an issue one way or another, because their total taxable income is less than their Personal Allowance (normally £10,600 per year). But for some people, including Ms A, it is.

So, secondly, I need to look at the actual question: "How can they suddenly abolish a ruling that has stood for the last 18 years, that claimants of incapacity before 1995, did not have include it as a taxable benefit?"

The simple answer is: because they can. But of course it’s actually a bit more complicated than that.

When Employment and Support Allowance replaced Incapacity Benefit what actually happened was that the (then Labour) government created and implemented a new set of laws, and removed ('repealed') some of the old ones. It could write these any way it liked, provided it could get them through Parliament (you could say that this is Parliament's main job).

MPs or Lords could have argued that it was unfair to make Employment and Support Allowance taxable for claimants who had been on Invalidity Benefit: they could even have argued that it shouldn't count as taxable income for anyone. Maybe some did: I don't know. But we do know that if they did they were unsuccessful.

However, once any new law is enacted, people affected by it may challenge the law in the courts. There are two main types of reasons why laws are challenged:
  1. The new law is unclear. For example, in the rules for the mobility part of Disability Living Allowance (originally Mobility Allowance), one of the conditions for the higher rate was that you had to be 'virtually unable to walk', but didn't say what this meant. So over the years there have been lots of rulings from various judges to try to make this clearer. Decision makers have to consider these rulings when they make their decisions about Disability Living Allowance. 
  2. The new law conflicts with other laws that have not been repealed. For example, there was a case at the Court of Appeal regarding the 'bedroom tax', in which the judges decided that to refuse to allow an extra bedroom to a disabled child conflicted with the requirements of the Human Rights Act. Local authorities now have to follow this ruling when they consider how much Housing Benefit to award claimants with disabled children.
Sometimes laws are challenged because both types of reason apply.

In your case, type(1) clearly doesn't apply. It's very clear in the way the law is written that Employment and Support Allowance is taxable, and there is nowhere in the law that gives any exceptions from this.

And sadly type(2) doesn't apply either, as far as I can work out. There is no other law that says that contributory benefits should not be taxable, or that someone who has been transferred from one that wasn't taxable should continue to benefit from this. The laws that created Invalidity Benefit allowed for it to be non-taxable, but these laws only applied to that benefit and have been repealed anyway. The Incapacity Benefit rules had a section which allowed transitional protection for people moving onto it from Invalidity Benefit, but these only apply to that transition and not later ones.

Ultimately what this all comes down to is that MPs and Lords were not, on the whole, worried about people losing the tax free status of this type of benefit. Or perhaps they were, but were outvoted, or felt the issue was outweighed by the need to balance government expenditure.

Where does this leave someone in this position?
  • They could campaign to change the law, to make Employment and Support Allowance not taxable for everyone, or for those transferred onto it from Invalidity Benefit via Incapacity Benefit. One problem with this is that there probably many people affected by the taxable nature of Employment and Support Allowance to make sufficient impact, especially if we're only looking at people who were originally on Invalidity Benefit.
  • If a person had received a demand for tax arrears because they were not informed of the change, they could complain to the DWP. However this would rely on them never having received anything from the DWP that included reference to it being taxable, and normally people are sent year end statements from the DWP specifying how much taxable benefit they have received. And even if a complaint was successful, I am doubtful whether they would receive compensation to make up for the tax lost. And as problems like this are not the fault of Her Majesty's Revenue and Customs (HMRC) they may be sympathetic but they're unlikely to write off the tax due.
Are there any lessons from all this? Possibly...
  • If the government's thinking of changing, or replacing, a benefit that matters to you, make sure you look into it and let your MP know of any concerns. Find out if other people share your concerns: if they do, think about campaigning. None of this may work, but it's probably your only chance. Once the law has changed it's normally too late to do anything about it.
  • If you're on a benefit and it 'transitions' to another one, don't assume anything. Changes may sneak through that aren't publicised at all...
To Ms A, and anyone else with a similar problem, I am sorry I can't paint a more encouraging picture.

Friday 24 April 2015

Election Manifestos - what they have to say for benefit claimants

This post attempts to summarise the different parties' commitments regarding welfare benefits. It also looks at commitments that are not directly related to benefits, but are relevant to benefit claimants, the low paid (who can also be benefit claimants, of course), and other vulnerable people.

