Written evidence submitted by Northern
Ireland Welfare Reform Group
The Welfare Reform Group welcomes the opportunity
to comment on the Work and Pensions Committee consultation on
the White Paper Universal Credit, Welfare that Works.
ABOUT THE
WELFARE REFORM
GROUP
The Welfare Reform Group is an umbrella grouping
of organisations that campaigns for positive changes to policy,
service provision and legislation for those in receipt of social
security while also providing advice and support to other advice
giving organisations and disadvantaged persons in their capacity
as individual members of the Group.
The Group supports an equality and human rights-based
approach to the provision of social security which demonstrates
an understanding of and focus on the needs and choices of all
in receipt of benefits.
This response has been prepared by the following
organisations:
Law Centre NI.
Gingerbread NI.
Women's Resource and Development Agency.
Save the Children.
Age NI.
Advice NI.
Council for the Homeless NI.
Disability Action.
Access to Benefits.
Northern Ireland Council for Voluntary Action.
1.0 INTRODUCTION
1.1 The Welfare Reform Group welcomes the Government's
stated objective in the White Paper to simplify the benefits system
and improve incentives to make work pay. Measures to improve incentives
to work is also welcome, however, the lack of detail that informs
these developments means we have no way of knowing whether the
government's objectives will be achieved. The Group is concerned
that Universal Credit will be unable to address the true cost
of work because there is insufficient detail on how, for example,
childcare costs, carers allowance, rate rebates (in Northern Ireland),
passport benefits and mortgage interest will be integrated into
Universal Credit.
1.2 The White Paper should be considered in tandem
with the changes and cuts already announced in the June Budget
and the Comprehensive Spending Review. The impact of the changes
already announced cannot be separated from an analysis of the
White Paper proposals. In particular, the White Paper talks of
no one losing in cash terms at the point of change yet, many claimants
will have been affected by proposals already announced by the
time Universal Credit is introduced in October 2013. It is vital
that the government produces clear and transparent information
about how the new system will work in practice and ensure robust
safeguards for people who will need support with this transition.
1.3 This evidence focuses on a number of issues particular
to Northern Ireland and gives further detail of our thoughts on
particular areas of policy proposals.
2.0 THE NORTHERN
IRISH CONTEXT
2.1 Northern Ireland has particular circumstances
with regards to social welfare and arrangements to move people
into employment. The approach to social security, training and
employment programmes is divided between two government departments:
the Department for Social Development (DSD) is responsible for
social security benefits whereas the Department for Employment
and Learning is responsible for training and employment programmes.
This is in contrast to Great Britain where both areas are handled
through the Department for Work and Pensions. Furthermore, there
are notable differences in the the scope for deductions from benefits
and divergent arrangements for assessing student's entitlements
to means tested benefits.
2.2 In addition, Housing Benefit arrangements in
Northern Ireland differ significantly from those in Great Britain.
There is no equivalent to Rent Officers; instead all arrangements
are made by the Northern Ireland Housing Executive (NIHE). Local
Housing Allowance is also administered differently in Northern
Ireland, with the continuation of direct benefit payments to landlords
in approximately 25% of cases.[182]
2.3 A recent report by the institute of Fiscal Studies
found that, after London, Northern Ireland , will be the hardest
hit by tax and benefit cuts announced and to be implemented between
January 2011 and April 2014/15.[183]
Northern Ireland will be particularly badly hit because of the
high proportion of people relying on Disability Living Allowance
and families who will see reduction in benefit.
3.0 WELFARE DEPENDENCY
3.1 The White Paper uses the phrase "welfare
dependency", a term which echoes the sentiments of the social
security debate of the 1980s. This phrase portrays claimants as
a homogenous group, implying that claiming benefit is a conscious
lifestyle choice for claimants. Large numbers of claimants are
in receipt of benefit due to full time caring responsibilities,
disability, chronic ill health, recent unemployment, age and an
array of additional circumstances. The use of such language fails
to recognise the various needs and complexities being met within
the benefit system and negatively portrays claimants in a way
that is neither helpful nor warranted.
4.0 CARERS
4.1 We note that the government is still considering
whether changes to Carer's Allowance will be necessary to take
account of the introduction of Universal Credit. It is important
to recognise the pivotal role carers play in providing community
care within society. The Northern Ireland Life and Times Survey
2006 findings suggest that informal care is increasingly being
provided only and within the immediate family[184]
and it is estimated that cares in Northern Ireland are missing
out on £4 million in unclaimed benefits. It is vital, therefore,
that the needs of carers, particularly informal carers, are taken
into account when developing Universal Credit and that resources
are directed to ensuring that carers are aware of the support
and resources available to them.
