APPENDIX 25
Memorandum submitted by Manchester Advice,
Manchester City Council (EDP 34)
INTRODUCTION
Manchester Advice is Manchester City Council's
advice service, employing over 100 staff. Each year our service
deals with in excess of 60,000 benefit enquiries. Advice to people
on incapacity benefits is a main area of work for our service.
Welfare to work benefit issues have been a key area of publicity,
information and training over the last six years and we have new
specialist services for this work.
SUMMARY
A Manchester Advice delivers a range of
activities through our main service and our "Accessing Work"
project to increase employment rates for disabled people, as an
integral part of Manchester's Community Strategy and Public Service
Agreement.
B Context
— Support for disabled people moving
into work is the most complex and problematic strand of the Welfare
to Work anti poverty strategy. But concerns for disabled people
have tailed behind other aspects of welfare to work policy, with
missed opportunities, lack of understanding of the practical effects
of policy and failure to resource initiatives.
— Welfare to work strategy for disabled
people involves advising not just at the transition to full-time
work, but at all stages on the pathways towards work, including
helping people stabilise current situations, so that they can
begin to think about the possibility of working, and advice to
help people stay in work.
C Services
— Benefits advice is a key component
of provision. Disabled people face the most complex benefit issues.
Advice in this field requires specialist training and experience
based on principles and models of good practice already working
in the local authority and non statutory services, but in need
of new and stable funding.
— Welfare to work strategy for disabled
people needs both generalist and specialist employment support
services.
— Local authorities' key role within
the welfare to work strategy for disabled people.
— JobCentre Plus. The limited training
and skills of staff can be addressed by drawing on the benefit
advice expertise of local authority welfare rights services, disability
awareness training and expanding the Disability Employment Advice
(DEA) service. We are also concerned about the planned staffing
levels, the need to expand, rather than mainstream, current outreach
provision and the need to improve service to black and ethnic
minorities.
— Employers are the biggest barrier
requiring proper resourcing and expansion of marketing sections
within statutory and non statutory employment services.
D Benefits
— Benefits & tax credit system.
Policy makers have not sufficiently understood the complexity
of benefit interactions to make reforms effective. There is a
range of financial disincentives within the benefits system, including
disruption of income and a system of incapacity and disability
assessment under which work moves put income at risk.
— Incapacity for work. Rigid rules
of entitlement often run counter to the support and flexibility
needed to move towards or into work. Occupational therapists,
DEA's and specialist disability employment advisers, rather than
doctors, have the skills to assess incapacity for work.
— A wider vision of the worth and legitimacy
of voluntary work as a pathway towards paid work is needed.
— The effectiveness of Permitted Work
as a pathway to work is severely limited by the failure to address
the two-tier income disregard rules.
— Using work as a trigger to review
Disability Living Allowance is a disincentive to work.
— Earnings disregards for income-based
benefits provide very little incentive for most claimants to use
part-time work as a pathway to full-time work.
— We welcome the extension of the system
of housing costs run ons, but are disappointed that the Job Grant
system is being extended, rather than widening the current Lone
Parent weekly benefit run on to other claimant groups.
— The tapers for housing benefit and
council tax benefit, need for targeted publicity and independent
advice on the new Working Tax Credit and improvement of delivery
by benefit offices of key procedures, such as the "52 Week
Linking Rule", all need to be addressed.
This submission is grouped in the following
way:—
Section 1 Manchester Advice—more details
of our involvement on welfare-to-work issues for disabled people.
Section 2 Context—The need to look
at a wide range of issues affecting welfare to work for disabled
people. Includes reconsidering pathways towards work and overcoming
benefit barriers.
Section 3 Services—The best and appropriate
forms of support. Issues for Jobcentre Plus, New Deals and Job
Brokers, voluntary agencies and specialist services, local authority
services, health services, partnership approaches, supported employment,
and employers.
Section 4 Benefits—The benefit barriers
facing disabled people moving into or keeping work. What needs
to be done about them. The role and scope of extra payments when
moving into work. Particular problems for particular groups.