The post is sorted by subject, not by party: this is so you can easily compare what different parties say about the same thing (or if they say nothing at all about it...)

Even though there are no quotation marks, all the comments have been lifted directly from the manifestos, apart for a few changes to ensure grammatical clarity. If I haven't been able to find anything in a particular party's manifesto about an issue, I've left their space blank. This post only includes promises made in the manifestos, so you won't find assertions made by party members in the media that are not in their manifesto.

This is not an opinion post (despite the temptation). However, as I've had to select and digest, there is inevitably going to be some subjectivity and judgement calls:

  • I've generally, but not always, avoided promises that include words like 'review', 'consider', 'explore', 'examine', as these don't generally amount to much of a commitment. The exceptions are where they appear to relate to a clear plan of action
  • I've not included undertakings that are planned to take more than one parliament to follow through to completion (like the Green Party's proposals for radical welfare reform).
  • I've not considered stuff that might have an impact on benefits provision because of competing budgetary demands: otherwise I'd have to include everything.
  • If parties are simply committing to continue something that's already in place, I've normally left it out.
  • Much as I've been tempted to, I have not included anything about immigration issues, except insofar as they touch on the world of social security benefits.

It's been a challenge to decide which parties to include. In the end the list is:
=Liberal Democrats:

I've agonised over whether to include the SNP or not: in the end they've got in because it looks like they might take the role of kingmaker. I apologise to the parties that have been left out, but I had to balance the need for inclusion with that of getting this finished in time to be useful.

As I said before, this is not an opinion piece, but I will offer you some advice to help you form your opinion:

  • Be wary of 'weasel words' (e.g. 'we will help the jobless back to work' and 'we won't allow the sick to languish on benefits'). Always ask: what does this really mean?
  • Don't be too excited by very positive sounding pledges from smaller parties: the less likely a party is to form part of a government, the less likely it is that it will have to bear responsibility for not keeping to its pledges!
  • Be suspicious of vagueness

The manifestos can be accessed via the links below, if you want to check things out for yourself.

(The SNP wins my prize for the cleanest web address...)

I have tried to be fair and thorough, but if you think I've left something substantive out, please let me know via the comments section.

Commitments that are directly related to benefits 

Overall welfare spending

- Cap overall welfare spending: our overall welfare cap will limit the amount that government can spend on certain social security benefits in the five years from 2015-16

- we will cap structural social security spending as part of each spending review,

=Liberal Democrats:
- Introduce a 1% cap on the uprating of working-age benefits until the budget is balanced in 2017/18, after which they will rise with inflation once again. Disability and parental leave benefits will be exempt from this temporary cap


- We would be prepared to invest up to £30 billion over the Parliament to reduce the amounts that people lose from their benefits when they move into paid work


Claimant benefit cap

- We will lower the maximum amount that a single household can claim in benefits each year from £26,000 to £23,000, so we reward work.
- We will continue to have exemptions from the cap for those receiving Disability Living Allowance or the Personal Independence Payment

- We will keep the household benefit cap and ask the Social Security Advisory Committee to examine if it should be lower in some areas.

=Liberal Democrats:
- We will retain the overall cap on a household’s benefits and believe this should continue to be set at around the average family income.

- Supporting a lower cap on benefits



General benefit payment rates 

- We will freeze working age benefits for two years from April 2016, with exemptions for disability and pensioner benefits – as at present – as well as maternity allowance, statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory sick pay.

- we will not cut tax credits,  ???
- we will introduce a higher rate of Job Seekers Allowance for those who have contributed over years. It will be funded by extending the length of time people need to have worked to qualify ??

=Liberal Democrats:


- Restore the link between state benefits and earnings; ensure state benefits rise as fast as prices or wages, whichever of those grows more.
- increasing the disregards for Income Support and Jobseeker’s Allowance (JSA). Initially we would increase the income disregarded on JSA for all categories of client to £50 a week, with similar increases for those on Universal Credit

- we will vote to increase benefits at least in line with CPI inflation,

Benefits for claimants with health problems and/or disabilities

- We will help you back into work if you have a long-term yet treatable condition
- We will review how best to support those suffering from long-term yet treatable conditions, such as drug or alcohol addiction, or obesity, back into work. People who might benefit from treatment should get the medical help they need so they can return to work. If they refuse a recommended treatment, we will review whether their benefits should be reduced.
- We will also provide significant new support for mental health, benefiting thousands of people claiming out-of-work benefits or being supported by Fit for Work.

