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: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/443232/50325_Summer_Budget_15_Web_Accessible.pdf. 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]'. 

General

• 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.

Childcare 

• 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: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/443232/50325_Summer_Budget_15_Web_Accessible.pdf
The resultant Welfare Reform and Work Bill: http://www.publications.parliament.uk/pa/bills/cbill/2015-2016/0051/cbill_2015-20160051_en_1.htm

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...




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

Bedroom Tax - an important development

There was a rumour running around advice agencies this week about a potential loophole in the Bedroom Tax rules. While we were all trying to follow the argument ourselves and decide if there was any truth in the rumour, the DWP themselves have admitted that it is real. You may have already read about it elsewhere, for example at http://www.theguardian.com/society/2014/jan/09/bedroom-tax-loophole-exempt-liable-housing-benefit?

The legal details underlying this discovery are rather obscure. I've tried to summarise them at the bottom of this post as an appendix, in case you're interested. But, in a nutshell, they are as follows:

If a claimant has been living in the same rented property since before 1st January 1996 and has been getting Housing Benefit continuously between then and now, the restrictions on rent that we all call the bedroom tax don't apply to them.


Why has this come up now?

As I said above, the details are rather obscure, so no-one noticed this issue until recently. Housing Benefit rules as they are now are defined mainly by regulations that came into force in 2006, but which have been fiddled about with quite a lot since then. Every time some new initiative is incorporated, like the Bedroom Tax, they are amended again, and they are now pretty messy. In this case, the government  appears to have forgotten to take account of a rule that protects some claimants and which effectively trumps the rules underlying the Bedroom Tax. If they'd been more careful they would have written another rule that dealt with this, but they didn't.

As I understand it, a keen-eyed tribunal judge who has been hearing Housing Benefit appeals noticed this, and has been asking the local authority to state in each case whether the claimant has been continually in receipt of benefit since before 1st January 1996. The local authority has, in turn, passed this information onto other people.

Who does this affect?

Anyone who has been living at the same rented property since before 1st January 1996, and has been getting Housing Benefit continually since then. As I read the rules, they still qualify if:

• there has been a break in their claim of less than 4 weeks, but they have still been in the same property;
• there was a break because the claimant  was 'on the sick' but then tried out work under the 'welfare to work' programme, and then went back on the sick and reclaimed benefits within 52 weeks.

It also looks to me that there is protection for people who first claimed benefit at the property after 1st January 1996 but that that this was because their partner had previously been the one claiming but has since left, died, or been imprisoned, provided that they claim within four weeks of their partner leaving, dying, or going to prison.

If a claimant has changed address they will not be able to use this loophole, unless they had to move out temporarily because 'fire, flood, explosion or natural catastrophe' rendered the property uninhabitable.

What should you do if you think this applies to you, or someone you know?

You should immediately contact your local authority and ask them in writing to look again at their decision to restrict the rent. 

The legal basis for this is that a decision can be revised at any time if there has been an official error (unless an Upper Tribunal or higher court has ruled on the matter, which it hasn't in this case). 

If the local authority refuses to change its decision you should appeal. But be careful: make sure you appeal before 13 months have passed since the original decision was made restricting your rent. In general there is a one month time limit to appealing, but this can be extended by a further 12 months in exceptional circumstances (in some cases the time limit only starts when they've refused to revise your decision, but let's play safe). 

When you contact the local authority, and/or when you appeal, make sure you say why you think you fit these circumstances.

If your request for revision (or your appeal) is successful, your Housing Benefit will be increased to remove the reduction caused by the Bedroom Tax, and arrears paid to make up the shortfall between when it started and now.

Will the government 'fix' the error?

Undoubtedly. But its very unlikely they will be able to apply any correction retrospectively. Claimants can be reasonably confident about having the reduction removed until the date if/when the legislation is corrected.

What do I think about all this?

Obviously I'm pleased. Particularly as this is likely to help people who have been settled on their streets and in their communities for decades, who have seen their children leave home, and have been struggling for years on benefits.

But let's not kid ourselves. The Bedroom Tax is still there. For anyone who moved, or claimed benefit, after 1st January 1996, nothing has changed. And even those who may benefit now are likely to lose this advantage when the government corrects its mistake. 

