Category: Social security

This blog includes discussion of issues in British social security policy, along with new material to complement my book, How Social Security Works.

The people versus social security

The Prime Minister’s commitment to cut welfare benefits in the long term follows a poll that suggests that a substantial number of people think likewise. An article by Peter Kellner reports that “People are turning against welfare, other than help for the elderly and disabled.” The poll, reported by Peter Kellner of Yougov, appeared in Prospect Magazine in February.

Much of the response, though, reflects misinformation about the benefits system. The current debate is driven by three key beliefs: that

  • the critical problems in benefit relate to “out of work” benefits;
  • expenditure on welfare is growing because of increasing demands from people of working age; and
  • the nature of provision leads to long-term dependency, generation after generation.

The evidence shows a different story:

  • Two thirds of DWP expenditure goes to people over working age. Benefit expenditure tables are available at this link.
  • The growth in expenditure is mainly attributable to older people (see the Benefit Expenditure Tables) and the extension of tax credits to people in work, not to the growth of “out of work” benefits.
  • Long-term dependency for jobless people is exceedingly rare. Hardly any unemployed people in the country – fewer than one unemployed person in every thousand unemployed people – have been continuously unemployed for ten years. The main long term dependency is found instead in people with long term disabilities. See my blog on the length of claims or the DWP figures.

From the Department of Circumlocution

Following the publication of the draft Universal Credit Regulations, I have been looking at the rules defining couples. Under the new rules, couples are being required to claim jointly, and neither has any secrets from the other. Couples are defined in the Welfare Reform Act 2012, s.39, as follows:

    “(1) In this Part “couple” means—

  • (a) a man and woman who are married to each other and are members of the same household;
  • (b) a man and woman who are not married to each other but are living together as husband and wife;
  • (c) two people of the same sex who are civil partners of each other and are members of the same household;
  • (d) two people of the same sex who are not civil partners of each other but are living together as civil partners.

(2) For the purposes of this section, two people of the same sex are to be treated as living together as if they were civil partners if, and only if, they would be treated as living together as husband and wife were they of opposite sexes.”

I was intrigued by the description of people in same sex relationships as “living together as civil partners” when they are not civil partners. When the legislation governing civil partnership was introduced, the government went out of its way to emphasise that it was not a form of marriage. Civil partnership was deliberately defined in terms of public commitment, and strongly distinguished from marriage. Now we find it treated in the same terms as “living together as husband and wife”. Neither definition, of course, explains directly what this means.

Universal Credit Draft Regulations

The Universal Credit Draft Regulations have been published, and are available here. There are several hundred pages of regulations and explanatory notes, and it is going to take me some time to get a sense of just what the proposals mean. At a first glance, however, here are some of the issues.

  1. Young people under 18 are not normally included in the scheme. In England, there may be the expectation that they will be in school. In Scotland, the same will not be true, and a young person who moves into the world of work at the age of 16 will not normally be treated as entitled to work-related benefits.
  2. There seems to be a cliff-edge for owner-occupiers, who will lose housing support completely if they move into “paid work” of any kind.
  3. Where sanctions are applied, and hardship payments are made, the hardship payments are recoverable. Because the sanctions have been extended, potentially, for years, that implies that repayments will also be extended for years.

Benefits from other sources, such as local government benefits, seem to be excluded from consideration as either earned or unearned income; that suggests that they might be fully exempt.

There are some other points which are worth noting:

  • People who come off Universal Credit because of increases in income will go back onto automatically, without having to reclaim, if their income goes down again within six months.
  • Where a couple claims, both must expressly consent to the terms, or neither will be eligible. A sanction applied to one is applied to both, and the circumstances of one person in a couple will be open to the other.
  • Entitlement is being based on the calendar month. If rents are not brought into line – there is no reason why they should not be – the calculation of rent payments is going to be complex, and it will need to be recalculated month by month.
  • Payments to people without bank accounts will be available only by the Paypoint system; there is no obligation on banks to make accounts available.
  • There are several points where the government states there will be “no right of appeal”. This position is not sustainable in UK law; it means that appeals will go for judicial review of administrative action rather than through specified processes.

All these points are subject to further clarification, and some of them may not be realised in this form.