- We will reform the Work Capability Assessment and focus it on the support disabled people need to get into work. We will give an independent scrutiny group of disabled people a central role in monitoring it.
- And we will introduce a specialist support programme to ensure that disabled people who can work get more tailored help

=Liberal Democrats:
- Conduct a review of the Work Capability Assessment and Personal Independence Payment assessments to ensure they are fair, accurate and timely and evaluate the merits of a public sector providero Invest to clear any backlog in assessments for Disability Living Allowance and Personal Independence Payment.
- Simplify and streamline back-to-work support for people with disabilities, mental or physical health problems.
- Improve the benefits system for disabled people, based on the principle of one assessment, one budget. This will bring together support like Personal Independence Payment, Employment Support Allowance, a replacement for the Independent Living Fund and health and social care entitlements.
- Improve links between Jobcentres and Work Programme providers and the local NHS to ensure all those in receipt of health-related benefits are getting the care and support to which they are entitled. In particular, as we expand access to talking therapies we expect many more people to recover and be able to seek work again.


- We will end unfair ATOS-style Work Capability Assessments and return assessments to GPs or appropriate specialist consultants, who have full access to patients’ medical records and are likely to know the patient. We believe this makes them the best person to undertake assessments and we will ensure they are adequately funded and resourced to take on this task
 - Require GPs/specialists to notify the Department for Work and Pensions when they believe a patient is well enough to return to work, by issuing a ‘fit note’
- Remove ‘tick-box’ and quota arrangements from sickness and disability assessments

- Cancel the Department for Work and Pensions contracts with the private sector for benefit entitlement assessment

- We will vote to block plans to cut Disability Living Allowance by £3 billion across the UK by 2017-18

Benefits for work-seeking claimants 


- We will do more to help unemployed people get the skills they need for work, testing jobseekers’ Maths, English and IT skills within six weeks of them claiming benefits. They will be required to take up training where this will improve their chances of getting a job
- We will introduce a higher rate of Job Seekers Allowance for those who have contributed over years. It will be funded by extending the length of time people need to have worked to qualify.
- And we will commission a replacement for the Work Programme at a more local level, working with local authorities to join up support for the long-term unemployed

=Liberal Democrats:
- Deliver a reformed and improved Work Programme in partnership with English local government, and the national governments of Wales, Scotland and Northern Ireland
- We will improve incentives for Jobcentre staff and Work Programme providers to ensure there is real help for those furthest from the labour market


- End work-for-benefits programmes, or workfare
- Ensure that all those on training or work placements as part of the benefits regime are either in college-based training or at work earning at least the minimum wage


Benefits sanctions & conditionality



=Liberal Democrats: 
- Review sanctions procedures in Jobcentres. While sanctions can be a necessary last resort to ensure jobseekers are looking for work, they should not be used to cut benefit expenditure deliberately. Reductions in benefits may not always be the best way to improve claimants’ compliance: those with chaotic lives might be more successful in finding a job if they were directed to targeted support with their problems. 
- We will ensure there are no league tables or targets for sanctions issued by Jobcentres and introduce a ‘yellow card’ warning so people are only sanctioned if they deliberately and repeatedly break the rules



- We will demand an urgent review of the conditionality and sanctions regime

Benefits for young people

- We will replace the Jobseeker’s Allowance for 18-21 year-olds with a Youth Allowance that will be time-limited to six months, after which young people will have to take an apprenticeship, a traineeship or do daily community work for their benefits.
- So we will ensure that 18-21 year-olds on Jobseeker’s Allowance will no longer have an automatic entitlement to Housing Benefit.

=Labour: We will replace out of work benefits for 18 to 21-year-olds with a new Youth Allowance dependent on recipients being in training and targeted at those who need it most. There will be a guaranteed, paid job for all young people who have been out of work for one year, and for all those over 25 years old and out of work for two years. It will be a job that they have to take, or lose their benefits.

