Phase Two of the Welfare Reform: The Real Impact on Families

The most recent phase of welfare reform changes occurred this summer, with further changes due to be implemented from October 2013. This update focuses on the impact the changes will have on children and disabled people.

Personal Independence Payment

From 10 July 2013, new Claimants for Disability Living Allowance (DLA) had to start to claim Personal Independence Payment (PIP) nationwide. However, under the new legislation, children under 16 are not assessed to see if they qualify for PIP and will continue to receive DLA.

As of October 2013, the Department for Work and Pensions (DWP) will begin to invite existing DLA recipients to claim PIP. This process will begin with people whose claim is due to expire in or after February 2014, people who have had a change in circumstances which will result in their DLA going up or down and children who are set to turn 16 by October 2018.

The Bedroom Tax

The ‘Bedroom Tax’ came into force from April 2013. It reduces the Housing Benefit of people who rent social housing but under occupy their home. For example, someone who has one spare bedroom will have their benefit reduced by 14% and someone with two or more spare rooms will see their benefit reduced by 25%.

In relation to disabled children, a significant development took place on 15 May 2012 following the Court of Appeal’s judgement in the case of Gorry v DWP. The ruling meant that Local Authorities must allow for an extra bedroom for children whose disabilities mean they cannot share.

Unfortunately, a similar case that focused on disabled adults was upheld at the High Court on 30 July 2013.

This means that the additional bedroom allowance will not be extended to disabled adults. The families involved intend to appeal.

In another exception to the Bedroom Tax, registered foster carers are allowed to have an additional bedroom in their family home, regardless of whether they have a child in their care.

Benefits Cap

On 15 July 2013, a benefits cap was rolled out nationally too. This sees weekly benefit payments capped at £500 for couples and lone parents and £350 for single Claimants. The maximum amount paid will include Child Benefit and Child Tax Credit payments, so larger families may see their benefit restricted.

Local Authorities will initially administer the cap by reducing Housing Benefit payments. However, there are exceptions for households which have an occupant who receives DLA/PIP/Attendance Allowance, Employment and Support Allowance (ESA) in the Support Group category, Working Tax Credit, Industrial Injuries Benefit or War Widow/Widower’s Pension.

Universal Credit

From October 2013, Universal Credit (UC) will replace all new claims for income-related ESA, income-based Jobseeker’s Allowance (JSA) and Income Support. From April 2014, it will also replace new claims for Tax Credits and Housing Benefit.

With UC, there are some significant differences that affect families with disabled children. Under current rules, Housing Benefit can include additional Severe Disability Premium and Disabled Child Premium payments. There is no equivalent under UC. This will see families with children who have severe disabilities losing out on around £57 per week.

Also under UC, any Claimants who are classed as having “limited capability for work” and provide full-time care cannot receive the equivalent Carer Premium. This is currently worth over £33 per week.

Looking Further Ahead

The Government will implement its next phase of welfare reform changes in April 2014. This will involve new claims for Housing Benefit and Tax Credits being accommodated into Universal Credit. With working age benefit increases falling well below inflation, the incomes of families claiming benefit will continue to be squeezed even further.

This article was published in the Issue 2 of Brain Injury News.