APPENDIX 5
Memorandum submitted by Rotherham Metropolitan
Borough Council Welfare Rights & Money Advice Service (SF
13)
SUMMARY
1. We welcome the enquiry into the Social
Fund. The main advantage of the Social Fund is the accessibility
of interest free loans, and grants where applicable to benefit
claimants. The biggest disadvantage is that the Social Fund is
strictly budget limited. This in reality heavily influences decisions
and creates inequities between claims at different times and in
different areas i.e. the Social Fund depends on when you claim
and where you live.
2. The most recent changes to the Social
Fund Regulations in April 1999 were intended to "streamline"
budgeting loans and simplify the scheme for claimants. Discretion
based decisions were replaced with fact based decisions, testing
applications against a simple set of common factual criteria.
We find that the need no longer to provide lengthy and detailed
justification of every item for which money is required is working
well. However the main reliance on qualifying benefit period and
membership of household can lead to inflexibility in decision
making. There appears to be little use of discretion on the basis
of other criteria specified in directions.
3. The need to make separate applications
for each type of Social Fund payments mitigates against claimants.
Applications should be treated as an application to the Social
Fund as a whole.
4. The 78 week repayment period and repayment
rates of up to 25 per cent are causing hardship. The period of
repayment should be increased from 78 weeks and the rates of repayment
reviewed.
5. The strict budget limited fund affects
both the exercise of discretion and the integrity of the decision
process. Budget allocation formulas need reviewing to address
this issue.
6. There needs to be a fairer decision making
process to decide who is the responsible person for a funeral.
The current regulations have placed cost savings above human dignity.
1. Inflexibility of System
Whilst the points system introduced for budgeting
loans may have led to more objective decision making its inflexibility
can lead to claims being turned down and special needs being disregarded.
There is no space on application forms for details of special
needs e.g. special diets and other exceptional or individual circumstances
or why they particularly need this item.
Case 1
40 year old client with depression and possible
dementia and young child were turned down for a Budgeting Loan
because they already had a Budgeting Loan for £200. They
needed a mattress as theirs had to be destroyed due to mice infestation.
The situation was causing distress to the partner and carer and
causing aggravation of mental health problems.
2. Separate claim forms for grants and loans
The need to fill in separate forms for Community
Care Grants, Budgeting Loans and Crisis Loans can delay the granting
of Social Fund payments. The Benefits Agency places total responsibility
on claimants to know which form of Social Fund to apply to and
many claimants evidently do not apply as a result for a Community
Care Grant for which they are eligible.
The separate claim system must surely add to
the number of decisions and workload of the Benefits Agency and
Social Fund Inspector.
Case 1 (cont.)
The claimant's application for a Budgeting
Loan was decided on 28.12.00. Their Social Worker sought advice
and an application for a Community Care Grant was recommended
as well as a review of the decision.
The claimants were left without a mattress
over the Christmas and New Year period due to the necessity to
put in a further claim and wait for a decision. Previously the
Benefits Agency was under a duty to consider a grant as well as
a loan on each claim.
3. Repayment rates causing hardship
The repayment period of 78 weeks causes hardship
to Income Support claimants and creates unaffordable repayment
levels. Income Support is a subsistence benefit which fails to
cover the bare necessities of outgoings hence the need for the
Social Fund. A repayment rate of 15 per cent represents a substantial
proportion of net income for Income Support claimants with some
claimants being offered repayment rates of 25 per cent. Claimants
needing loans for urgent requirements may be tempted unwisely
to agree to this repayment only to find themselves in trouble
with other priority payments such as fuel and rent. As Debt Counsellors
we believe the Benefits Agency is recovering a larger proportion
of debt to income than we would offer to other creditors. Over
50 per cent of clients receiving money advice from Rotherham Metropolitan
Borough Council with Social Fund loans required repayments to
be reduced as they were unable to meet priority payments on fuel,
utilities bills and had often got into arrears as a result. This
is creating, rather than reducing, a spiral of debt. Such claimants
are forced to find money in their budget through reducing spending
on food and heating leading to poor diets and poor health.
Case 2
Lone parent with 3 children under 10 seeking
help with debt.