=Liberal Democrats:




Benefits for carers



=Liberal Democrats:
- Develop a package of specialist support for carers seeking parttime work or a return to full-time employment



- We will also support an increase in Carer’s Allowance so that it matches Jobseekers' Allowance

Housing benefit and council tax reduction - general



=Liberal Democrats: 
- Encourage landlords to lower their rent by paying them Housing Benefit directly, with tenants’ consent, in return for a fixed reduction.
- We will review the way the Shared Accommodation Rate in Local Housing Allowance is set, and review the Broad Rental Market Areas to ensure they fit with realistic travel patterns

- Give tenants the right to request Housing Benefit is paid direct to their landlords, whatever benefit scheme they are on

- Restore Council Tax Benefit at the equivalent of 2012–13 levels for low-income householders, costing around £500 million a year


Bedroom tax/spare room subsidy/housing benefit size criteria restrictions


=Labour: The Bedroom Tax is cruel and we will abolish it

=Liberal Democrats: o Reform the policy to remove the spare room subsidy. Existing social tenants will not be subject to any housing benefit reduction until they have been offered reasonable alternative accommodation. We will ensure tenants who need an extra bedroom for genuine medical reasons are entitled to one in any assessment of their Housing Benefit needs, and those whose homes are substantially adapted do not have their Housing Benefit reduced.

=UKIP: Scrap the ‘bedroom tax’


=SNP: We will vote for the immediate abolition of the unfair Bedroom Tax

Universal credit


=Labour: We support the principle behind Universal Credit – that there should be a smooth transition into work – but it must be affordable and fit for purpose, so we will pause and review the programme

=Liberal Democrats:
- Complete the introduction of Universal Credit (UC), so people are always better off in work. We will review UC to address any issues regarding ‘cliff edges’, and ensure increased working hours are properly incentivised for all claimants

- Halt implementation of the Universal Credit programme and carry out a thorough review of its structure and implementation, including the treatment of earned income, and removing conditionality.
- We will back an increase in the Work Allowance – the amount people are allowed to earn before their benefit is cut – of 20 per cent

Benefits for children


=Labour: cap child benefit rises for two years

=Liberal Democrats:
=UKIP: Limiting child benefit to two children for new claimants

- Raise Child Benefit as from 2016 from £20.70 a week for the oldest or only child and £13.70 a week for additional children in 2015–16 to £40 a week for each child.
- Abolish childcare tax credits and tax reliefs in the light of our proposals for free universal early education and childcare


Benefits for older people

- Continue to increase the state pension through our triple lock, so that it rises by at least 2.5%, inflation, or earnings, whichever is the highest

- We will keep the triple-lock so that the state pension increases by inflation, earnings, or 2.5 per cent, whichever is highest
- We have taken the tough choice to restrict Winter Fuel Payments for the richest five per cent of pensioners
- we will guarantee that there will be no additional changes to the Winter Fuel Payments, free TV licences or bus passes for pensioners

=Liberal Democrats:
- Legislate for the Liberal Democrat ‘triple lock’ of increasing the State Pension each year by the highest of earnings growth, prices growth or 2.5%
- Withdraw eligibility for the Winter Fuel Payment and free TV Licence from pensioners who pay tax at the higher rate (40%). We will retain the free bus pass for all pensioners.


- We would introduce a Citizens Pension in 2016. It will pay £180 a week to a single pensioner or £310 for a couple

- We will vote to continue the triple lock, guaranteeing that pensions will always rise by inflation, earnings or 2.5 per cent -whichever is the highest
- We will oppose the abolition of Savings Credit
- We will support a single-tier pension of £160 per week

Commitments that are relevant to the vulnerable, including benefit claimants

Minimum wage and living wage


- We will improve the security and reward of working life by raising the National Minimum Wage to more than £8 an hour by October 2019
- We will support employers to pay more by using government procurement to promote the Living Wage, alongside wider social impact considerations. Our Make Work Pay contracts will give tax rebates to businesses who sign up to paying the Living Wage in the first year of a Labour Government. Publicly listed companies will be required to report on whether or not they pay the Living Wage