5.0 BENEFIT LEVELS
5.1 The Welfare Reform Group is also concerned about
the amount of benefit individuals will receive. The coalition
government has yet to produce figures on how the Universal Credit
will be calculated and we will continue to monitor this matter
closely. We do note that the IFS report, in its initial assessment
of charges announced in the June Budget, states that £1.2
billion in 2011-12 rising to £5.8 in 2014-15 would be saved
by uprating benefits other than retirement pension and pension
credit in line with the Consumer Price Index rather than Retail
Price Index.
6.0 EARNINGS DISREGARD
6.1 The Welfare Reform Group supports the principle
of earnings disregards that will ensure people are better off
in paid employment. We support a taper which represents a lower
level than the combined rate that many people on low incomes currently
face. However, as Family Action has recently pointed out childcare
and council tax arrangements in Universal Credit may actually
mean work incentives will deteriorate rather than improve for
many households under Universal Credit. We support Family Action's
recommendation that an overall taper rate of 55% outlined in the
Centre for Social Justice's report Dynamic Benefits may be a better
starting point. We further welcome the more generous "earning
disregard" for some families to include disabled people and
couples with children. We would welcome further information as
to the other groups to be included in this measure. We strongly
recommend the inclusion of lone parent families within the group.
We fail, however, to understand why the work incentives for most
single people of working age should be made even less generous
than the current niggardly provision.
6.2 At present the Office of First Minister and Deputy
First Minister is discussing with other departments the potential
of an Earnings Disregard pilot as a means of increasing employment
rates and reducing child poverty levels. There is recognition
that support including proper childcare, education and training
is needed to make it feasible
7.0 CONDITIONALITY
AND SANCTIONS
7.1 We are concerned that a significant feature of
the new credit will be the application of conditionality. Individuals
capable of work will be obliged to do so as a requirement of receiving
benefit and those failing to do so will face financial sanctions.
We seriously question the introduction of increased conditionality
in a time of economic downturn and increasing unemployment. Due
consideration should be given to the capacity of the employment
market in this current economic climate. The Northern Ireland
rate of unemployment from July to September 2010 was estimated
at 7.0%, while Northern Ireland's working age employment remains
well below the UK average and was the lowest of the 12 UK regions.[185]
Furthermore, a Ulster Bank report has highlighted the growing
divergence between the Northern Ireland and UK economy suggesting
a longer time of recovery in Northern Ireland.[186]
Current support needs are not being met for key groups, including
people with disabilities and older people. Additional conditionality
without targeted, effective support is not likely to lead to greater
success for older or disabled jobseekers in gaining and sustaining
employment.
7.2 This increased conditionality for many vulnerable
people will result in the worrying loss of benefit either temporarily
or more permanently. The financial sanctions outlined range from
cessation of payment of benefit from one week to three years depending
on the severity of the apparent breach. We do not support the
introduction of these sanctions as such developments are shown
to harm claimants' opportunity to enter employment. We instead
support the introduction of adequate safeguards to encourage and
support claimants rather than penalise claimants. For example
recognition has to be given to the need for jobs to be available,
also for those individuals who are further removed from the labour
market, ie individuals who are long term unemployed, disabled
individuals, specialised supports and training is required. Recent
evidence from the Joseph Rowntree reveals that "equal access
to programmes and services does not mean equal quality in those
provision, nor does it necessarily lead to equality in outcomes"
and "sanctioned claimants are less likely to enter sustainable
employment or make longer term gains in employment".[187]
Further evidence suggests that sanctions disproportionately impact
on specific groups, particularly those with learning disabilities,
mental health problems and literacy difficulties.[188]
Northern Ireland has a particularly high proportion of people
with mental health issues per head of population. It has been
estimated that around a quarter more people suffer from mental
health disorders in Northern Ireland than in England and Scotland.[189]
7.3 Moreover, a little noted part of the enhanced
sanctions regime is that in some cases, even if a claimant engages
with a particular programme after being sanctioned, he or she
still has to serve the full term of the sanction, see for example
the Mandatory Activity Programme. We fail to see how this will
encourage re-engagement. We also believe such a proposal is wrong
in principle. Where benefits are the only means of income for
an individual or a family and are relied upon for the provision
of food shelter and warmth any sanction in these circumstances
would be detrimental to the physical and mental wellbeing of the
individual as well as the rest of the family including children.
Attention should also be given to the wider consequences of sanctions
which may lead to or exacerbate other issues such as marital breakdown,
drug or alcohol dependency and mental health problems. The suggestion
of replacing hardship payments with loans is a further retrograde
step.
8.0 REDUCING ERROR
AND FRAUD
8.1 We welcome the concept of the move towards reducing
error and fraud. A practical staring point would have been to
separate these two concepts. The Welfare Reform Group is concerned,
however, by the measure to introduce a £50 civil penalty
for those who fail to report changes of personal circumstances.
