Carers briefing notes

Briefing notes on carers published by DWP at this page

They say

The Universal Credit award will include a carers element which will continue for as long as the carer provides care for at least 35 hours per week for a severely disabled person. The Universal Credit earnings taper will apply to the award and the overall Universal Credit award will be reduced depending on earnings.

Within Universal Credit claimants will only qualify for a limited capability for work element or a carer element, not both. This reflects the fact that the elements are paid in respect of not being able to work through either a medical condition or by virtue of caring responsibilities. However, households will still be able to get a limited capability for work element for one member and the carer element for the other member.

The Carer’s element will not, in itself, exempt the household from the benefits cap or bring any increase in earnings disregards but it will bring the household into the ‘no conditionality’ group.

Advertisements

Updated paper

After a long summer break, and with some guilt.

An updated interim version of the paper can be downloaded here as we wait for the promised extra details as the Lords start debating the Bill tomorrow.

This has an updated childcare section which looks at the two favoured options in more detail.

More soon….. hopefully.

Next Stages

Oops!

Lounging in Italy meant that I forgot to say that the second reading of the Bill in the Lords has been put back to September 13th after the recess.

This is a general discussion session and precedes the more detailed Lords’ Committee Stage.

Tax Credit to Universal Credit Transition

An interesting day today at the annual DWP Convention. Unusually hesitant presentations by officials and ministers. Lord Freud made several errors in his address and the general lack of certainty in the details of the new scheme, even after the Bill has left the commons, is still surprising.

I’ve been working on modelling the transition issues recently and I wanted to get some more detail about a major issue from officials – so I asked them.

Tax Credits, as you may know, are paid on an interim basis; largely calculated by the estimates of income provided by the claimant (as we’re told the current ministers now want to refer to the last administration’s ‘customers’). In the following tax year, or often the next again for the self-employed, HMRC reconcile the amount paid against the amount the claimant was entitled to and, subject to various disregards of increases or decreases in income, recover or pay the difference.

Universal Credit is meant to be paid on live, monthly incomes, although they’re still working on the details for self-employed people, so that reconciliation won’t be an issue any more.

What I want to know is how, or whether, the reconciliation will work when people move onto Universal Credit, a different benefit from a different department and paid under a different act. Even more interestingly the government has promised that transitional protection will apply to people moving onto Universal Credit and that no-one will be worse off in cash terms.

So… will claimants be expected to pay back money perhaps two years after moving onto Universal Credit? Will transitional protection apply or not to these people? Will the government just write off any under or over payments of Tax Credits at the point of transfer.

The answer – it’s being thought about! Another element in the carefully planned simple seamless system that might, just, make it a bit less simple or seamless.

Capping Hits the Headlines

The main story in today’s Observer is a leaked letter from DCLG about the effects of the proposed capping. You can read it at Tories admit benefit cuts risk 40,000 homeless families.

The likely effects aren’t new, many organisations and individuals have pointed out the dangers before, and even the government have accepted them publicly.

The DWP’s impact assessment for the proposal said
… overall around 50,000 households will have their benefits reduced by the policy … On average households will lose around £93 per week.

and

Housing Benefit may no longer cover housing costs and some households may go into rent arrears. This will require expense and effort by landlords and the courts to evict and seek to recoup rent arrears. Some households are likely to present as homeless, and may as a result need to move into more expensive temporary accommodation, at a cost to the local authority. It is not possible to quantify these costs because they are based on behavioural changes which are difficult to assess robustly.

A year ago a minister, Baroness Hanham, said in a debate
… there will be casualties from that; there is no doubt about that. It will be up to local authorities to deal with that as sensitively and carefully as they can if people have to leave their home.

What is new is that these are hard figures and official ones too and that alternatives are proposed. Perhaps Eric Pickles department has a better method of predicting behavioural changes than the DWP has; if they have then maybe the DWP should ask them to look at the effects of some of the other proposals as well.

Childcare Again

Still no decision but I gather that the options are narrowed to Option A or Option B.

These are generally seen as being the ‘least bad’ of the proposals but will still mean losses for existing childcare help recipients. They also mean that Universal Credit making everyone ‘better-off in work’ may not happen for a substantial number of people.

To cap, or not to cap?

Is that the question that the nobler minister had in mind and answered too soon?

On the BBC Politics Show on Sunday 12th June, Lord Freud, being asked about the fairness of the cap said

“We’re looking at exceptional circumstances which some people may find themselves in and we’re going to be putting out arrangements for that later in the year …. Wherever we think that there’s something happening that is undesirable, and we’re looking very carefully at how to draw up those protections”

This seemed to be a recognition that a blunt cap could have some devastating effects on some families, in particular those with large families and high housing costs – which often go together.

Today though, the Guardian, with others, has reported that the Secretary of State and Prime Minister have restated the original proposal

“…. Duncan Smith denied there had been any U-turn.

“The benefit cap will restore fairness to the taxpayer and fairness to those who do the right thing on benefits,” he said. “The policy is unchanged. The £26,000 benefits cap remains.”

Duncan Smith’s comments were echoed by Downing Street, where a Number 10 spokesman confirmed that the policy was “unchanged” and the cap level was being kept.”

Other ministers have said, previously, that the government was looking at ways of easing the transition for families and providing assistance in hard cases, so the swift reaction may be more media than policy related.

Our modelling has shown that the cap makes it impossible to afford a four bedroom house, for an appropriate sized family, anywhere in the country, so my guess is that we will see, in the fullness of time and at an appropriate juncture, an adjustment, not an exemption, to the cap for some ‘exceptional circumstances’.

Childcare options that the Government are considering for Universal Credit

The Government has told MPs on the Welfare Reform Committee that they are considering a number of options for childcare support in UC. They are:

Paying 70% of childcare costs to all lone parents and all couples where both parents are in work, up to a limit of £125 (for one child) and £210 (for two children or more) (620,000 families receiving support);

Paying 80% of childcare costs to all lone parents and all couples where both parents are in work, up to a limit of £100 (for one child) and £150 (for two children or more) (620,000 families receiving support);

Using the existing format, paying 70% of costs up to £160 (for one child) and £270 (for two children or more) where both parents are in 16 hours or more of work each (550,000 families receiving support);

The above but excluding lone parents from the hours requirement, with a 70% rate and limits of £150 and £250 (570,000 families receiving support);

Paying childcare costs only if the youngest child is less than 5 years old, at 80% up to £175 and £300 (with 360,000 families receiving support);

And lastly a suggestion of varying cash limits by the age of the youngest child (no figures given apart from that 620,000 families would receive support).

While we haven’t yet modelled the full effects of these options, it’s clear that they have different effects on those needing more or fewer hours of care while maintaining an hours requirement contradicts much of the original thrust of the reforms.