=Liberal Democrats:
- We will pay this Living Wage in all central government departments and their agencies from April 2016, and encourage other public sector employers to do likewise


- Raise the minimum wage

- We will vote to increase the minimum wage to £8.70 by 2020.
- We will also support measures to extend the Living Wage across the UK

Zero-hours contracts, agency work, and related issues


- Labour will ban exploitative zero-hours contracts. Those who work regular hours for more than 12 weeks will have a right to a regular contract.
- We will abolish the loophole that allows firms to undercut permanent staff by using agency workers on lower pay

=Liberal Democrats: 
- We will create a formal right to request a fixed contract and consult on introducing a right to make regular patterns of work contractual after a period of time.
- We will ensure employers cannot avoid giving their staff rights or paying the minimum wage by wrongly classifying them as workers or self-employed.
- Help everyone in work on a low wage step up the career ladder and increase their hours, reducing their need for benefits, with tailored in-work careers and job search advice

- We will introduce a legally binding Code of Conduct stipulating the following:
-- Businesses hiring 50 people or more must give workers on zero-hours contracts either a full or part-time secure contract after one year, if the workers involved request it
-- There must be no exclusivity clauses in any zero-hours contract
-- Workers on zero-hours contracts must be given at least twelve hours advance notice of work. Once notice has been given, they must be paid for the work, regardless of whether or not they are actually needed

- outlaw exploitative zero-hours contracts



- We will extend the Right to Buy to tenants in Housing Associations to enable more people to buy a home of their own. It is unfair that they should miss out on a right enjoyed by tenants in local authority homes. We will fund the replacement of properties sold under the extended Right to Buy by requiring local authorities to manage their housing assets more efficiently, with the most expensive properties sold off and replaced as they fall vacant.

- For the 11 million people who rent privately, we will legislate to make three-year tenancies the norm, with a ceiling on excessive rent rises. A ban on unfair letting agent fees will save renters over £600
- We will ensure that private renters get a fairer deal.

=Liberal Democrats:
- Improve protections against rogue landlords and encourage a new multi-year tenancy with an agreed inflation-linked annual rent increase built in.
- Ban letting agent fees to tenants if the transparency requirements we introduced are not successful in bringing fees down to an affordable level by the end of 2016.
- Extend the use of Rent Repayment Orders to allow tenants to have their rent refunded when a property is found to contain serious risks to health, and withhold rent from landlords who have not carried out court-ordered improvements within a reasonable period of time.
- Introduce a new Help to Rent scheme to provide government backed tenancy deposit loans for all first-time renters under 30.

- We will establish a National Homeless Register to make it easier for those of no fixed abode to claim welfare entitlements; get access to medical and dental services; and enable support services to identify those at risk of physical, psychological and sexual abuse. 

- Introduce the right to rent (where local councils step in to help those in difficulty with their mortgage to rent their home). 
- Provide 500,000 social rented homes to high sustainability standards by increasing the social housing budget from £1.5 billion a year to £6 billion a year in the lifetime of the Parliament, removing borrowing caps from local councils.
- Devolve Housing Benefit budgets to councils, so they can design packages that improve access to housing in their local market nd enable them to provide more council housing.
- End mass council house sales and the Right to Buy at a discounted price.
- Provide more rights for homeless people, giving local authorities the same duties with regard to single people and childless couples as to families, and ending the practice of declaring people ‘intentionally homeless’. 
- Oppose new arm’s length management organisations and ensure genuine tenant participation in existing ones



- we will give families where all parents are working an entitlement to 30 hours of free childcare for their three and four year-olds

- We will help families by expanding free childcare from 15 to 25 hours per week for working parents of three and four-year-olds, paid for with an increase in the bank levy.
- We will also introduce a legal guarantee for parents of primary school children to access wraparound childcare from 8am to 6pm through their local primary school

=Liberal Democrats:
- Commit to an ambitious goal of 20 hours’ free childcare a week for all parents with children aged from two to four-years, and all working parents from the end of paid parental leave (nine months) to two years. Start by providing 15 hours a week of free childcare to the parents of all two-year olds. We will then prioritise 15 hours free childcare for all working parents with children aged between nine months and two years.
- Complete the introduction of Tax-Free Childcare, which will provide up to £2,000 of childcare support for each child and include childcare support in Universal Credit, refunding 85% of childcare costs so work pays for low earners

- will remove allow parents to use any third-party, non-related child carer they feel comfortable placing their child with, provided the care provided can be proven to be genuine.
- We will place a statutory duty on all primary schools to offer before and after-school care from 8am to 6pm during term time, with the option to extend this to all-day provision throughout the school holidays. Sessions will include breakfast and healthy snacks.
- UKIP is committed to bringing forward a full, open review of all childcare and child protection services in Britain.

