|Welfare Reform Bill - continued||House of Commons|
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TERRITORIAL APPLICATION: WALES
47. The Bill affects England and Wales in the same way. It does not contain any measures which affect the powers of The National Assembly for Wales.
PART 1: Employment and Support Allowance
Clause 1: Employment and support allowance
48. This clause sets out the entitlement conditions of the proposed employment and support allowance. This would introduce a new benefit structure which means that there would be both an income-related allowance and a contributory allowance within the same benefit, similar to a jobseeker's allowance (except that there would be no time limits for either strand). So, in addition to satisfying the basic conditions of entitlement, a person would need to satisfy either the national insurance contribution-based tests or the income-related tests in order to be entitled to employment and support allowance. The contribution-based tests would be the same, in substance, as apply now for incapacity benefit (and which are set out in the Social Security Contributions and Benefits Act 1992, section 30A and Schedule 3). The income-related tests would be the same, in substance, as apply now for the purposes of income support. The details of these tests are set out in Schedule 1.
49. There would be an alternative to the National Insurance contribution tests for those who were under 20 years old when their period of limited capability for work began (or 25 years old in certain circumstances). If they had had limited capability for work for the preceding 196 days and satisfy other conditions, they would not have to satisfy the contribution conditions to get entitlement to the contributory allowance. This is to ensure that young people, who may not have had the opportunity to build up a sufficient contribution record, would not be excluded from the non means-tested allowance. Again, this is similar to the provisions for young people currently in incapacity benefit, as set out in the Social Security Contributions and Benefits Act 1992, section 30A.
50. A person also has to satisfy the basic conditions mentioned (see subsection (3)). Subsection (4) states that a person must be limited in their capability for work because of their physical or mental condition so that it is not reasonable to require them to work. Further provision about the test to assess whether this is the case is made in clause 8.
51. Clauses 2 and 3 set out how the amount of contributory employment and support allowance would be calculated. Subsection (1)(a) of clause 2 provides that the calculation is begun by taking such amount as may be prescribed. It is expected that this amount will be age-related in the assessment phase on the same lines as contribution-based jobseeker's allowance now, but that it will be universal for all ages once the assessment phase (see below) is complete.
52. Once the assessment phase has been completed (the length of which will be determined by regulations, with a proposed length of 13 weeks) a 'work-related activity component' or a 'support component' will also be added on top of the prescribed amount. Regulations may disapply the requirement to wait until the end of the assessment phase to become entitled a work-related activity component or support component. A person will be entitled to a support component if he or she has limited capability for work-related activity (see clause 9). A person will be entitled to a work-related activity component if he or she does not have limited capability for work-related activity.
53. Sums may be deducted from the amount of contributory allowance in respect of certain payments. It is intended that regulations would prescribe the same deductions as those which are taken into account for the purposes of incapacity benefit currently. If these payments were over a certain amount, it is intended that the amount of employment and support allowance payable could be reduced by a certain proportion. For example currently an amount equal to 50 per cent of certain pension payments over £85 per week is deducted from the amount of incapacity benefit payable. In addition, deductions are also made in respect of local councillors' allowances. This is set out in the Social Security Contributions and Benefits Act 1992, sections 30DD and 30E.
54. This clause provides for the calculation of the amount of an income-related employment and support allowance. Entitlement is based on rules similar to those which apply for income support, which the income-related allowance would replace for people with a health condition or a disability.
55. This clause provides that the amount of the income-related allowance is the "applicable amount", if the claimant has no income, or the difference between the claimant's income and applicable amount, if the claimant has income. An applicable amount is the weekly amount a person would receive if they had no income at all. For example a single person aged over 25 years old would be entitled to income support of £57.45 per week (April 2006 rate) but this would be reduced to £47.45 if they had an income of £10 per week. Applicable amounts can vary; for example, dependent on whether the claimant has a partner. Like the contributory allowance, there is a proposed assessment phase of 13 weeks. After the assessment phase, the amount of the work-related activity component or, if the claimant satisfies the relevant test, the support component will be included in the applicable amount.