MANCHESTER ADVICE
As well as advising and doing casework with
individuals, we have run numerous workshops and training sessions
on welfare to work benefit issues for claimants, employment project
and service workers, benefit advisers, education advice and guidance
workers, workers in mental health, physical disability and learning
disability support services. We network with the local agencies
delivering employment training, advice and support to disabled
people and played a major role in the development of Manchester's
Joint Investment Plan Welfare to Work for Disabled People.
Manchester Advice now includes a project, called
"Accessing Work", funded under the European Regional
Development Fund and Neighbourhood Regeneration Fund. It integrates
with Manchester's Community Strategy and "New Commitment
to Neighbourhood Renewal" action plan by assisting the most
disadvantaged people to overcome the social and financial barriers
which prevent people from moving towards work. It is estimated
that 14% of Manchester residents have some form of disability,
and the number of economically inactive residents on Incapacity
Benefit or Income Support is three times that of people signing
on as unemployed.
This project seeks to engage with those groups
of people by targeting them at locations they already use, such
as health centres, supported employment and training projects
and drop-in centre facilities and by working in partnership with
existing regeneration teams and employment/training organisations.
It provides advice and support to individuals and organisations
on overcoming the barriers to work, such as doing financial "better-off"
calculations, giving advice on tax credits, permitted work, job
grants, benefit run-ons, or assisting to re-negotiate debts or
resolve housing problems—any action which will ease the
transition, dispel myths or provide tailored support to enable
someone to make a successful move towards work.
This contributes to Target One of Manchester's
Public Service Agreement which is to increase the employment rate
for the city overall demonstrated by narrowing the gap between
the employment rate for Manchester and the UK rate. Disabled people
are a target group within this agreement.
CONTEXT
Support for disabled people moving into work
is the most complex and problematic strand of Welfare to Work
anti-poverty strategy. It involves:—
— the most complex benefit issues;
— the deepest employer prejudice (not
just due to time out of work, but because of discrimination, a
lack of understanding, and concerns about expense, sick pay and
attendance);
— the need for specialised, high quality
employment advice, guidance and support;
— multi layered issues of confidence;
— addressing labour market deficiencies,
with demand-side measures need to increase the availability of
socially useful work;
— addressing the need for family-friendly
practices and childcare needs too.
Concerns for disabled people have tailed behind
other aspects of welfare to work policy. For example, the 1998
Green Paper on Welfare Reform was very limited on this issue.
It was disappointing to people working in the field of disability
and employment, and revealed a lack of information and understanding
of the area. There has been some progress since, but it has been
slow, with missed opportunities (for example with the Permitted
Work changes, Joint Investment Plans, and the minimum wage). Due
to a lack of understanding on the practical effects of policy
announcements, there has been a failure to sufficiently underpin
initiatives with funding. Nevertheless, the latest upsurge of
interest is welcome. The recent Green Paper shows much more understanding
of the range and complexity of issues. It has some significant
innovatory proposals, but also proposes unhelpful new penalties.
Welfare to work strategy for disabled people
involves more than just advising people who are making the transition
into full-time work. It also includes advising people on how benefits
are affected by pathways towards work. These include voluntary
work, part-time paid work, training and study. Also advising people
who are not even contemplating a pathway on their current benefit
situation. This means stabilising the person's current financial
situation. Reducing financial stress gives people time and energy
to begin to think about moving life forward. For example, dedicated
welfare to work advice sessions for clients of statutory and non-statutory
drugs and alcohol services are exactly about this. Finally, the
advice strategy is also about keeping a job, changing hours or
changing work.
SERVICES
Benefits advice as a key component of provision
Income is key issue for people considering moves
into work so benefit advice services are essential to complement
employment/training advice and guidance services. This is vital
for people on incapacity-based benefits and disability benefits,
because they face the most complex benefit issues. So is benefits
advice for disabled people moving into work a specialism? Our
view is that it is a field that requires extra training and a
build up of experience.
There are principles of good practice when maximising
the opportunities available to individuals in the current benefit
system through:—
— Clear accessible information on how
work, training and study affect benefits.
