|Welfare Reform Bill - continued||House of Commons|
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Schedule 4 - Transition relating to Part 1
323. This Schedule provides for transitional arrangements for those people who are on existing benefits. Existing benefits are incapacity benefit (which includes transitional awards of incapacity benefit), severe disablement allowance and income support (on grounds of incapacity).
324. Paragraphs 1 to 3 provide for regulations to specify when a claim can be treated as a claim for an existing benefit and when a claim can be treated as a claim for an employment and support allowance. Regulations may make provisions that a claim for an existing benefit made before the day that the provisions in respect of an employment and support allowance come into effect, but for a period beginning after that day can be treated as a claim for an employment and support allowance.
325. Regulations may provide that, after the appointed day (i.e. the day on which the provisions about an employment and support allowance take effect), existing benefits cannot be claimed and an employment and support allowance is claimed instead. Paragraph 2(c) enables regulations to provide for a claim to an employment and support allowance to be treated as a claim for existing benefit. This power may be used, for example, when someone's benefit is backdated to a period before the appointed day. Regulations will specify the conditions and the amount of award of an employment and support allowance
326. Paragraphs 4 and 5 relate to claims that are made by those who had previously been entitled to an existing benefit, who subsequently ceased to be entitled to that benefit, but who can return to benefit because they are covered by linking rules. It covers those cases where the claimant's original claim was for an existing benefit, but their subsequent claim, which is covered by linking rules, is made after the provisions in relation to employment and support allowance have come into force. Regulations may provide that these cases may be awarded an employment and support allowance on terms which match wholly or partly the terms of the existing benefit.
327. Paragraph 6 provides for regulations to make provision for the migration of existing claimants onto an employment and support allowance. These regulations could provide both for voluntary migration, in prescribed circumstances, or mandatory migration. Regulations could prescribe the timing, conditions, kind and amount of any such entitlement to an employment and support allowance in such cases. Regulations could also make provision for determining whether a claimant has limited capability for work-related activity (i.e. that they would be entitled to the support component of an employment and support allowance). Paragraphs 7 and 8 provide for regulations to make provisions for the conditions of continuing entitlement, or for reviewing or terminating such awards.
328. The proposal in paragraphs 1, 8 and 11 is a minor technical amendment to primary legislation (Social Security Contributions and Benefits Act 1992, Social Security Administration Act 1992 and Local Government etc. (Scotland) Act 1994) in order to clarify and standardise references in this legislation to certain public authorities concerned with the administration of council tax benefit. It ensures that all references to relevant authorities administering council tax benefit in England and Wales are to "billing authorities" and those to relevant authorities in Scotland are to "local authorities in Scotland". Paragraph 8 is retrospective and will be taken to have had effect from 1 April 1997, the date of coming into force of section 140A of the Social Security Administration Act 1992.
Administration of housing and council tax benefits
329. Paragraphs 5 to 7 and 9 would amend sections 139E, 139F, 139G and 140B (5A) of the Social Security Administration Act 1992, to take account of the more flexible powers of direction contained in clause 38. The amendments would enable the Secretary of State to require information he needs from a local authority to decide whether it has taken the action specified in the direction, in the same way as he already decides whether specified standards have been obtained. The amendments also provide for the Secretary of State to take the same enforcement action when an authority fails to comply with a direction on actions, as he can when an authority fails to deliver on standards set down in a direction.
330. Local authorities who administer housing benefit and council tax benefit have discretionary powers to operate a local scheme to disregard up to the full amount, or any part of a war disablement pension and war widow's pension, which is not already subject to a statutory disregard of £10 a week. This power to disregard war disablement pensions and war widow's pensions would be provided by sections 134(8) (a) and 139(6) (a) of the Social Security Administration Act 1992. It is not subject to any limit on how much local authorities can spend.