- Build a free but voluntary universal early education and childcare service for all children from birth until compulsory education age, which we would raise to 7 years.
- Integrate this into the local education service, run by local education authorities, and build on existing infant schools. Local authorities would be would be given freedom as to how to do so in the light of their local circumstances. 
- Ensure that the system includes children’s centres for the very youngest children and their parents, and childcare and early education for children from age 1. 
- Abolish childcare tax credits and tax reliefs in the light of our proposals for free universal early education and childcare

- we will support an increase in free childcare to 30 hours per week by 2020.

Income tax and national insurance

- Will raise the tax-free Personal Allowance so that those working 30 hours on the Minimum Wage pay no Income Tax at all
- Will cut income tax for 30 million people, taking everyone who earns less than £12,500 out of Income Tax altogether [I think these two points may amount to the same, but I'm open to being corrected: Benefits Owl]

- We will create a fairer tax system, helping those on middle and lower incomes by introducing a lower 10p starting rate of tax, paid for by ending the Conservatives’ Marriage Tax Allowance

=Liberal Democrats:
- Raise the tax-free Personal Allowance to at least £12,500 by the end of the next Parliament, putting around £400 back in the pockets of millions of working people and pensioners. We will bring forward the planned increase to an £11,000 allowance to April 2016

- Raise the personal allowance to at least £13,000

- We support increases in the personal tax allowance

Courts and tribunals


- We will abolish the Government’s employment tribunal fee system
=Liberal Democrats:
- Improve the enforcement of employment rights, reviewing Employment Tribunal fees to ensure they are not a barrier

- We will remove ourselves from the jurisdiction of the European Court of Human Rights
- We will also repeal Labour’s Human Rights legislation


Support for advice services


=Liberal Democrats:
- Develop a strategy that will deliver advice and legal support to help people with everyday problems like personal debt and social welfare issues, working across government and involving nonprofit advice agencies
- Will train and fund 800 advisers to work in 800 foodbanks

Immigration/Benefits related

- We will insist that EU migrants who want to claim tax credits and child benefit must live here and contribute to our country for a minimum of four years
- We will introduce a new residency requirement for social housing, so that EU migrants cannot even be considered for a council house unless they have been living in an area for at least four years.
- If an EU migrant’s child is living abroad, then they should receive no child benefit or child tax credit, no matter how long they have worked in the UK and no matter how much tax they have paid.
- We will end the ability of EU jobseekers to claim any job-seeking benefits at all. And if jobseekers have not found a job within six months, they will be required to leave.

- Those who come here will not be able to claim benefits for at least two years, and we will stop child benefit being sent to families living abroad.

=Liberal Democrats:

- we will abolish the EEA family permit scheme and reinstate the primary purpose rule, meaning foreign nationals marrying British citizens will have to prove that the primary purpose of their marriage is not to obtain British residency.
- all new migrants to Britain will have to make tax and national insurance contributions for five consecutive years before they will become eligible to claim UK benefits, or access to more than non-urgent NHS services, save for any exceptions stipulated by the Migration Control Commission
- Will Stop child benefit being paid to children who don’t live in the UK 
- We will not allow non-British nationals access to the Right to Buy or Help to Buy schemes, unless they have served in Her Majesty’s Armed Forces. All local authorities, social landlords and housing associations will be required to register the nationality of their tenants in order to ensure this policy works in practice.





- We will help with household bills freezing energy prices until 2017
- we will deal with the scourge of household debt by introducing a new levy on payday lenders, using the funds raised to boost low-cost alternatives like credit unions

=Liberal Democrats: