The Welfare Reform Act 2012 contains changes to benefits that will affect many people with a learning disability
Welfare reform has been the subject of many headlines in recent months, with a number of amendments to the Welfare Reform Bill being made by the House of Lords, only to be overturned by the House of Commons.
The Bill received royal assent on 8 March, after ‘ping-ponging’ between the Commons and the Lords. The government imposed ‘financial privilege’ on many amendments, a device that means only the Commons has the right to make decisions on Bills that have large financial implications.
So what did the final version of the Welfare Reform Bill look like and how will it affect people with a learning disability?
The Bill included plans to introduce the Universal Credit benefit. It also set out some changes to Employment and Support Allowance (ESA) and plans to replace Disability Living Allowance (DLA) with a new Personal Independence Payment (PIP).
Much of the media coverage of the Bill centred on the £26,000 annual cap on total household benefits. This will not apply to households including a member on DLA, so will not affect those people with a learning disability who are eligible for the benefit. However, some of the other reforms may have a bigger impact.
The changes will affect people in England and Wales, and broadly similar legislation is likely to follow in Northern Ireland and Scotland.
Importantly, many of the changes are subject to ‘transitional arrangements’, short-term protection for those who would otherwise experience a reduced income.
The Welfare Reform Bill’s main focus was the introduction of Universal Credit to replace most means-tested benefits, including income-based Jobseeker’s Allowance, income-related ESA, Income Support, Housing Benefit and Child Tax Credit. The government says the changes will simplify the welfare system and remove disincentives to work.
Mencap senior campaigns and policy officer Jane Alltimes said: “We welcome the principle of simplifying the system. But we are concerned that the way different benefits are being brought together is actually going to result in some disabled people being worse off.”
One example is Tax Credits, which are paid to low-income families. Currently, parents of disabled children who receive DLA get a ‘disability element’ top-up to their Child Tax Credit of £53.62 per week for each disabled child. This money is used to pay for the additional costs involved in bringing up a disabled child, like wear and tear to clothes and equipment.
Within Universal Credit, the equivalent ‘disability addition’ will fall to £26.75 per week. The House of Commons overturned the Lords’ amendment to the Bill, which would have ensured the current level of support was maintained.
The change won’t affect families with a child in receipt of the high-rate care component of DLA. However, the Every Disabled Child Matters (EDCM) campaign group estimates 63% of all disabled children will lose out.
Laura Courtney, campaigns manager for EDCM, said: “The current proposed rates are badly targeted and will mean that there is likely to be a sharp rise in the number of disabled children living in poverty.”
During the debates on the Bill, however, Minister for Welfare Reform Lord Freud announced a “serious and substantial” review, by the end of 2015, into which children will qualify for which rates. At the same time, the government will be looking at whether to move disabled children onto PIP, so the two reviews may be intertwined.
Another area of concern for Mencap is that the Severe Disability Premium will be discontinued under Universal Credit. Currently, it aims to meet the extra costs experienced by a disabled person living alone and is worth £53.65 a week.
Housing Benefit restrictions
Housing Benefit is one of the benefits being absorbed into Universal Credit. The Welfare Reform Bill introduced tighter rules on having a spare bedroom. This means that 670,000 households will lose an average of £670 a year. Two thirds of those households contain a disabled family member.
On 1 February, a group of charities wrote to The Guardian in protest at the plans: “Many, despite having nowhere else to move to, will see their incomes cut if the Bill passes unamended.” Many disabled people need an extra bedroom for a carer or family member and fear losing their support network or adapted home if they are forced to move as a result.
This proved to be one of the most controversial elements of the Bill, with the House of Commons twice rejecting a Lords amendment to exempt disabled people, among other groups, from the cut. Lord Freud, did, however, say that an extra £30 million of funding had been announced for discretionary housing payments for 2013/14, aimed at disabled people living in adapted accommodation and foster carers.