— Individual advice on benefit options,
including calculation and comparison of income before and after
a move into work, training or study, also the financial outcome
of a return to out of work benefits.
— Help and support with claiming procedures,
including timing of claims, help with claim forms etc.
In our experience, the most helpful model of
advice and support is based on the following principles:—
— Active involvement of claimants,
recognising and building on their existing experience of the benefit
system, developing confidence and independence.
— Recognition of the complexity of
the benefit system and the need to use the expertise and experience
of specialist advisers to support claimants when they are deciding
on the best option to suit their needs.
— Independence from Jobcentre Plus,
because advice and support involves checking and challenging information
and decisions of the benefit delivery services.
Advisers in local authority and non-statutory
advice services have the necessary "across the board"
knowledge of the benefit system, expertise with claiming procedures
and independence. Employment projects and services, other services
that assist claimants with work, training and study opportunities
need to liase with advice services for training on benefit issues
and advice to individual claimants. Dedicated welfare to work
benefits advice services can offer a great deal to employment
projects/services, benefits delivery services and government policy
makers.
There is a need for new and stable funding for
this work. For example, local non statutory agencies specialising
in employment advice and support for disabled people have been
asking for advice sessions for several years and these have only
been delivered in some areas where Neighbourhood Renewal Funds
have been secured. In other cases, long-term expertise and good
practice has been lost because of the precarious funding position
of such agencies.
The "Accessing Work" project of Manchester
Advice is most successful when working closely with organisations
which have been engaged in an intensive programme of supporting
someone into work. Still, the numbers of disabled people who actually
make it into a full-time job are small—the process is time-consuming
and long-term. There are particular groups whose disabilities—for
example, people with drug or alcohol problems—are such that
the last thing the clients and staff involved want them to do
is get a job and disrupt the stability which is keeping them dry
or clean. They would have severe problems in holding down a job
at this stage. However the benefits system still threatens to
undermine the efforts made to move disabled people to work due
to the continuing practical administrative difficulties it can
cause.
For example, a local mental health employment
organisation assisted someone with severe depression to get a
full-time job. She had to wait eight weeks for Disabled Person's
Tax Credit to be paid, in spite of stressing the urgency of her
need, early communication from the client and her adviser and
intervention from support work staff. She also had to wait for
six weeks for her Disability Living Allowance to be paid into
her bank account—as it had stopped when her Income Support
order book stopped. There are even difficult practical problems
with the form that Inland Revenue uses for getting wages information
from personnel departments. The form only has the National Insurance
Number on the front page. When information is faxed across, pages
are often not matched up and information is not acted upon.
As another example, a group of severely mentally
ill people who are accomplished artists want to set up a Community
Arts organisation where they can take art commissions on a self-employed
basis as and when they feel well enough, on a flexible basis.
The disruption to benefits and lack of profit in this is too much
of a deterrent for this to get off the ground. We explored what
would happen if the organisation set up as a company and paid
people as employees. However with the national minimum wage and
most people being on means-tested benefits, plus fears of losing
incapacity-based benefits, there is no feasible way yet found
to make this transition a reality.
Employment services—generalist or specialist
Local authorities have worked in partnership
for many years with employment advice and support projects and
services for disabled people. We have learnt a lot from these
organisations' expertise, based on their specialist skills and
accumulated experience in the field. We have also learnt that
disabled people need both generalist and specialist organisations.
Choice is needed. Some disabled people prefer mainstream services,
and don't want a particular label. Others want specialist services
because they need to be confident that the specific problems of
disabled people will be recognised, understood and addressed.
But there is also a continued need for services which specialise
in particular disabilities, for example mental health problems
(where there is the highest level of unemployment and biggest
issues of discrimination), learning disabilities, visual impairment,
and hearing impairment. Apart from the issue of choice specialist
services provide the expertise on which good practice in mainstream
services relies.
A further concern is with the operation of the
Joint Investment Programme (JIP) Welfare to Work for Disabled
People. This has been unresourced, causing major difficulties.