331. The current legislation also provides at sections 134(8)(b) and 139(6)(b) of the Social Security Administration Act 1992 that the local authority may choose to disregard other income as part of their local scheme, but only where the source of that income has been prescribed by the Secretary of State. For example, this power is currently used to disregard income of war widowers and certain war widows who are not covered by the definition of war widow's pension in the primary legislation. However, for these types of disregard the legislation provides a spending limit on the amount of prescribed income that local authorities are able to disregard.
332. Paragraphs 3, 4, 10 and 14 of Schedule 5 relate to services benefits. Paragraphs 3 and 4 would amend section 134(8)(a) and 139(6)(a) of the Social Security Administration Act 1992 to enable the Secretary of State to prescribe in secondary legislation which pensions are to be included within the definitions of "war disablement pension" and "war widow's pension". A "war widow's pension" is defined to include corresponding pensions payable to a widower or surviving civil partner. This ensures that war widowers and certain war widows whose entitlement for being included within a local authority discretionary scheme is currently provided through prescription by the Secretary of State will be covered by the primary legislation and thereby avoid any potential indirect discrimination by these pensions being subject to a spending limit as is currently the case. The amendment would also allow the Secretary of State the flexibility to add further pensions to the definitions of qualifying service pensions, without the need for further amendments to primary legislation.
Local housing allowance
333. Paragraph 12 makes consequential changes to section 122(5) of the Housing Act 1996 as a result of the inclusion of provisions providing for referrals to rent officers and use of their determinations in the calculation of appropriate maximum housing benefit in the proposed new section 130A(3) and (4) in clause 29.
Revisions of decisions and appeals
334. Schedule 5, paragraph 13 amends Schedule 7 of the Child Support, Pensions and Social Security Act 2000.
335. The decision making process in respect of housing benefit and council tax benefit was amended in the Child Support, Pensions and Social Security Act 2000. This is set out in Schedule 7 and section 68 of the 2000 Act. An amendment is proposed because the relevant provision in Schedule 7 does not achieve the policy intention.
336. An overpayment comes into existence when a decision is either revised or superseded and the revised or superseded decision is less favourable. The benefit paid under the old decision, which is more than the entitlement under the new decision, is the overpayment and is recoverable. The intention is that such decisions should be capable of being revised and/or appealed. However, recent case law has precluded the former from being an option. This defeats the policy intention of changing, as quickly as possible, decisions which are wrong particularly if they are adverse to the claimant. As revision is not available, the claimant has no option but to make an appeal. The amendment rationalises the position.
337. Please see the explanation under clause 57 above.
Schedule 7 - Minor and consequential amendments relating to Part 4
338. Schedule 7 makes provision for minor and consequential amendments to the Vaccine Damage Payments Act 1979, the Social Security Contributions and Benefits Act 1992, the Social Security Administration Act 1992 and the Social Security Act 1998 which arise from the provisions of Part 4 of the Bill.
339. Pathways to Work is to be rolled out nationally before the employment and support allowance is introduced in order to provide the service required to implement a conditionality regime. This will form the basis of the conditionality model within the employment and support allowance. Initial estimates suggest the annual cost of Pathways to Work will be in the region of £148 million.
340. The overall cost of moving to the new employment and support allowance will be dependent on the rate of the allowance. In addition it is likely that there will be implementation and information technology costs incurred during the transition from the existing benefits to employment and support allowance - again these costs will vary depending on how the transition is managed.
341. It is not possible to quantify the scale of indirect costs until the passage of the Bill has been completed.
342. It is not possible to quantify the cost of the changes to benefit until the new local housing allowance rates are set in regulations.
343. There would be one off implementation costs of around £62 million to local authorities on moving to the local housing allowance. These costs would be funded out of the Housing Benefit Reform Fund, where resources have already been allocated through the Consolidated Fund, so there would be no resulting increase in the Department for Work and Pensions' expenditure.
344. Clause 30: The proposal will be piloted in around 10 English local authority pilot areas over a period of two years. The Department for Work and Pensions will fund the pilots from existing resources and estimates that piloting would cost the following:
345. These are total costs and include meeting the costs of any additional burdens placed on local authorities or other government departments.
