HC 576 Progress towards the implementation of Universal Credit

Written evidence submitted by Unison


1. UNISON welcomes the opportunity to make this submission to the Work and Pensions Select Committee. UNISON is the largest public service trade union in the United Kingdom. It represents thousands of people who undertake housing and council tax benefits administration for local authorities and their contractors.

2. The introduction of Universal Credit represents the biggest single change to the system of benefits and tax credits since 1945, affecting some 6 million households and 19 million people. In seeking evidence the Committee has specifically requested comments on:

The proposed arrangements for claims and payments and the provision of support and advice for claimants, including the presumption of a predominantly online, self-service claims process; monthly payment to one person in the household; and arrangements for providing telephone and face-to-face support and independent advice for claimants who need it.

3. This submission specifically addresses the majority of those issues and argues that the Universal Credit service delivery model requires at the outset a people based local service element as an integral part of the model. It asserts that the skills expertise and experience of the 20,000 staff currently employed by local authorities or their contractors delivering housing and council tax benefits should form an integral part of that service delivery model for the successful introduction of Universal Credit and that without that integration the service delivery model risks failing to reach the standards of service quality the public have the right to expect.

4. Without an integrated proactive approach at the outset that seeks to utilise their skills and experience and, equally significantly their local knowledge, the public investment that has been made in these staff may be lost.

Detailed Evidence

Service Design

5. The design of the service delivery model for Universal Credit incorporates the assumption that it will be ‘predominantly online’.

‘From the outset we have designed Universal Credit as an online service. We expect people to claim Universal Credit online and then to track their claim and report changes just as they do with online banking.’ (Lord Freud; National Digital Conference; 30 May 2012)

6. But as DWP’s own recently published research demonstrates, on-line technology is not in everyday usage by the majority of claimants.

‘All main claimants were asked about their use of technology in their everyday life……... Less than half of respondents had used internet or online shopping, online banking, or had found out about government services online. Just 14 per cent had put in a new claim for a benefit online (Work and the Welfare System: A survey of benefits and tax credits recipients; Ipsos Mori for DWP July 2012)

7. The DirectGov website advises people to allow at least 40 minutes when completing the online JSA application form.

8. More importantly, earlier research for DWP (Research Report 734 Developing an online service: Customer research into the benefits and likely uptake of Automated Service Delivery (Jobseeker’s Allowance); Department for Work and Pensions; May 2011) found that Income Support and Employment Support Allowance/Incapacity Benefit claimants were even less likely to use the internet and raised questions about the implications of rolling out automated service delivery beyond JSA claimants.

Among benefit customers, similar proportions of customers of the three different benefit groups said that they had access to the internet at home (67 per cent of Jobseeker’s Allowance (JSA) customers, 62 per cent of Income support (IS) customers and 62 per cent of Employment and Support Allowance (ESA)/Incapacity Benefit (IB) customers). Despite this, IS and ESA/IB customers tended to be less frequent users of the internet than JSA customers: 39 per cent of IS customers and 31 per cent of ESA/IB customers used the internet on a daily basis compared with 52 per cent of JSA customers.

The higher levels of internet confidence among JSA customers suggest that this group represent the most suitable target audience for the launch of ASD. However, the significantly lower levels of internet confidence among IS and ESA/IB customers may have implications for the successful roll out of ASD to a wider audience in future.

Levels of uptake of Government services were considerably lower among all customer groups. For example, only 39 per cent of JSA customers were open to claiming benefits online, although they were more likely to be open to doing so than IS customers (28 per cent) or ESA/IB customers (27 per cent).

Source: Research Report 734 Developing an online service: Customer research into the benefits and likely uptake of Automated Service Delivery (Jobseeker’s Allowance); Department for Work and Pensions; May 2011)

9. DWP now has evidence from its own experience of moving Job Seekers Allowance claimants online. DWP published its draft Structural Reform Plan in July 2010. The plan initially included Action 6.1 i) ‘Move Job Seekers Allowance and State Pension to online application as our preferred delivery model’

10. The Jobcentre Plus Annual Report and Accounts 2010/11 identifies the inclusion of the 80 per cent target.

Action 6.1 vi) Increase the proportion of Jobseekers Allowance claims made online to 80 per cent’

11. The date for achieving 80 per cent of claims made on line was set as September 2013.

12. The Public Accounts Committee raised concerns about whether this was achievable in its’ Forty Seventh Report published on 5 September 2011.

2. The running cost reductions depend to a significant extent on optimistic assumptions that 80% of Jobcentre Plus customers will deal with their claims online. Currently only 17% deal with their claims online and 31% of the poorest in society never use IT. The Department could not explain the basis of the 80% target at the hearing. Subsequent written evidence from the Department stated that 86% of JSA customers already use the internet and 67% have access in their homes, while just over 40% are "ready, willing and able" to use online JSA services. The Department should test the realism of the plans by Jobcentre Plus to process 80% of Jobseekers Allowance claims online and prepare a detailed plan for what it can achieve. It must also spell out alternative actions if the assumed savings from customers using services online are not achieved.