56. Subsection (2)(a) provides the power to prescribe amounts to be part of the applicable amount. This includes, for example, where the claimant is an owner-occupier with housing costs. It is intended that additional amounts will be prescribed in respect of those costs, such as mortgage interest, ground rent or service charges. These are similar to the arrangements which currently apply to income support. The power would also allow for other additions to be made in future without the need for further primary legislation.
57. In addition to housing costs the power could also be used to include certain premiums. It is intended to pay an equivalent to the enhanced disability premium, severe disability premium and the carer premium using the same rules as for income support. In April 2006 the rate of the enhanced disability premium was £11.95 for a single person and the £17.25 for a couple; the severe disability premium was £46.75 for a single person and £93.50 for a couple. The carer premium was worth £26.35 per week.
58. It is not intended to use the powers under this clause to make any provision for children, as provision will be made by child tax credits, which are administered by Her Majesty's Revenue and Customs.
59. Subsection (3) provides the power to prescribe nil as an applicable amount. For example, paragraphs 7 and 8 of Schedule 7 to the Income Support (General) Regulations 1987 (S.I. 1987/1967) currently prescribe a nil amount for the purposes of income support in relation to certain prisoners and to members of religious orders who are fully maintained by their order. The policy intention is that such people will be treated in the same way for the purposes of income-related employment and support allowance.
60. For both the contributory and income-related allowance, clauses 2 and 4 provide for entitlement to the work-related activity and support components to be backdated if, as the regulations provide, the assessment phase is extended (clause 21(2)). For example, it is intended that this should be done where it has not been possible to complete the medical assessment process within the proposed 13 week period of the assessment phase. In such cases if, the claimant is subsequently determined to have limited capability for work, then entitlement to the relevant work-related activity or support component will be backdated so that the claimant will receive the relevant work-related activity component or support component as if the assessment phase had ended at the end of week 13 of entitlement to an employment and support allowance.
61. Regulations made under clauses 2(4) and 4(6) are expected to provide that, in certain circumstances, where a person was previously entitled to employment and support allowance then the condition of entitlement to the work-related activity component and support component that the assessment phase must have ended shall be disapplied. This will mean that a claimant may be entitled to the work-related activity or support component immediately they become entitled to an employment and support allowance.
62. This clause provides for the situation where a person, due to having income exceeding the applicable amount, is not entitled to an income-related employment and support allowance in the assessment phase, but may become entitled to an income-related allowance when, at the end of the assessment phase, they become entitled to either the work-related activity component or the support component. The clause modifies section 5(1) of the Social Security Administration Act 1992 so as to enable regulations to be made to deal with this situation. Such a case may arise because a person has an income above the applicable amount during the assessment phase (which would mean that the claim would normally be rejected) but, when the applicable amount includes the work-related activity or support component, their income is less than the applicable amount. Regulations will be able to provide that such a person can make a claim and that an award of employment and support allowance could come into force at a future date, provided that certain conditions were satisfied.
63. This clause provides for cases in which a person is entitled to both a contributory allowance and an income-related allowance. In this clause the amount calculated in accordance with clause 2(1) (Amount of contributory allowance) is called the "personal rate". If the person has no income and their personal rate is higher than their applicable amount (for the purposes of income-related allowance), they get the personal rate. If the claimant has no income and their applicable amount exceeds their personal rate, they will get their personal rate, plus an additional amount of income-related allowance equal to the excess. If the person has an income, the amount payable will be the greater of his personal allowance and the amount by which his applicable amount exceeds his income.
64. Below there are some illustrations to show how this would work in the case of a person with no income. The applicable amount (which is relevant to the income-related allowance) is illustrated in grey. The personal rate (which is relevant to the contributory allowance) is illustrated in black.