346. If evaluation shows that this proposal is effective the Department for Work and Pensions would consider implementing a national scheme.
347. No significant additional costs are expected to arise as a result of this clause.
348. Clauses 45 to 47, would involve initial set up costs to Government as a whole of around £15,000 and costs to local government of around £20,000 per year. Set against this, central and local government would share in estimated overall savings of at least £450,000 to £600,000 per year in terms of more efficient investigative processes. The set-up costs for central government would come out of the Department for Work and Pensions existing funds. There would be no additional funding for local authorities. The minor costs, less than £50 per local authority per year, would be met from within existing subsidy arrangements but will be more than offset against overall savings.
349. Clause 48: Only minimal costs are expected to be incurred from amending the current legislation because all the processes required to apply the "two strikes" system, including the supporting information technology system for storing and monitoring the offences, are already in place and operational.
350. No significant additional costs are expected to arise as a result of the provisions in Part 4 of the Bill.
351. Work is underway to assess the precise impact on public service manpower. On current estimates:
352. The Bill is expected to have the following effects on public service manpower:
- The Bill is not expected to result in any changes of staffing in central Government. However, the Rent Service is an independent agency of the Department for Work and Pensions, and the removal of the need to refer most cases to the rent officer when determining housing benefit is expected to lead to a decrease in the number of rent officers required. Rent Officers in Scotland and Wales are part of the Scottish Executive and the National Assembly for Wales, and the proposed changes to benefit administration would affect Rent Officers in the Devolved Administrations.
- The staffing requirements of local authorities, who deliver housing benefit on behalf of the Department for Work and Pensions, are also likely to be affected. There would be an initial increase in workload to cope with the move to the local housing allowance. It is too early to say what the level of steady state activity would be after all existing cases have transferred to the local housing allowance, but this would continue to be monitored by the Department for Work and Pensions.
- Conversely, the local housing allowance was designed to be a simpler system in order to reduce the burden on local authorities. In the longer-term therefore it is anticipated that the net effect of the simplification of the system versus the increased activity related to 'vulnerability' decisions and reviews would lead to a balancing out of resources. However, the workload for local authorities currently operating the local housing allowance system will continue to be monitored. The financial effects of the change in workload for local authorities are discussed below.
353. The staffing requirements for government departments and their agencies are not expected to change as a result of these clauses.
354. The proposed amendment to the "two strikes" system does not alter the process of prosecution for benefit offences. It is therefore expected that the same number of investigators, legal advisers and court officials would be required.
355. The staffing requirements for government departments and their agencies are not expected to change as a result of these clauses.
356. A full Regulatory Impact Assessment for the employment and support allowance is included within the overall Regulatory Impact Assessment for Welfare Reform and published alongside the Bill. Copies are available from the libraries of both Houses of Parliament as well as from the Department for Work and Pensions website (www.dwp.gov.uk).
357. The main points made in the Regulatory Impact Assessment include:
- These proposals would not have any particular effect on small businesses.
- There are no competition issues associated with the replacement of incapacity benefits with the employment and support allowance.
- Jobcentre Plus will be responsible for the implementation of the employment and support allowance, working closely with other government departments and agencies and its own partner organisations.
358. The secondary legislation that would stem from Part 2 of the Bill is expected to have an effect on business, although the effect is not expected to be significant. It is expected that the costs of some private landlords would increase; overall the cost is not expected to be more than £6.5 million to £10 million per year across the whole sector, i.e. approximately £12 per private rented sector housing benefit tenant per year.
359. The secondary legislation that would stem from Part 2 of the Bill is also expected to have an effect on local authorities. Local authorities administer housing benefit on behalf of the Department for Work and Pensions and the cost of the administration of the benefit is subsidised. The Department for Work and Pensions would take account of both the implementation costs and any longer term costs to local authorities when providing funding. The Department for Work and Pensions has set aside £62 million of the Housing Benefit Reform Fund to fund the implementation costs for local authorities.