Current efforts focus on trying to mainstream the programme within
the Local Strategic Plan. Local Authorities would also like to
be able to explore Freedoms and Flexibilities under Public Service
Agreements. Manchester City Council asked for agreement to vary
the amount of earnings someone could keep in Housing Benefit or
Council Tax Benefit and to get a local agreement about voluntary
work/permitted work—so these would not trigger a Personal
Capability Assessment. Both were practical suggestions and would
have made a difference, but have not been secured to date. Large
employers such as local authorities and NHS should also be acting
proactively employing disabled people themselves and bidding for
resources to support this work properly. Disabled people have
tended to prefer a single point of contact with a unit driving
forward recruitment and good practice, as well as a disabled workers'
forum in each department and fresh measures to reward users for
their involvement.
Jobcentre Plus
Our concerns include the limited training and
skills of staff, who need awareness training on mental health,
learning disability, physical disability, and sensory impairments.
They also need more thorough training on incapacity-based and
disability benefits out of and in work. Our consistent experience
is that social security staff have knowledge in limited areas,
not "across the board" understanding. There are many
instances of basic errors. This is partly because the focus has
been on delivery of specific benefits. Expertise in training on
an "across the board" understanding of interaction between
benefits lies in services like local authority welfare rights
services. Within Jobcentre Plus, development of specialist personal
advisers around employment advice and support for disabled people
should come through expanding the Disability Employment Advisers
service. They have the necessary expertise, a point which is recognised
in the recent Green Paper.
There is the need for an adequately staffed
and resourced Jobcentre Plus service. This work is time-consuming
work, if it is to be done properly and deliver results. There
are concerns about the levels of Jobcentre Plus staffing, with
the recent recruitment freeze, and attendant problems of morale.
More need to be done on the liaison arrangements for Jobcentre
Plus, to more adequately engage with local partnership groups.
Action Teams for Jobs has brought much better
outreach work. However, these may now be under some threat, if
posts were to be mainstreamed. Outreach contracts have recently
been awarded for independent groups to work with Black and Minority
Ethnic customers. This is a welcome development, but it is at
a very early stage. Black and Minority Ethnic customers have often
been referred away to ESOL courses without further support. There
remains a lack of translated materials. New Deal for Disabled
People now involves Job Brokers. However, it lacks adequate outreach.
Employers
A key focus should be on employers as the biggest
barrier. Jobcentre Plus and non-statutory employment services
have marketing sections specifically to contact employers. They
seek to dispel myths about disabled people, encourage recruitment
of disabled people and give appropriate support in workplace.
But all acknowledge that they do not have staff resources to do
this adequately. This type of service needs to be properly resourced
and developed because, even with anti-discriminatory legislation,
contact with employers is the only way to effectively reduce barriers.
BENEFITS
Benefits and tax credit system
Entitlements are complex indeed! This is partly
due to the fact that people are usually on a mix of benefits and
have to deal with benefit interactions, and the knock on effects
to passported benefits, particularly NHS benefits. So far policy
makers have not understood or recognised this complexity sufficiently
to make reforms really effective (for example, in the recent permitted
work changes).
Financial disincentives are not only about being
better off in work. They also involve the pressures of income
insecurity. This includes:
— disruption of income—when income
changes, benefit adjustments are made, often with delays, or "linking
rules" are confusing;
— tight and precarious budgets;
— a system of incapacity and disability
assessment which puts income at risk if a person makes a move
towards work—because the Personal Capability Assessment
may stop benefit entitlement, or disability benefits may be reviewed;
— feeling under-valued and unrewarded
for work—for example, when doing voluntary work or permitted
work.
Incapacity for work
Rigid entitlement rules often run counter to
the support, flexibility and encouragement needed to move towards
or into work. For example, access and continued access to benefits
based on incapacity for work is decided by a procedure called
the Personal Capability Assessment (PCA). Very many disabled people
who have been through the PCA procedures speak of it as a deeply
stressful experience, because of the nature of the process coupled
with the effect the outcome will have on their income. It has
the following negative effects on work plans:
— Study, voluntary work and part-time
"permitted" work are all allowed by the incapacity for
work rules. But people are discouraged from taking up these opportunities
because they can be used as evidence of ability to do the functional
activities on which the PCA is based. Because of their anxieties
about the PCA people always ask in workshops or advice sessions
whether voluntary work, therapeutic work or study will provoke
an assessment or affect the outcome of a future PCA. Because no
assurance can be given on when or if the PCA will be used or on
the outcome, people's anxiety continues and undermines their moves
towards work, despite offers of advice and support. The Jobcentre
Plus network routinely advises people that undertaking allowed
activities, such as study, may affect their benefit.
