Where now for Welfare Reform mitigation?

The “Fresh Start” Agreement put in place funding for “mitigation of welfare reform”, to be allocated on the basis of a report by Dr Eileen Evason, Emeritus Professor in Social Administration.

The objective of the report is to:

  • allay anxiety over reform, partly by providing supplementary payments for up to four years to carers and those with ill-health/disabilities;
  • supporting and protecting claimants with independent advice, particularly with regard to sanctions; and
  • follow the strategy adopted in Scotland to alleviate hardship for those losing out under Universal Credit.

The report specifies a (reasonable) assumption that the “Bedroom Tax” will be fully mitigated against.

Carers will retain a supplementary payment of one year from cessation of Carer’s Allowance, in the event that the person they are caring for currently qualifies for Disability Living Allowance but, under the new system, qualifies for neither Disability Living Allowance nor the Personal Independence Payment. In the event of a successful appeal and subsequent award of Personal Independence Payment, any supplementary payment will cease and the carer will be advised that they may once again claim Carer’s Allowance.

Employment and Support Allowance (ESA) will only be withdrawn with three months’ warning, after an automatic check has established an entitlement to income-related ESA does not exist, and after one year during which a supplementary payment equivalent to the ESA previously claimed will be paid. This in effect means that ESA entitlement is no longer retrospective in Northern Ireland.

Those who are currently on Disability Living Allowance (DLA) but are unsuccessful in their application for Personal Independence Payment (PIP) will retain their DLA for the duration of any appeal. Those whose application for PIP is successful but who lose more than £10 per week as a result of the change will receive a supplementary payment of 75% of the loss for one year, with an extra points allocation to increase the number who will receive this entitlement. As in Great Britain, there will also be transition support for those using the Motability Scheme.

In addition, those receiving the Enhanced Disability Premium of DLA will receive a supplementary payment for one year if they lose out during the transition to PIP. Similar arrangements will exist for those losing the Severe Disability Premium or even the Standard Disability Premium.

The Discretionary Support Scheme is extended to emergency provision in cases of difficulty relating to the introduction of Universal Credit, specifically with regard to those on low wages and most particularly for lone parents. No detail has yet been worked out, but this would be expected to be similar to the Winter Fuel Payment.

There is also a provision in theory for supplementary payments to those losing out as a result of the “Benefits Cap” for up to four years, but it is not envisaged that there will be any in practice.

It is noted that there are two key differences in the Northern Ireland legislation:

  • the maximum sanction that can be imposed in Northern Ireland is lower than in Great Britain, at 18 months; and
  • Universal Credit may be paid fortnightly in Northern Ireland (noting also that payments for rent will be payable directly to the landlord).

In addition to supplementary payments, specific funds set aside for mitigation are:

  • £105m (£35m for three years from 2017/18) for those on low wages receiving Universal Credit (with specifics noted above);
  • £2m per year from emergency payments arising from confusion over transition to Universal Payment;
  • £2.7m as a one-off to assist the voluntary sector tackle food poverty, provide support and advice, and assist credit unions.

Note that the Welfare Reform Act for Northern Ireland will not receive Royal Assent and become law until 1 May 2016.

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