I’d be grateful if people who are aware of other issues could point them out.

The timetable for Universal Credit

Taken together, two recent announcements point to an important concession in the plans for introducing Universal Credit. Initially the government planned to take all new claims and significant changes from October 2013. The current plan is first to run a pilot in Manchester and Cheshire, taking about 1500 claims a month for six months. The next six months will see a roll-out to one district in each region. All new claims will finally be taken by mid-2014, rather than October 2013 as planned. Both the testing and the delay are welcome; they reduce the potential for the kind of administrative crash that seemed to be looming. However, as the processes that are needed do not exist yet, it is difficult to say more about what this is all going to mean for claimants.

The impact of DLA changes

Last week, I was asked what I thought the impact would be of DLA changes, but I didn’t feel I could give a sensible answer. The problem I have is straightforward. If the Personal Independence Payment removes the lower rate of the care component, it is not possible to assume that the same number of people will get the new care component as those who currently get the higher and middle rates of DLA. Part of the problem, too, is that it’s never been very clear on what basis people get the lower rate rather than the middle rate – it often hangs on a distinction between care for “a significant portion of the day” and “frequent care throughout the day”. Welfare rights advisers just encourage claimants to put in an application regardless, and that’s what they will need to do with the new rules when they’re finalised.

Today, I’ve just seen the government’s response to the Joint Committee on Human Rights, and it looks as if the government can’t give a sensible answer either. They comment that “The ability to undertake cumulative analysis is limited because of the complexity of the modelling required and the amount of detailed information on individuals and families that is required to estimate the interactions of a large number of different policy changes.”

Report of the Welfare Reform Committee

The Scottish Parliament’s Welfare Reform Committee has issued its stage 1 report. They express “grave concern” about the current progress of welfare reform, making these points:

• changes to the benefits system will remove lifeline benefits from large numbers of vulnerable people;
• the means of applying for new benefits is complex …
• 330.000 people are caught within an appeals system that overturns two thirds of these assessment results …
• there will be major impacts on the independence of disabled people, and on child poverty and homelessness levels;
• the likelihood of individuals and families getting into serious debt … is increased;
• the Department of Work and Pensions … has done limited work to assess the impacts on different groups …

There is also a short section on the issue I have been raising:

“Social Fund
103. In its early consideration of the Bill the Committee harboured some concerns about the absence from it of powers in relation to the discretionary elements of the Social Fund, which have been devolved.
104. The Committee also received written evidence from Professor Paul Spicker, Grampian Chair of Public Policy at the Robert Gordon University. In his evidence Professor Spicker contends that there are legal competence issues for the Scottish Government in undertaking some aspects of welfare reform, including the discretionary elements of the social fund that have been devolved:
Professor Paul Spicker – There needs in particular to be a residual power to promote welfare and to give financial assistance to any person – the same power currently possessed by English local authorities. As things stand, the promotion of welfare, and payments of financial assistance to individuals by way of benefits, are ultra vires.
105. In her evidence to the Committee on 1 May, the Cabinet Secretary explained that the Scottish Government will put in place interim arrangements using the general power of wellbeing that local authorities possess, along with a section 30 order to facilitate that 107 . In the longer term the proposal is to introduce a social fund bill in 2013-4, coming into force in 2015. The Committee welcomes the clarification from the Cabinet Secretary on interim arrangements for council tax discounts and the social fund and looks forward to assessing these arrangements and contributing to their development in due course.”

Life expectancy and pensions

A report by PWC on pensions draws attention to some fairly startling projections about life expectancy; they claim that pensioners born in 2050 will have an average life expectancy of 104. The source of the prediction are tables produced by the Office of National Statistics – this link goes to their main projection. For people born in 2050, the projection is that 48.4% of males, and 55% of females, will live to 100. The ONS also note that “As only one person worldwide has ever been verified as living beyond 120, estimates of numbers surviving to very old ages are highly uncertain.”

There are no strong reasons here for immediate panic. Even if the pension age stays at 66, people born today will not get their pension until 2078; and the troublingly long-lived babies of 2050 will get their pension in 2116. That is far enough away for our great grandchildren to be able to do the sums, probably a little more effectively than we can.