People who the law defines as having the bare minimum to live on will still be expected to spend on rent the money they should be spending on food, clothes, and other essentials. Parents separated from their children will still not be able to keep a bedroom available for when the kids come to visit, unless they pay for it. And social sector landlords will keep having to square an unsquareable circle, being forced to evict tenants from properties that then frequently stand empty because there's no-one who fit the criteria to live in them.

Appendix - the legal argument

The Bedroom Tax affects how much Housing Benefit should be paid by changing what the 'eligible rent' is for any particular claimant. The eligible rent is, in effect, what the authorities think the rent is, whatever it actually is. So even if a claimant is entitled to full Housing Benefit, they don't get paid for the difference between their actual rent and their eligible rent.

The eligible rent in any particular circumstances is defined by the Housing Benefit Regulations 2006 (2006/213) as amended. The changes that appear in the most recent amendment incorporate changes needed to implement the Bedroom Tax. If you want to follow the argument yourself, you can find the up to date version at http://www.dwp.gov.uk/docs/a8-2501.pdf.

Originally the eligible rent was defined by Regulation 2 of these regulations, which originally then directed the reader to Regulation 12 for further details. Over the years  changes were made to restrict eligible rent in different circumstances, and so extra versions of Regulations 12 (12B, 12BA, 12C, and 12D) were added to incorporate these changes. 

Here's the complicated bit. When the Housing Benefit Regulations were originally brought in, in 2006, another set of Regulations also came into force: the Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006 (SI 2006/207)(http://www.dwp.gov.uk/docs/a8-3301.pdf). These revoked old regulations that were no longer necessary, and - this is the important bit - gave transitional protection to some claimants, so that they would not be affected in the same way as most people by the new changes. Paragraphs 4 and 5 of Schedule* 3 of these regulations says, amongst other things, that for people who have been living in the same rented property since before 1st January 1996 and have been getting Housing Benefit continuously between then and now their eligible rent is, basically, their rent.

The current version of Regulation 2 of the Housing Benefit makes it (fairly) clear that if Paragraphs 4 and 5 of the above schedule apply to a person, their Housing Benefit is determined by Regulation 12: not 12B, 12BA, or any of the other amended versions).

Now, here's the thing. The government could have written a provision into the newest version of the Housing Benefit regulations something that said that Schedule 3 of the Consequential Provisions didn't apply, but it didn't. Paragraph 4(2) of Schedule 3 took this protection away from tenants of private landlords, but no corresponding paragraph was put in for tenants of registered social landlords (the ones affected by the bedroom tax).

*In legislation, a schedule is normally an appendix consisting of a list or table of circumstances covered by the main body of the relevant regulations.

Bedroom Tax - further update, and story so far...

There has been two more interesting first tier tribunal decisions on the Bedroom Tax. Both are supportive of the tenants in question, although I have some problems with one of the cases.

Case 1

Again it's in Scotland, and again the claimant has been helped by Govan Law Centre.

In this case[1] the claimant has multiple sclerosis, and needs a specially adapted bed and bedside equipment. The judge accepted the argument that her husband needed a separate bedroom because of this, and ruled that the bedroom tax should not be applied in this case.

Judge Lyndy Boyd made this decision on human rights grounds. She found that applying the bedroom tax to the claimant and her husband would violate their right to peaceful enjoyment of possessions and the right not to be deprived of them (Article 1 of the First Protocol) in the context of the prohibition of discrimination (Article 14).

Again, this, as a first tier tribunal decision, does not set a legal precedent, but it is still likely to be taken into account when other judges decide similar cases.

It is very important here to appreciate that the cases considered thus far fall into two categories:

1. Cases where what matters is whether a room is a bedroom or not for the purposes of the bedroom tax (is it too small, is it being used for other purposes, etc?)
2. Cases where it is argued that applying the bedroom tax would be in breach of someone's human rights.

This recent case is important because it is the first one in which the Human Rights Act has been successfully applied to an adult.

Case 2

In this case[2][3] the claimant lives in Redcar with her partner. Because of her disability she and her husband sleep in separate rooms, and store various disability related equipment in a third room. Because of this they were hit with a 25% cut in their maximum Housing Benefit on the basis that they only needed one room but actually had three.

