April benefit changes (mostly reductions...)

April is the month that changes to benefit rules announced in budgets and autumn statements usually take effect. This includes everything from major structural changes to annual inflationary increases. It won't surprise anyone, I think, that almost all the changes this April are negative ones...

Annual uprating

In the 2015 budget the then chancellor announced a freeze on the main working age benefits: there would be no inflationary increase in 2016, 2017, 2018, and 2019. There is no freeze on benefit rates for claimants who are old enough to receive a state pension.

For working age claimants, it is easiest to list which rates are going up:

• Bereavement benefits (although see below in this post for bad news for some bereaved claimants);
• Disability Living Allowance and Personal Independence Payment 
• Carer’s Allowance ;
• Disability and carer related premiums that form part of means-tested benefits (for example, a single claimant who is on income-based JSA and is also in receipt of Personal Independence Payment their basic personal allowance will remain the same as previously (£73.10 per week) but the additional disability premium they should be getting will rise (from £32.25 to £32.55 per week); 
• The extra amount of Employment and Support Allowance and Universal Credit paid to claimants in the 'support group' - there is no increase to extra amount paid to claimants in the 'work-related activity group' (and see below for other changes for new claimants);
• Incapacity Benefit (for the few claimants who are still getting this);
• Industrial Injuries Disablement Benefit, and related benefits;
• Maternity Allowance;
• Statutory Sick Pay, Maternity Pay, Paternity Pay, and Adoption Pay;
• Adult dependancy increases for some benefits (rare).

There's also a (very) small positive change to Universal Credit. The taper rate is being reduced from 65% to 63%. This means that any relevant earnings received by a claimant reduces their benefit by 63p in the pound rather than 65p. This does not, though, come close to redressing the reductions in 2016 of the work allowances (the amount claimants can earn without their benefit being affected).

Employment and Support Allowance (and Universal Credit for claimants who are not fit for work)

This is a real stinker (in my opinion).

Some background first. Employment and Support Allowance (ESA) is a benefit for claimants who are not fit for work (or, in government-speak, have a 'limited capability for work'). Claimants on this benefit are assessed under the work capability assessment. Those who satisfy this test are then divided into two groups: the work-related activity group (who are expected to participate in activities to help them become more able to move into work) and the support group (who are judged to be too ill or disabled to undertake any activities). Until April, claimants who were placed in the work-related activity group were paid an extra £29.05 (the 'work-related activity component') as well as their standard £73.10 per week: claimants in the support group were paid an extra £36.20 (or, sometimes £51.95).

From April this year new claimants who are placed in the work-related activity group will no longer be entitled to that extra £29.05 (existing claimants will not be affected). The government's justification, insofar as I understand it, is that giving claimants this money encourages them to stay 'on the sick' rather than look for work, and that it's not fair to give them more money than claimants who are on Jobseeker's Allowance and looking for work.

This is not the place for a lengthy critique of this position, but I will make the following observations. Firstly, most claimants of ESA - in my experience - do not choose to be unfit for work, and are not realistically able to comply with all the requirements placed on jobseekers. Secondly, those claimants who really should be looking for work will generally find it hard to stay on ESA: it's hard enough for claimants who definitely shouldn't be looking for work. Thirdly,  the extra amount was included in the original rules because it was thought that people with health problems and disabilities generally have additional expenses that the healthy and able-bodied do not have.

And finally, there's a very obvious injustice. Claimants on Jobseeker's Allowance who are also in receipt of Disability Living Allowance or Personal Independence Payment are entitled to an extra £32.55* per week: this is called the 'disability premium'. This was left out when the rules for ESA were drawn up, presumably because the extra amounts paid to claimants in the work-related activity and support groups dealt with this. The work-related activity component has been removed, but the disability premium hasn't been put back in. So a claimant on ESA who also gets Disability Living Allowance or Personal Independence Payment will get £32.25* per week less than if they were on JSA. How can this be fair?

For claimants in the Universal Credit system, there are equivalent changes that have roughly the same effect.

*For couples this figure is £46.40.

Changes to Child Tax Credit (CTC) (and to how children are treated by Universal Credit)

There are two major changes here:

1. New claims for CTC from 6th April will not include the 'family element' - previously £545 per year in the award.
2. There will be no extra amounts paid in respect for third  or further children born on or after 6th April. This applies to both new and existing claims.

People who are in the Universal Credit system will also no longer receive extra amounts for third or further children.

Clearly a key concern here, among others, is that of the impact on these changes on 'non-consensual conception', or what many of us might call 'rape'. Although the law does provide that a claimant will not be affected by this change in these circumstances, this puts a female claimant in the potential position  of having to prove that they were raped. This raises all sorts of questions about privacy, dignity, and burdens of proof. The Social Security Advisory Committee (SSAC) expressed these concerns in a letter to the Minister of State for Employment, but he did not change the rules to address these concerns. You can read the SSAC's letter here:  www.gov.uk/government/uploads/system/uploads/attachment_data/file/590932/ssac-to-damian-hinds-2-child-exceptions.pdf

And finally...

Bereavement Benefits

These have been completely redesigned. The information that follows is a very brief summary of the main points.

Hitherto claimants could apply for a Bereavement Payment - a one off amount of £2,000 - and either:

• Widowed Parent's Allowance - the claimant must be responsible for at least one child , or
• Bereavement Allowance - but this is only payable for 52 weeks, and the claimant must have been 45 years old or more when their spouse died.

All these benefits are dependent on the deceased having paid enough National Insurance contributions. In both cases the amount payable is usually £113.70 per week (but can be less, depending on NI contributions).

From 6th April these are all abolished for new claimants, and replaced by Bereavement Support Payments. 

Claimants who are getting Child Benefit (or pregnant) are entitled to monthly payments of £350 for 18 months, and an additional first payment of £3,500 in the first month.

Other claimants are entitled to monthly payments of £100 for 18 months, and an additional first payment of £2,500 in the first month.

There are some advantages to the new scheme: payment is no longer dependent on the deceased spouse's NI contributions, and claimants do not have to be at least 45 years old when they were bereaved.

On the other hand, the ongoing payments are much less (roughly equivalent to  £80.77 and £23.08 per week), and the payments to claimants with children are now time limited. Under the previous scheme, a claimant who was bereaved 10 years before their final child grew up might be entitled to Widowed Parent's Allowance totalling very roughly £60,000 over that time. Under the new rules the same person would only get £9,800 (including the initial extra payment of £3,500).