Clause 7: Exclusion of payments below prescribed minimum
65. This clause would confer a power equivalent to the power in section 134(4) of the Social Security Contributions and Benefits Act 1992. The intention is that employment and support allowance may not be paid if entitlement is below 10 pence, unless payment is combined with payment of another benefit.
Assessments relating to entitlement
66. This clause provides power to set out the system for determining "limited capability for work" in regulations. Limited capability for work is one of the conditions of entitlement a claimant must satisfy before he can be eligible for an employment and support allowance (see clause 1(3)). Clause 1(4) defines limited capability for work. Clause 8 provides powers to specify the type of test that will be used to determine whether or not a claimant has limited capability for work. The test will assess a claimant's ability to carry out specified activities. The specific activities, and the extent to which a person's capability to perform them must be limited, will be contained in regulations.
67. Regulations under clause 8 may make provision about the manner in which the assessment of a person's capability for work will be performed (including providing for a medical examination to be carried out if required). Regulations may also provide for a claimant to be treated as not having limited capability for work if he fails, without good cause, to provide requested information or evidence related to his claim, or to provide it in the manner requested or if he fails without good cause to attend a medical examination he is called to attend as part of the assessment process. Clause 8 is similar to sections 171A and 171C of the Social Security Contributions and Benefits Act 1992.
68. The assessment process used to determine benefit entitlement will be carried out, wherever possible, during the first 13 weeks of a claim. Subsection (5) provides regulation making powers that will allow a claimant to be treated as having limited capability for work until the time when his capability for work is actually tested and determined. These powers may be used, for example, so that a claimant can be entitled to an employment and support allowance during the assessment phase, on the basis of medical certificates from his general practitioner, up until the point when the assessment of his capability for work is actually completed.
69. This clause refers to claimants whose physical or mental conditions are so severely disabling that it is unreasonable to require them to engage in work-related activity or to participate in work-focused interviews as a condition of receiving the full amount of employment and support allowance. A claimant of this description will have "limited capability for work-related activity". A claimant who demonstrates limited capability for work-related activity will be a member of the "support group" (referred to in clauses 10 and 11 and defined in clause 21(4)). A claimant with limited capability for work-related activity will be entitled to receive a support component in addition to the basic allowance of employment and support allowance (see clauses 2 and 4).
70. A claimant who is a member of the support group will not be subject to the requirements of clauses 10, 11 and 12 to attend work-focused health-related assessments, participate in work-focused interviews or undertake work-related activity.
71. Clause 9 provides regulation making powers that are similar to the powers provided under clause 8. Regulations will make provision about the assessment of a person's capability for work-related activity and about how the assessment will be performed (including providing for a medical examination to be carried out if one is considered necessary). Regulations may also provide for a claimant to be treated as being capable of work-related activity if he fails, without good cause, to comply with requests for information or evidence related to his claim, or to provide it in the manner requested or if he refuses without good cause to attend a medical examination where one is required.
72. This clause provides that regulations may make provision for imposing on claimants who are entitled to an employment and support allowance, but not so severely disabled as to be unable to engage in work-related activity, a requirement to take part in one or more work-focused health-related assessments.
73. The work-focused health-related assessment would be carried out by a health-care professional approved by the Secretary of State, and it is intended that it will be carried out at the same time as the assessments under clauses 8 and 9. The assessment will provide additional information about the claimant's residual functional capacity - what the claimant can still do despite the disabling condition - and information about health interventions that would improve their functional capacity.
74. The advice from the work-focused health-related assessment would be made available to the claimant and to Personal Advisers, to support actions to be taken during the main phase of the benefit.
75. The nature and content of the work-focused health-related assessment and report would be detailed in regulations. Subsections (2)(f) and (g) and (3) enable regulations to be made which have the effect of providing that if a claimant fails, without good cause, to take part in the assessment, the amount of employment and support allowance payable to him may be reduced.
76. This clause provides for work-focused interviews, which are intended to assist claimants in moving closer to the labour market. Those claimants who are members of the support group will not be subject to a requirement to attend and participate in work-focused interviews.