The judge allowed the appeal in part, reducing the cut from 25% to 14%, ruling that the couple 'reasonably require one bedroom each': the cut was not reduced to zero because the judge did not agree that the third room needed to be use to store equipment as it could be kept elsewhere.

In the decision  notice the judge states that 'the local authority have not taken into consideration her disability and her reasonable requirements...to sleep in a bedroom on her own.'

I have real problems with this decision. Although it is clearly a good decision morally, the judge's reasoning is, in my opinion, flawed. There is no scope in the Housing Benefit (Amendment) Regulations 2012[4] for a local authority to exercise any discretion with regard to reasonableness, or indeed to anything else. The rules require that a the decision maker 'must determine a limited rent' [italics mine] in accordance with the formula specified, which in turn specifies that a couple are only entitled to one bedroom. The only scope for employing 'reasonableness', in fact, is a paragraph which allows the local authority to reduce the rent to a lower figure than the limited rent imposed by the bedroom tax if the authority thinks it reasonable.

I think that the judge would have been wiser to allow the appeal explicitly on the human rights argument as per Case 1.

I would be happy to be proved wrong if anyone disagrees with me!

The story so far...

Let's recap:

• May 2012 - Court of Appeal rules against the government with respect to disabled children (human rights)
• July 2013 -
•  High Court ruled against disabled adult claimants (human rights)
• High Court rules in favour of disabled child claimants, and criticised the government for not acting on previous Court of Appeal decision.
• Early September 2013 - 1st Tier Tribunal (Scotland) ruled in favour of a number of claimants (definition of bedroom)
• Late September 2013 - 1st Tier Tribunal (England) ruled in favour of claimant (definition of bedroom)
• Early October 2013 
• 1st Tier Tribunal (Scotland) ruled in favour of adult disabled claimant (human rights)
• 1st Tier Tribunal (England) ruled in favour of adult disabled claimant (reasonableness).

(As the Bedroom Tax applies equally to England/Wales and Scotland decisions made in one jurisdiction are equally applicable in the other.)

As I've said previously, as the parties that have lost appeals to claimants are local authorities, not central government, and it's not particularly in their interests to challenge the recent decisions, they are unlikely to get tested in higher courts, which is good news for the particular claimants involved but annoying for everyone else because we would like to see formal precedent out of all this. In particular, if (admittedly it's a big 'if') the Higher Court or above were to rule in favour of a claimant because of the human rights argument, the judge would have the power to make a 'declaration of incompatibility' to say that the law was in breach of the Human Rights Act. This would put the government in a very uncomfortable position.

But then the Conservative Party wants the UK to withdraw from the European Convention of Human Rights...

Sources

[1] http://www.insidehousing.co.uk/legal/disabled-woman-wins-bedroom-tax-appeal/6528880.article?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=%23Property
[2] http://speye.wordpress.com/2013/10/04/redcar-another-bedroom-tax-appeal-success-and-judge-says-council-decision-making-is-unreasonable/
[3] http://www.mirror.co.uk/news/uk-news/bedroom-tax-appeal-disabled-woman-2334611
[4] http://www.legislation.gov.uk/ukdsi/2012/9780111525784/regulation/5

Conservative Party Conference

The annual Conservative party conference makes its presence felt by pronouncements about benefit claimants, and this year has been no exception.

We've heard from George Osbourne, Chancellor [1], Iain Duncan Smith, Secretary of State for Social Security, and David Cameron (briefly). The first two focused mainly on jobseekers (i.e. claimants on Jobseeker's Allowance and, in some cases, Universal Credit). 

Osbourne and 'Help to Work'

Osbourne's full comments on this are as follows [2]:

"But what about the long term unemployed? Let us pledge here: We will not abandon them, as previous governments did. Today I can tell you about a new approach we’re calling Help to Work. For the first time, all long term unemployed people who are capable of work will be required to do something in return for their benefits, and to help them find work. They will do useful work putting something back into their community. Making meals for the elderly, clearing up litter, working for a local charity. Others will be made to attend the job centre every working day. And for those with underlying problems, like drug addiction and illiteracy, there will be an intensive regime of support. No one will be ignored or left without help. But no one will get something for nothing. Help to work – and in return work for the dole. Because a fair welfare system is fair to those who need it and fair to those who pay for it too."