Scotland's powers and the Social Fund

This is from a discussion from the Scottish Parliament’s Welfare Reform Committee, 1st May 2012:

“Jackie Baillie: Evidence from Professor Paul Spicker suggested that the Scottish Government does not have the power and competence to deliver benefits and the replacement social fund, and you appear to have opted to use local government powers, through a section 30 order. Is that why you said that you are considering introducing a social fund bill in 2013-14?
Nicola Sturgeon: We would need the section 30 order to legislate, as well. We have chosen the approach that I described partly for reasons of speed, so that we can get the interim arrangements in place, and because we are confident that we can do it in such a way. Our preferred approach of legislating later is just that—a preferred approach—and is not being taken because we consider that we require primary legislation. However, because of the interaction with social security we need a section 30 order, combined with the general power to advance wellbeing that local authorities have, to put the arrangements in place.
Jackie Baillie: Was he correct to say that there are issues of competence, which you have managed to overcome?
Nicola Sturgeon: To whom are you referring?
Jackie Baillie: Professor Paul Spicker.
Nicola Sturgeon: Before I could say whether he was correct I would need to look at the evidence. I would be happy to do so and to tell the committee what we think of it, if that would be helpful.
Jackie Baillie: It would be helpful to our consideration to understand what powers the Scottish Government has and for what purpose you would seek a section 30 order.”

So – am I right? The straight answer is, I don’t know. The issues are complex; the powers conveyed by the devolution settlement relating to local government can be read in different ways; in the event of a dispute, it is often difficult to know what an authoritative interpretation would look like. My main concern in raising the matter publicly now is to ensure that any resolution will not involve delay, confusion or denial of service to people in need. The resolution seems to hang on what the proposed section 30(2) order actually says. I am reasonably confident that the problems can be ironed out, but any practical solution is going to need to clear the ground so that Scottish and local government can operate effectively.

A further note, June 2012. A note from Nicola Sturgeon says this:

“The Scottish Government’s position on Professor Spicker’s submission is that his analysis of the power to promote well-being, specifically as enabled by section 20(2)(b) of the Local Government (Scotland) Act 2003 is generally consistent with our own analysis … we do intend to work with the UK Government to bring forward an order under section 30 of the Scotland Act, to ensure that the desired policy can be delivered using to power to promote well-being.”

ESA assessments: new figures

Figures were released in March for the reassessment of ESA claims, and in April for new ESA claims. The reassessment figures show that over time, increasing numbers of people who formerly claimed Incapacity Benefit are being found as fit for work – 37%, when in the pilots it was 22%. The new claimant figures show that diminishing numbers of people are being found fit for work – 46% of claims, when in mid-2009 it was 67%. Those findings are consistent with each other – we should expect more people receiving benefit to be entitled than there are among people who claim – but both seem to show important shifts in practice over time.

The percentage of successful appeals also seems to be falling, down to 31% for new claims. As before, 9 out of 10 people who apply with neoplasms (cancer) and congenital or chromosomal disorders (e.g. Downs syndrome) are not fit to work, and 7 out of 10 in both groups go to the Support Group (for those with the greatest levels of incapacity).

Further note, 19th September: The government has announced that people undergoing chemotherapy or radiology for cancer will be exempt from the Work Capacity Assessment.

Personal Independence Payment

I have been looking at the consultation paper about Personal Independence Payment with some puzzlement.
The purpose of this reform was to replace the Disability Living Allowance, which the government thought was broken. This reform holds to the same basic structure as DLA – “care” and “mobility” components, and the denial of mobility support to older people unless their condition develops earlier. There is very little in the document which tries to deliver what the government claimed they could deliver – a personalised, sensitive and responsive benefit, administered through professionals. That is probably a good thing; it may make sense for physical support and care to be highly responsive, but people want and need support for income to be stable and reliable. There is also little in the reform that deals with the kinds of issues that have presented genuine problems, notably the response to mental disorders and conditions like multiple sclerosis that fluctuate frequently. That is not so good; people need the system to be consistent and predictable, and at present there is little prospect of either. As so often happens in benefit reform, it seems all too likely that the government will discover that their reforms have not had the effect they imagined, and they’ll have to come back for more.