— The timing of a PCA can have a devastating
effect on people exploring the possibilities of moving into work,
undoing progress they have made and worsening their health. Employment
projects and services have seen their work with individuals undermined
because the person has been called for a periodic review under
the PCA to see if they are still incapable of work. The test is
particularly hard for people with mental health problems, especially
as the mental health assessment, for most people, has to be done
at a medical interview with a medical service doctor.
— Employees who are long-term sick
have to go through the PCA after 28 weeks of sickness, they can
be found capable of work under the test despite being still unable
to do their job. This creates problems and pressures for people
when they are negotiating with their employer about redeployment
or continuing their job on a part-time basis.
— It is disappointing that when someone
starts permitted work, routine medicals will go ahead as planned,
rather that building in a buffer time zone to allow people to
get over the initial stresses of starting limited paid work. A
reasonable buffer zone would be a year.
The recent Green Paper sees an expanded role
for occupational therapists via NHS rehabilitation services. We
need to be clear that doctors haven't got the appropriate skills
to assess capacity and incapacity for work. It is Occupational
Therapists, Disability Employment Advisers and employment advisers
with a disability specialism who have the training.
Voluntary Work
The value of voluntary work is not just as a
pathway towards paid work. It also has a vital role in terms of
building and sustaining communities. We need a wider vision of
the worth and legitimacy of voluntary work. Many people on incapacity-based
benefits are undertaking it as a covert activity. Or they may
see it as too risky to undertake, because although voluntary work
is allowed, there are concerns that it will be used as evidence
for the Personal Capability Assessment leading to withdrawal of
benefit. For some disabled people voluntary work may be the most
positive, fulfilling and valuable way of working.
Permitted Work
Disabled people need a pathway to work where
they can test out capacity, build up confidence, and gain skills
and experience. The effectiveness of "permitted" work
as a pathway back to work is severely limited because of the two-tier
income disregard rules and the failure to address their interaction.
This is an issue for nearly all the disabled people we see. It
is rare for advisers to see people who don't have an income-based
benefit. The rules stop people building up work hours. In practice
they have to make a leap from about four hours work a week to
16 or more hours a week. This acts as a huge disincentive.
The details are as follows:
— The majority of people on incapacity-based
benefits cannot benefit from the permitted work earnings limit
of £67.50 per week, because they get income-based benefits
with a lower earnings disregard. This means poor financial returns
for work effort and income disruption as benefits are adjusted.
— The time limit for work of under
16 hours and earnings up to £67.50 weekly has reduced rather
than increased the chances of a return to the labour market. It
appears to disregard the reality of the job market and the way
that disability and health conditions impact on job prospects.
— The new rule on work for maximum
earnings of £20 a week with no time limit or hours limit
will have a harmful effects on people currently earning more than
£20 a week when the transitional protection of a year runs
out.
Employment projects and services are totally
frustrated by the rules which stop any kind of progression in
terms of building up hours. They have to treat service users equally,
so can't have differential provision where some can earn £67.50
and most only earn £20. This combines with payment of at
least the minimum wage. It is therefore problematic to offer an
appropriate package of work. Some projects prefer to use voluntary
work because it is more flexible, but it creates other problems.
Service users reach a point where they want to be paid adequately
for they work they do (a "proper job"). But the type
of work has to be limited, so that it meets requirements that
it is not a job someone would normally be paid for.
Six month time limits affect many people now
undertaking permitted work. These:
— Make it even more difficult for people
on incapacity-based benefits to secure employment, adding to the
doubts that an employer may already have about employing someone
who is disabled or has diagnosed health problems. Workers in agencies
providing employment training and job search help for disabled
people consistently report on the difficulties in finding permitted
work opportunities because of discrimination against disabled
people in the job market.