The relevant DWP announcement is here:
https://www.gov.uk/government/news/help-to-work-scheme-announced-by-the-government

Before we go any further, I'd better contexualise the proposal amongst all the other schemes that currently exist. It's quite confusing...

At the moment, jobseekers are (normally) placed in the 'Work Programme'[3], in which contractors are required to provide a range of measures to help them find work. This programme lasts a maximum of two years. If a claimant does not comply with the requirements of the programme (for example, fails to apply for a job) they can be sanctioned, but they cannot be required to work for nothing. On the other hand claimants can be required to work for nothing as a 'Mandatory Work Activity'[4] for four week placements of up to 30 hours per week: they are 'expected to complete placements which are of benefit to the community, including helping charities or environmental projects'. Finally, in some areas there is also currently something called the 'Community Action Programme' which is in effect, a pilot for what  Osbourne is now talking about, and is also a sort of development of the Mandatory Work Activity but requires 26 week involvement. If you remember the case where a geology graduate was required to work at Poundland it might be helpful to know that she was on the Community Action Programme[5].

Having got that out of the way, we can also note that this isn't actually as new as it's being presented. In  July 2012 the Guardian reported[6] that Chris Grayling, Employment Minister, announced to extend the Community Action Programme across the country, calling it - then -  'support for the very long-term unemployed'.

Leaving aside the value judgements and self-praising included in the speech, what can be said about these proposals?

Jonathan Portes, director of the (left-leaning) National Institute of Economic and Social Research was interviewed on 30th September by Jeremy Vine for his Radio 2 show. His concern was that there was no strong evidential base that could justify the proposal (The scheme is likely to affect about 200,000 jobseekers and will cost £300 million). He noted that the DWP's own research review concluded that there was little evidence that 'workfare' schemes increased the chances of finding work. he also said that the information gained from the Community Action Programme was not supportive. Although some people did move off benefits while on the scheme, after the trial was over they were generally found to be back on benefits, and, indeed, some were now on sickness benefits. He was guardedly positive about the concept of intensive support for people with drug, alcohol, and literacy problems, but noted that any programme of this nature was certain to be expensive and that it was therefore unwise to roll it out without piloting it first. He emphasised that it would only be any use if it improved long-term prospects.

I would largely echo these comments. I also raise the following questions:

• How will clearing up litter, for instance, improve a claimant's chances of finding work?
• How will claimants be able to afford to attend a jobcentre every day, especially in rural areas?
• Which low-paid workers will lose their jobs so that jobseekers can carry out their roles for nothing?

Iain Duncan Smith - Mandatory Attendance Centres

The relevant part of Duncan Smith's speech is as follows [7]

"But today I want to tell you about those who are already showing early signs of not being able to commit to their obligation to work. Prior to the Work Programme we are going to pilot a Mandatory Attendance Centre where selected individuals will receive expert support and supervision while they search and apply for jobs – that is 9 o’clock  to 5 o’clock – 35 hours a week – for up to six months, simulating the working day. These pilots will be targeted at claimants who will benefit from the intensive support - one pilot before the Work  Programme and one for after the Work Programme."

His comments have been accompanied by a DWP press release:
https://www.gov.uk/government/news/claimants-required-to-undertake-supervised-jobsearch-at-new-centres

Note that what is being proposed is a pilot, though no doubt it will be eventually rolled out across the country irrespective of whether it turns out to be helpful or not.

Note also that claimants will be required to attend 5 full days a week for up to six months: again, how will claimants afford the accompanying transport costs?

Duncan Smith was asked about the transport cost issue on Radio 4's the World at One on 01/10/2013. His response was that, firstly, claimants could seek help from the flexible support fund (the FSF)(although they couldn't guarantee that they would all be helped), and that, secondly, the Attendance Centres would be close to where claimants lived. There doesn't seem to be much information available about the FSF, including how big it is, as a Parliamentary Briefing note plaintively observes [8], but I'll be very surprised if the majority of claimants who incur travel costs get them met. And we don't have any details on how close is 'close'.