360. It is not possible to summarise the costs and benefits arising as a result of clause 36 (payment of housing benefit) at this stage, as the details of an appropriate approach are yet to be developed with stakeholders. However, it is intended that stakeholders, including Local Authority Associations, will be consulted on draft regulations.
361. Clause 30 can only affect people who are evicted for anti-social behaviour. The Department for Communities and Local Government (DCLG) estimate that 1,500 people are evicted for anti-social behaviour per year in England and Wales (approximately 40 are evicted for anti-social behaviour in Scotland). Therefore this measure is not likely to impact significantly on business, the public sector, charities, the voluntary sector or on a specific sector or sectors of the community.
362. Additionally, the intention is to begin by piloting the new measure in about 10 local authorities in England and therefore the numbers affected will be much lower than the 1,500 mentioned above.
363. A Regulatory Impact Assessment has been carried out for these clauses. However, since the proposed amendments to overpayment recovery provisions are not expected to affect business, the Regulatory Impact Assessment is not required to be published.
364. Clause 48 is not expected to affect the private sector. The only impact, which is expected to be slight, is expected to be seen by the Department for Work and Pensions and, to a lesser extent, local authorities, although it is not considered that this amendment will greatly impact upon the payment of housing benefit, or on the Local Government prosecution process.
365. Local Authority Associations have been consulted in connection with the clause.
Part 4 of the Bill (Miscellaneous)
366. The provisions in Part 4 of the Bill are not expected to have any impact on business, charities or the voluntary sector. They are expected to have little impact on the public sector. A full Regulatory Impact Assessment is not necessary.
367. Clauses 1 to 28 make provision for an employment and support allowance. The provisions generally provide powers to make regulations. It is possible that the provisions and regulations under them may engage Articles 6, 8, 14 and Article 1 of the First Protocol. For example regulations under clauses 10, 11 and 12 may provide for the amount of an employment and support allowance to be reduced for failure to participate in work-focused health-related assessments, work-focused interviews or work-related activity. These powers and all powers set out in these clauses are considered to be capable of being exercised compatibly with the rights set out in the Convention.
368. Clauses 29 and 36 provide for the national application of the local housing allowance and some matters relating to payment. Clause 30 provides for the new housing benefit sanction. Clauses 31, 32 and 33 provide for new arrangements for extended payments and clauses 34 and 35 provide for information sharing. The majority of these provisions provide powers to make regulations. Clause 39 and Schedule 5 provide for minor and consequential amendments. It is possible that the provisions and regulations under them may engage Articles 6, 8, 14 and Article 1 of the First Protocol. The powers contained in these clauses are considered to be capable of being exercised compatibly with the rights set out in the Convention.
369. Clauses 40, 41and 42 make provision in relation to the sharing of social security information. Clauses 43 and 44 make provision in relation to the recovery of overpayments and clauses 45 to 48 make provision in relation to local authority functions in relation to benefit fraud and the loss of benefits for the commission of benefit offences. The clauses contain a range of regulation making powers. It is possible that the provisions and regulations under them may engage Articles 6, 8, 14 and Article 1 of the First Protocol. Again, the Government considers that the powers contained in these clauses are considered to be capable of being exercised compatibly with the rights set out in the Convention.
370. Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement about the compatibility of the provisions of the Bill with the Convention rights (as defined by section 1 of that Act). The statement has to be made before second reading. The Secretary of State for Work and Pensions, John Hutton, has made the following statement:
371. None of the measures in this Bill has any effect on or is affected by any European Directive.
372. The following provisions come into force on Royal Assent:
- Clause 62 (Northern Ireland).
- Paragraph 8 of Schedule 5 and clause 39 in so far as it relates to those provisions; and
- The general provisions in clauses 63 (interpretation), 64 (financial provisions), 66(transition), 67 (extent), 68 (commencement) and 69 (short title).
373. Other measures come into force either two months after Royal Assent or on a day appointed by the Secretary of State by order (see clause 68).
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