— There is no guarantee that a job
of 16 hours or more a week will be available or have been secured
by the end of six months or a year. Listening to workers in agencies
providing employment training and job search help for disabled
people has taught us that helping to secure work is complex and
time-consuming, the time taken will vary greatly from individual
to individual but is likely to be more than a year. Having current
and ongoing work experience enhances job prospects for disabled
people. There are variations in the time it takes to build up
skills and work experience, depending on the job and the individual.
But people who do not secure a job by the end of the time limit
will have to stop work and disrupt their contact with the job
market, with the consequent detrimental effects on their confidence,
job prospects, health and wellbeing.
— The time limit has added to the stress
of people who are already coping with the anxiety and stress associated
with trying work. This is a particular concern for people with
a mental health diagnosis.
Our proposal is to equalise the permitted work
earnings disregard at £67.50 and to remove the current time
limits. Moving people forward involves an individually based programme.
People will need varied amounts of time on permitted work. It
also depends on the job market and on finding a sympathetic employer.
Loss of Disability Living Allowance (DLA)
Entitlement to DLA is not based on a test of
incapacity for work, it can be paid both in-work and out of work.
Historically the mobility component of DLA is rooted in the principle
of helping disabled people with travel costs to work. However,
claimants have found that entering work can trigger a review leading
to potential reduction, or loss, of their DLA on the assumption
that their health must have improved or the effects of their disability
lessened. Advisers also report DLA being stopped automatically
when claimants start work, without investigation of whether care
or mobility needs have changed.
Fear of losing DLA is big concern for people
because of the impact on their in-work budget. DLA is real extra
income because it is ignored for income-based benefits. It helps
recipients qualify for higher levels of HB and CTB. It helps with
the extra costs arising from disability. It is additional income
for people who are more likely to have low earnings, because of
more limited access to work arising from employer perceptions
or the impact of disability on hours of work. It also acts as
a stable core element of income which tides people over when income
is disrupted or varies.
Disruption of DLA shortly after entering work
has a highly damaging effect on disabled people already coping
with the budgetary disruption attendant on moving from benefit
to wage income and the stresses of adapting to their new working
life. Where the mobility component of DLA is involved, ability
to pay work travel costs is undermined. Currently, our advisers
cannot give people any assurance that their DLA will not be disrupted
by work, this has a negative effect on work incentives. Our proposal
is that there should be a buffer zone to allow people to settle
into work before DLA Unit enquires whether their care or mobility
needs have changed. A reasonable period would be a year.
Earnings disregards for income based benefits
There are rules which allow claimants who sign
on unemployed or claimants who are on the sick, lone parents or
carers to work part-time whilst on benefit. This usually involves
working less than 16 hours a week. There is very little financial
incentive for claimants on the income based benefits Income-based
Jobseeker's Allowance, Income Support, Housing Benefit or Council
Tax Benefit to work part-time because only a small part of their
weekly earnings is ignored. Only a few hours can be worked without
exceeding the disregards. They are a low reward for work. Often
they are not enough to cover work expenses. They give no incentive
to increase work activity to build up work experience since the
claimant gets little or no extra income from increasing their
hours of work and has to suffer the problems of income disruption
through having their benefit adjusted.
Childminders currently have the most flexible
and supportive rules on earnings. Only a third of earnings, after
tax, national insurance and half of private pension contributions
have been deducted, are treated as income; the appropriate earnings
disregard is applied and anything left affects benefit. Childminders
working 16 hours or more a week can choose whether to claim Working
Families Tax Credit or Disabled Person's Tax Credit instead of
their out of work benefit. However the rules for the new Working
Tax Credit, from April 2003, are set to discard the favourable
treatment of income for childminders.
For severely disabled people who get income-based
help with care costs from the Independent Living Fund the rules
about their earnings, or their partner's earnings, are much more
generous. From April 2002 all earnings are disregarded for the
person and partner. This gives a welcome example of a very positive
incentive.