Actually I have some sympathy with the concept here. It is based on the understanding that jobseekers are not all the same. Some have no experience of the world of work: of coming in at the same time, day after day, of being subject to authority, of not being able to call your time your own. And without this experience, forcing them to take jobs is likely to be futile. And I accept that there are difficult questions about failure to engage, and about whether and how compulsion is appropriate. But in order for this kind of scheme to work, and not simply to be a way to remove people from benefit, the balance between support and compulsion would have to be vastly different from what it is almost certain to be.

David Cameron - young people

These comments[9] were brief, in a long speech, and are not linked to any proposals: but they suggest some worrying (though not totally surprising) changes are on the horizon. 


"There are still over a million young people not in education, employment, or training. Today it is still possible to leave school, sign on, find a flat, start claiming housing benefit and opt for a life on benefits.
It’s time for bold action here. We should ask, as we write our next manifesto, if that option should really exist at all. Instead we should give young people a clear, positive choice: Go to school. Go to college. Do an apprenticeship. Get a job. But just choose the dole? We’ve got to offer them something better than that. And let no one paint ideas like this as callous. Think about it: with your children, would you dream of just leaving them to their own devices, not getting a job, not training, nothing?  
No – you’d nag and push and guide and do anything to get them on their way… and so must we. 
So this is what we want to see: everyone under 25 – earning or learning."


A few years ago young people and their advocates learned that Housing Benefit was to be restricted for people under 25. It looks like soon we'll be thinking of that as the good old days, as it appears that the government's intention is to remove all benefit entitlement to young people who are not in employment, education, or training.

A briefing to journalists after the speech made it clear that removal of Housing Benefit will be in the next Tory manifesto, and removal of other benefits may be in the manifesto.

I think no-one would disagree that an aspiration for all young people to be in work or learning is a positive one. The problem here is reality: what if there are no jobs; no suitable training? What if a young person has behavioural or attitudinal problems as a result of their upbringing?

I also don't accept Cameron's analogy: yes, a good parent would 'nag and push and guide', but if it didn't work out would a good parent throw their child out the door, without money, food, clothes?

Concluding thoughts

This isn't an original observation, but under all the data, proposals, and schemes what really disturbs me is the underlying world view. It is one in which there is a clear distinction between those who take from the community and those who contribute to it; between 'those who need it' and 'those who pay for it';  between the deserving and undeserving poor.

What about the bloke who has done the same kind of manual work for decades but is made redundant when the company closes down, and has none of the skills needed for the jobs available? Is he a shirker?

What about the young woman who spent her childhood caring for her disabled mother?  Perhaps her mother is in a home now, or dead. Is she just a freeloader?

And what about the young single mother with a one-year-old baby?

The bottom line, of course, is that although the rhetoric is about helping people and improving society, the reality is about balancing the government's books by targeting the most vulnerable rather than sharing the burden more fairly. And caricaturing claimants as people who want something for nothing sets them up against everyone else.

Tomorrow the benefit claimant could be me. Or you. Although, probably not Osbourne, Duncan Smith, or Cameron

Sources

[1] http://www.theguardian.com/society/2013/sep/30/george-osborne-jobless-benefit-conservatives
[2] http://www.conservativepartyconference.org.uk/Speeches/2013_George_Osborne.aspx
[3] http://www.dwp.gov.uk/supplying-dwp/what-we-buy/welfare-to-work-services/provider-guidance/work-programme-provider.shtml
[4] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/220276/eia-mandatory-work-activity.pdf
[5] http://www.independent.co.uk/news/uk/politics/governments-flagship-work-scheme-in-crisis-after-poundland-slavery-case-ruling-8492346.html
[6] http://www.theguardian.com/society/2012/jul/29/long-term-unemployed-unpaid-work
[7] http://www.conservativepartyconference.org.uk/Speeches/2013_Iain_Duncan_Smith.aspx
[8] http://www.parliament.uk/briefing-papers/SN06079
[9] http://www.conservativepartyconference.org.uk/Speeches/2013_David_Cameron.aspx