We deem this to be a punitive measure. This proposal fails to
take account of inadvertent and innocent errors made by claimants
and may adversely impact those with literacy, mental health and
learning difficulties. We support a tailored approach to the claimant
that recognises and respects an individual's capacity and provides
personalised support.
8.2 We also have reservations about the proposal
to increase the maximum rate at which fraud debts can be recovered
through deduction from benefits by almost 25%. We would welcome
clarification as to whether this will apply to the recovery of
Official Error overpayments. There is a high risk of passing administrative
errors of the new system onto the claimants. We recommend that
there needs to be protection from debt recovery due to official
error for the most vulnerable claimants.
9.0 OLDER PEOPLE
9.1 The most recent statistics have illustrated a
growth in the level of pensioner poverty in Northern Ireland.[190]
Approximately 23% of older people in Northern Ireland are living
in poverty after housing costs (AHC) compared to 16% in the UK,
and two-fifths of single pensioners and a fifth of pensioner couples
have no income other than the state retirement and state benefits.[191]
These proportions are more than double those of Great Britain.[192]
In addition, it is estimated that up to 44% of those entitled
to claim pension credit are not. Average weekly unclaimed benefit
is estimated to amount in the range of £1.2 million to £2.3
million.[193]
Research about the reasons for low uptake shows this is because
of factors including, perceived ineligibility, the complexity
of the benefit system, the claims process and lack of awareness.
We would, therefore, welcome further clarification as to the relationship
that will exist between Pension Credit and Universal Credit to
include criteria for entitlement and the process of transition
between the two benefits.
9.2 We are concerned by the technology based element
of this benefit. We welcome the assurance that alternative access
will be offered, however, we are concerned that face to face access
channels will be undermined due to cost considerations. We wish
to highlight that online and telephony may not be appropriate
communication channels for many vulnerable clients due to age,
a disability or mental health conditions, literacy or language
difficulties. In addition, there is a presumption that there is
a ready computer access for claimants, however, many individuals
do not possess the necessary financial resources to access or
maintain a computer.
9.3 We would welcome further information about alternative
methods of access that will be available to vulnerable claimants.
The Office of First Minster and Deputy First Minister has just
published a draft Northern Ireland Child Poverty Strategy for
consultation which outlines the key priorities of reducing worklessness
and promoting long term outcomes through child based interventions
designed to tackle the cyclical nature of child poverty.
10.0 CHILD POVERTY
AND LONE
PARENTS
10.1 More than a quarter of all families with dependent
children in Northern Ireland are headed by a lone parent and research
shows that they have the lowest standard of living of any household
type.[194]
10.2 We note the government's projection that in
Britain 350,000 children and 500,000 adults will be lifted directly
out of poverty. We would welcome further clarification as to how
Universal Credit will help to meet the targets identified in the
Child Poverty Act 2010.
10.3 We have reservations that many of these proposals
may counteract the goal of ending child poverty and the objectives
of the Child Poverty Act, for example, the use of sanctions on
lone parents and possible termination of passport benefits. Facilitating
parents into good quality, well paid work and sustainable employment
are important measures in meeting targets concerning child poverty.
There are concerns about the potential impact on child poverty
if lone parents are exposed to the risk of benefit sanctions.
This presents real concerns that implementing Universal Credit
in Northern Ireland will lead to a potential negative impact on
family life and an adverse impact on women in particular who are
the majority of lone parents, will be affected most by the lack
of adequate childcare. To mitigate the potential impact to a degree,
there should be increased investment in childcare provision in
Northern Ireland as part of the wider UK welfare reform
10.4 Northern Ireland does not have sufficient childcare
infrastructure in place to facilitate this envisaged large-scale
move to work. Unlike in England and Wales, where the Child Care
Act 2006 imposes a duty on local authorities to identify and meet
childcare needs, Northern Ireland has no corresponding childcare
legislation and there is no statutory obligation on local or public
authorities to provide high quality and affordable childcare.
Research into childcare provision has found the conditions here
in Northern Ireland to be "woefully inadequate". The
barrier this place on parents' ability to enter the workplace
cannot be underestimated. We believe it is necessary to strike
a balance between promoting employment and supporting family life.
The Universal Credit will fail to get the targeted people into
work if these barriers to the workplace are not effectively broken
down.
11.0 IN WORK
POVERTY
11.1 A new report by the Joseph Rowntree Foundation
had highlighted that child poverty in working households must
be given the same priority as out of work poverty. The "Monitoring
Poverty and Social Exclusion 2010" report observed that while
whilst the number of children living in poverty in workless families
fell, the number in working households.[195]
It is therefore important to recognize that work alone is not
necessarily a direct route out of poverty.