Housing Benefit and Council Tax Benefit run-ons
We welcome the extension to people just on Incapacity
Benefit or Severe Disablement Allowance. These people are often
only just over the income Support and must meet a large portion
of their housing costs through Housing Benefit and Council Tax
Benefit.
Other run-ons/Job Grants
We welcome the rationalising of financial help
to bridge the gap between benefit and wages, but are disappointed
that instead of extending the lone parent run-on to disabled claimant
groups, the Green Paper proposes to scrap it in favour of extension
of Job Grant system. The current rates for incapacity-based benefit
recipients and the proposed rate for people with children, are
lower than benefit rates for many claimants. Whether it is an
adequate substitute appears to depend on the Inland Revenue's
promise to deliver Working Tax Credit speedily which in itself
depends on customers' abilities to fill in the claim forms accurately.
Our advisers are already reporting that customers are having problems
filling in the tax credit forms. The Job Grant system excludes
under 25s. This brings particular problems because parents on
benefit are unable to support them during transition period and
parents of disabled young people more likely to be on benefit
or lone parents.
Back To Work Bonus
Claimants on Income Support or Income-based
Jobseeker's Allowance who do exceed the earnings disregards and
have their benefit reduced by part time earnings, may be able
to claim back 50% of the lost benefit in the form of a Back To
Work Bonus, when they move off benefit into work. Claimants are
consistent in their view that the Back To Work Bonus does not
give them any incentive to do part time work on benefit.
Poverty Traps
The tapered way in which housing benefit (HB)
and council tax benefit (CTB) are withdrawn when income is above
Income Support or Income-based Jobseeker's Allowance (JSAIB) level
effectively taxes net income increases at 85%. People with a disability
or mental health problem living in supported accommodation face
a more severe HB/CTB poverty trap because of the higher housing
costs. Rules for tenants of private landlords mean that housing
benefit is calculated on a lower "local reference rent"
for the area, rather than the actual rent, leaving the tenant
to make up the shortfall from their income. The highest shortfalls
resulting from this system are for people age under 25. There
is no long-term help with mortgages for owner occupiers who move
off Income Support or Income-based Jobseeker's Allowance.
Tax Credits
Disabled Person's Tax Credit (DPTC) replaced
disability working allowance, a benefit which was little known
and claimed by only about a third of the estimated number of potential
claimants. DPTC has been given very little publicity compared
to Working Families Tax Credit. The eligibility rules are too
limited for DPTC and its transferred role as part of the new Working
Tax Credit. We welcome the newly proposed 12 month £40 a
week top-up and the moves to Child Tax Credit and new entitlement
for childless 25+s in Working Tax Credit. People will need help
understanding new system of Working Tax Credit and filling in
forms. Over-stretched services would need to expand to deal with
this effectively.
Losing Protected Rates of Benefit
Benefit changes which reduce entitlement create
barriers for claimants trying to move into work because they will
lose "transitional protection" as a result of coming
off benefit. For example: lone parents who have been on IS since
before 6/4/98 lose their lone parent family premium if they come
off IS for work or study reasons; claimants of incapacity benefit
who also have a private or occupational pension will be penalised
if they work for more than a year and then have to reclaim benefit
because pension over £85 will be offset against their benefit.
Smoothing Transition
Whether changes to benefits are smooth or disruptive
is partly dependent on the delivery of procedures by benefit offices
which are affected by staffing levels, training and updating of
staff and internal organisation. The operation of the "52
Week Linking Rule" for people moving between incapacity based
benefits and work or training schemes is an example of the problems
that can arise:
— Jobcentre Plus network offices have
not been consistently aware of the linking rule or that it applied
to people on training schemes. Some offices failed to issue claimants
with the standard information letter and the response form which
is used to tag the claimant's computer file.
— The information letter is confusing
for claimants because it fails to distinguish between information
relevant to people starting training and information relevant
to people starting work. Some of the information is incorrectly
based on the previous eight week linking rule not the 52 week
rule.
— Some claimants have been asked to
provide a medical certificate when reclaiming benefit, some have
been told they don't need one.
Jean Betteridge
Network Team
7 January 2003
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