77. Regulations under clause 11(1) would provide for a series of regular work-focused interviews to take place after the assessment phase of the benefit for certain claimants who are entitled to the work-related activity component. Subsection (5) sets out that regulations must provide that requirements to attend work-focused interviews will cease if the claimant becomes a member of the support group.
78. It is intended that there would also be a work-focused interview during the assessment phase which would cover up to week 13 of entitlement to an employment and support allowance. This interview would have the purpose of, where appropriate, explaining the benefit and conditionality regime to the claimant and helping them think about what activities they may want to do to help them to return to work. It is intended that regulations will allow interviews to be waived for those with serious health conditions who may be in the support group after medical assessment.
79. Claimants would be provided with the date and time of their work-focused interview. Regulations would provide that if the claimant cannot attend the work-focused interview, then in certain circumstances it would be able to be moved and take place at another date or time provided this is within a set time from when the work focused-interview was supposed to take place. It is intended that regulations would allow the flexibility to hold interviews in various places subject to circumstances, with particular reference to interviews being able to take place in the home.
80. Subsections (2)(f), (2)(g), (2)(h) and (2)(i) enable regulations to deal with situations where a claimant has not attended or not fully participated in a work-focused interview. Anyone failing to take part in a work-focused interview would have an opportunity to show they had good cause for their failure to take part in the work-focused interview, in a similar way as provided under the current legislation relating to incapacity benefit and work-focused interviews (the Social Security (Incapacity Benefit Work-focused Interviews) Regulations 2003 (S.I 2003/2349). What is to be taken into account in deciding if a claimant can show good cause would be set out in regulations under subsections (2)(h) and (2)(i).
81. As well as attending a work-focused interview, claimants would normally be expected to participate fully in the interview. Regulations are likely to provide that claimants are required to provide certain relevant information (such as about their existing skills) and to participate in discussions about their employability and the steps that could be taken to help them move into work or closer to the labour market. Additionally it is intended that where work-related activity becomes mandatory for certain claimants in receipt of the work-related activity component, regulations would require a claimant to discuss the relevant work-related activity that they had undertaken.
82. If the claimant fails to participate fully in a work-focused interview as required in regulations and cannot show good cause for that failure within the permitted time, then the amount of employment and support allowance that they are entitled to would be reduced. Regulations under subsection (4) would set out the amounts of the reductions.
83. Regulations under subsection (6) would provide for waivers and deferrals of work-focused interviews. The circumstances in which a waiver or deferral may be granted will be related to a claimant's health condition or other circumstances, such as transport difficulties (there will be some similarities to the Social Security (Incapacity Benefit Work-focused Interviews) Regulations 2003 (S.I. 2003/2349)). A waiver would mean that the requirement on a claimant to take part in a work-focused interview would be considered as not having applied and therefore a sanction could not be imposed.
84. Work-related activity is activity that helps a claimant obtain work, remain in work or to be more likely to obtain work or remain in work. As set out in the Welfare Reform Green Paper, it is intended that, as resources permit, claimants who are entitled to the work-related activity component would be subject to a requirement to participate in work-related activity. This requirement would apply for a set period of time once the assessment phase has been completed. Subsection (5) sets out that regulations must provide that requirements to undertake work-related activity will cease if the claimant becomes a member of the support group.
85. Regulations under this clause may specify the amount of work-related activity a person is required at any time to undertake. This might be exercised so as to provide for a specified number of activities per set period of time and this would be reviewed at a work-focused interview taking place within a subsequent set period of time.
86. Work-related activity might include such activities as:
87. Regulations would set out how matters would be taken into account when determining whether a claimant has met the requirement to undertake work-related activity or whether they had good cause for not doing so.
88. As for the provisions relating to work-focused interviews under clause 11, a failure to meet the requirement under regulations to undertake work-related activity and a failure to show good cause for this within the allowed time would attract reductions in the amount of an employment and support allowance the person was entitled to for a fixed period.