11.2 The IPPR has also identified that "in work
poverty is linked to family type and working pattern as well as
ethnicity and place".[196]
It is often women who take up low status and low quality jobs
which exacerbates further the gender segregated labour markets.
Women continue to be concentrated in the 5 "c"s -cleaning,
caring, cashiering, clerical and catering and, moreover, 83% of
all part time workers in Northern Ireland are women.[197]
Therefore, it is important to understand that entry into work
and participation in the labour market is not equal and that inequalities
exist, particularly, in relation to the gender pay gap and in
work poverty.
12.0 HOUSING BENEFIT
12.1 Housing Benefit forms a large proportion of
UK welfare expenditure. This reflects not only those living in
social housing but growing numbers of low-income tenants living
in the private rented sector. This sector is a rapidly increasing
form of tenure in Northern Ireland due to the reduction of social
housing stock through "Right to Buy" legislation and
the failure to meet new build targets. This failure is a direct
consequence of a policy shift away from providing housing capital
subsidy and therefore low social rents to increased individual
housing cost subsidy.
12.2 The White Paper commitment to improving work
incentives and remove major impediments to entering work is particularly
welcome, however, the immediate and long term changes to housing
benefit are likely to erode work incentives.
12.3 Further clarification is needed as to the SMI
and HB amounts that will be made available under Universal Credit
particularly in light of the cap on household benefit payments
announced in the Spending Review. We believe that will have an
adverse impact on larger families with children and may lead to
cases of rent arrears and homelessness.
12.4 Direct payment of the housing benefit component
to individuals may not be appropriate in Northern Ireland and
requires further investigation before practical implementation.
Local Housing Allowance introduced a new way of calculating Housing
Benefit in Northern Ireland for the majority of tenants in the
private rented sector. The overall experience of LHA has generally
been positive, particularly in light of the Northern Ireland Executive's
decision not to introduce direct payments to tenants. This decision
has avoided some of the problems being experienced in Great Britain.
12.5 We agree that there are many policy and operational
issues to work through in respect of housing. We look forward
the publication of further information on this matter in due course.
13.0 PASSPORT BENEFITS
13.1 The Welfare Reform Group is deeply concerned
by the possible withdrawal of access to a range of passported
benefits which provide important assistance to individuals and
families alike. We would welcome clarification as to entitlement
based on an income or earnings threshold. We further welcome clarification
as to whether the effect of the withdrawal of passport benefits
will be shielded by the principle that no one shall be worse off
under Universal Credit. We would also welcome further information
about the way in which passport benefits will be administered
outside of Universal Credit for example in relation to Pension
Credit.
14.0 CONCLUSION
14.1 The Welfare Reform Group welcomes the opportunity
to respond to the Work and Pension Committee White Paper consultation.
We trust that you will find our comments helpful. If there is
any further way in which we could contribute to this process we
would welcome the opportunity to do so.
December 2010
182 Email statistic from Northern Ireland Housing Executive.
Copy held on record at Law Centre (NI), Policy Unit. Received
30/07/09 Back
183
James Browne., IFS Briefing Note 114 The Impact of Tax and
Benefit Reform to be introduced between 2010-11 and 2013-14 in
Northern Ireland pg 4 Back
184
Evason, E., 2007 Who Cares Now? Changes in Informal Caring
1994 and 2009, ARK Research Update NO. 51 www.ark.ac.uk Back
185
Department of Trade and Investment NI Monthly Labour Market Report
November 2010 Back
186
Ulster Bank, Business Activity Report July 2010 Back
187
Julia Griggs., Welfare sanctions may work in the short term,
but at what cost? Joseph Rowntree Report Back
188
Social Security Advisory Committee - Sanctions
in the benefit
system. Evidence review of IS, JSA and IB Sanctions
(2006) Back
189
McWhirter, L. (2002) Health and Social Care in Northern Ireland:
A Statistical Profile. DHSSPSNI Back
190
DSD (2010) Households Below Average Income Report 2008-09 Belfast
DSD Back
191
Ibid Back
192
Joseph Rowntree Poverty Site: www.poverty.org.uk
using Household Below Average Income Survey data averaged from
2003-04-2005-06 Back
193
A2B (2009) A2B Benefit Take -Up Initiative Mid Term Evaluation
Report. PEER Consulting & Economic Research Evaluation. Back
194
Simmonds, D and Bivand, P (2008), Can Work Eliminate Child Poverty?,
York: Joseph Rowntree, cited by ARK Welfare to Work Policy Brief
June 2010 Back
195
Anushree Parekh, Tom MacInnes and Peter Kenway., Monitoring
Poverty and Social Inclusion . Joseph Rowntree Report December
2010 Back
196
IPPR 'In work poverty in the recession' Briefing Note, Glenn Gottfried
and Kayte Lawton September 2010 Back
197
Evidence received by Women's Resource and Development Agency Back
| 