A full detailed analysis of expenditure left
client with only 73p available, yet the Social Fund repayment
was set at £14.23 weekly (out of £148.30). The Money
Advice Service asked for a review but the minimum the Benefits
Agency would accept was £9.52 per week. This still left client
with a weekly deficit of over £8. The client has to pay £11.32
for community heating weekly over and above electricity, otherwise
they face repossession. The client had also been fined for missing
payments on their TV licence.
Case 3
A couple, one on Incapacity Benefit and Disability
Living Allowance were repaying a Social Fund loan at £16
per week out of Income Support of £113.70. The clients' expenditure
showed only £12.70 surplus before paying creditors. The Social
Fund loan had to be reviewed to £5.69 weekly.
Case 4
A lone parent with 2 children under 16 had
a Social Fund loan deducted at £13 per week from total income
of £130 weekly. The client already had direct deductions
—water payments at £6.50 weekly and gas at £11
weekly—they also had an electric token meter by which they
will be paying more for electricity consumption.
4. Low and Unrealistic Awards
Many Social Fund awards, especially Community
Care Grants, are extremely low in comparison to the request. In
addition they are often wholly inadequate to provide items agreed
to be essential.
Case 5
Claimant, aged 79 lost most of their possessions
when their sheltered accommodation was damaged by contaminated
water in the recent floods. Their insurance ran out one month
earlier. The Community Care Grant application was for £3,415
and £1,206 was awarded. The amount granted for carpets to
cover 6 rooms of 82 Square yards was £278. No amount was
allowed for fitting of carpets, underlay or fitting and connection
of new cooker and washing machine.
Decisions by Social Fund Inspectors are more
realistic—in 1998 a Social Fund Inspector awarded a client
carpet at £4 per square yard and a recent SF1 decision awarded
a client £150 for a living room carpet in November 2000.
However many claimants do not know of the appeal process or are
unable to take their case further.
Case 6
A pensioner couple with dependant child applied
for a Community Care Grant for a new bed and living room carpet.
Between them the couple suffered from diabetes, glaucoma, cataracts
and asthma. Their bed was 20 years old, in poor condition and
difficult to sleep on. The application was turned down with the
Review Officer stating that the client would have received a redundancy
payment 4 years ago and if their bed was so old and needed replacing
they could have spent the money on it at that time.
The Social Fund Inspector found the Review Officers
decision not sustainable on the evidence and awarded £300
for a new bed and £150 for a living room carpet. Cases like
this reinforce the impression that Social Fund Officers seek spurious
reasons to reject claims as budget limitations prevent them from
treating claims on their individual merits.
Case 7
A lone parent, practically house bound with
epilepsy, asthma, muscle disease, arthritis and anaemia requested
a Community Care Grant for microwave, washing machine, cooker
and carpets throughout. It was initially turned down and on review
a washing machine only was allowed and £300 only for carpets
for a 2 bedroomed home.
5. Funeral expenses payments and the exclusion
of close relatives
Many relatives who consider themselves "next
of kin" to the deceased are finding themselves excluded by
the Benefits Agency as eligible persons. This causes financial
hardship and great distress at a very difficult time. Relatives
are being forced to go through the appeal process whilst in mourning
and face insecurity as to how the funeral will be paid for. They
feel this is an indignity to the departed person.
Case 8
A client had been brought up by their Grandmother
and called her Mum. The client had cared for the Grandmother in
their home for 23 years before the Grandmother died aged 100.
The nearest relatives—2 daughters—were
unwilling to pay for the funeral. One lived abroad and had not
seen her mother for 32 years—the other had not spoken to
her mother for 13 years. The client was refused a Funeral Payment
as "it was not reasonable for them to take responsibility
for the funeral". The client was too distressed to take up
an appeal.
Telling a grieving relative that it was not
reasonable for them to arrange the funeral adds insult to injury.
These cases cause more individual distress than any other area
of the benefits system.
Case 9
Client's son hanged himself. Client made a
claim for a funeral grant. The Benefits Agency said the son was
not estranged from his partner at the time of death and turned
the claim down. The ex-partner had not even attended the funeral.
Case 10
Client's daughter killed herself at 14. The
client was in a low paid job but on qualifying benefits. The client
was separated from the father and had no knowledge of his whereabouts.
The father hadn't seen the daughter for 13 years. The client had
to trace the absent parent because if he was in work he would
be treated as the liable person.
Janet Scott
Manager
January 2001
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