89. Waivers for work-related activity are provided for by regulations under subsection (6). Such regulations may provide that a requirement on a claimant to participate in work-related activity is to be considered as not having applied and therefore a sanction could not be imposed.
90. This clause proposes that at work-focused interviews, a written action plan will be developed.
91. Regulations made under subsection (1) are expected to provide that the action plan should include a summary of the discussion that took place during the work-focused interview. In a situation where participation in work-related activity is not required under regulations, then the action plan would set out possible steps a claimant could consider taking to assist them in returning to work.
92. Where appropriate, it is intended that the action plan would include steps that, if the claimant undertook them, would satisfy the work-related activity requirement under clause 12.
93. It is not intended that the claimant would be required by regulations to undertake specific steps in the action plan, even when participation in work-related activity was required. A claimant could still satisfy the work-related activity requirement by undertaking other activity.
94. Regulations provided for under subsection (4) are likely to provide that a claimant should be able to ask for their action plan to be reconsidered. This would be in order to resolve situations where a claimant believed the steps included were, or had become, inappropriate or that other steps, not agreed at the work-focused interview, should be included. The action plan would then be reconsidered in a set period of time. It is not intended, in a situation where a claimant asks for a reconsideration of the action plan, that requirements under regulations to undertake work-related activity would be waived or deferred.
95. Clause 14 provides a power for the Secretary of State to direct that a specific activity in the case of an individual is not to count as work-related activity. This is intended to stop claimants seeking to satisfy the requirement to undertake work-related activity by undertaking activity that is considered inappropriate for their circumstances.
96. This clause has the effect of allowing contracted providers in the private and voluntary sectors to exercise functions of the Secretary of State relating to conditionality.
97. It is envisaged that the conditionality regime within employment and support allowance will, when employment and support allowance is introduced, be similar to Pathways to Work that is currently being operated by Jobcentre Plus in a third of Great Britain. The Government has announced that the private and voluntary sector will be contracted to deliver some aspects of Pathways to Work to the rest of Great Britain as it is rolled out. It is intended to put similar arrangements in place for the purposes of employment and support allowance. It is intended that private and voluntary sector organisations will be contracted to provide back to work support to claimants. In addition these organisations may take on responsibility for providing the work-focused interviews.
98. Subsection (1) provides that the Secretary of State can authorise private and voluntary sector organisations to undertake certain functions conferred on him by primary legislation (clauses 11, 13 and 14) relating to work-focussed interviews, action plans and directions relating to work-related activity.
99. Subsection (2) allows regulations to be made that allow the Secretary of State to authorise private and voluntary sector organisations to undertake certain functions conferred or imposed on him by regulations made under clauses 10 to 14. In particular they would allow private and voluntary sector providers to take responsibility for related decision-making activity regarding sanctions and safeguards.
100. Subsection (2) also provides that regulations may be made in relation to appeals, revisions and supersessions of these decisions in line with existing decision making processes and legislation.
101. Subsections (3) and (4) make it clear that where authorisation is given for a private or voluntary sector organisation to undertake a function then authorisation may only apply to part of that function.
102. Subsection (6)(b) provides that authorisations granted under or by virtue of clause 15 can be revoked and subsection (6)(c) provides that giving authorisation to a contractor does not preclude the related function from being undertaken by another person, for example Jobcentre Plus.
103. Subsections (7) and (8) establish that, where a function is undertaken by a provider, that function is treated as if it had been undertaken by the Secretary of State. This would not apply for the purposes of the operation of a contract - for example a contractor would be treated as performing work-focused interviews for the purposes of being paid for them. It also establishes that responsibility lies with the contractor in respect of any criminal proceedings brought because of their actions.
104. Subsection (9) establishes that where authorisation for a function is revoked by the Secretary of State and the contractor is therefore unable to perform the functions which they are contracted for, the contract can be treated as repudiated by the Secretary of State.
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