Source: Public Accounts Committee; Forty Seventh Report Session 2010 – 2012; 5 September 2011

13. The Committee’s concerns appear to be well founded as the DWP Annual Report reveals that progress has been limited with an increase of just 2.6 percent age points between the publication of the Public Accounts Committee Report and the DWP Annual Report and Accounts 2011/12 .

The proportion of Jobseeker’s Allowance applications submitted online increased from 10.4 per cent in March 2011 to 19.6 per cent in March 2012.

Source: Department for Work and Pensions Annual Report and Accounts 2011/12

14. The DWP Business Plan text has since been amended to read Increase the proportion of new claims to Jobseeker's Allowance submitted online to 80%’ and on 25 May 2012 DWP began three ‘trailblazers’ in an attempt to increase the percentage of applications submitted online.

· The first involves the claimant being offered assistance and access to the internet to be able to make their claim, they then can return to the telephony route if possible

· The second pilots a deliberate additional built in time for callers opting the telephony channel to make their claim to JSA, the caller will hear an automated message to advise them about the online option whilst they wait.

· The third pilots an incentivized approach where the caller is informed that they will receive their benefit claim more quickly if they claim online, claims made online will be prioritised above claims made through any other route.

15. Th is limited progress towards the 80 per cent target reflects the s cale of the task involved .

Research Report 734 Developing an online service: Customer research into the benefits and likely uptake of Automated Service Delivery (Jobseeker’s Allowance); Department for Work and Pensions; May 2011 clearly identified the scale of issues

Among JSA customers:

62 per cent were already searching for jobs online.

29 per cent were using online banking, with online banking perhaps representing a transactional service similar to ASD. Similarly low proportions of IS (25 per cent) and ESA/IB customers (20 per cent) were already using online banking. This is much lower than working non-customers, among whom 58 per cent used online banking.

16. The research for DWP not only identified lower usage of transactional services it highlighted the barriers to increased uptake.

3.1.3 Barriers to uptake

Customers also identified a number of barriers to uptake:

Having access to the internet was highlighted as a big barrier for a significant proportion of customers. Even those who accessed the internet for other purposes outside the home (for example, browsing, social networking, looking for jobs) were unsure about whether they would have access that was deemed private and secure enough to undertake transactions with Jobcentre Plus online.

Even if they had access, many customers felt that they lacked the technical ability and confidence to sign up to and use ASD online. For something as important as claiming benefits, many felt that they would much prefer to deal with a human being face-to-face rather than use a computer.

Inertia and fear of change meant that customers felt they might not migrate to ASD online, even if it did offer significant benefits. There was felt to be risk associated with trying and adopting a new system. Many customer are struggling to make ends meet, and didn’t want to risk jeopardising their benefit payments by migrating to a new system.

There was a fear that online services are not safe and secure. Jobcentre Plus customers, particularly those less confident in using the internet, were worried that interacting online would not be safe. In particular, customers were worried about inputting too much personal and financial information into an online system, and that they would end up being victim to online fraud. In particular, there was a fear about the security of having customers’ National Insurance (NI) details on an online system.

Finally, customers were concerned that the system would not function well. Stories about the government’s track record in implementing and running large IT projects and managing personal data caused doubt. As a result, many felt that they would wait and see how good the system was before using it.

Household Assessment

17. From the outset Universal Credit has been a household assessment. As such the system will need to collect information from all members of the household before a determination can be made. At the point where a new application is made the determination will draw into Universal Credit all other members of the household. This adds another dimension to the determination. What will happen when one member of the household is employed by a small employer that has not completed their HMRC R eal T ime I nformation return? With a growing number of households with adult children living at home coupled with the complexities of household formation in recent decades it is not clear how this process will operate.

Contact Centres

18. For people who are not able or willing to apply on line, the Government is planning to use ‘Contact Centres’. It is not yet clear whether people will have to get through the Identity Assurance process before accessing the call centre or whether the numbers people will have to ring will be free. Calls from a landline to 0845 numbers are expensive and from mobiles they can be very expensive as you start paying from the moment you join the queue.

19. It appears DWP is planning a very different call centre experience.

"The starting point, I said to our telephony collaboration teams based in Newcastle, was just think of a contact centre, but it has got no people in it and think of an operating model that has got no back office, and start from there," said Steve Dover (Director of Major Programmes at DWP). There will be a contact centre with staff as well and voice recognition technology, but the public will be "nudged back" to the web channel, he added.

Local authorities , e-benefits and online

20. Local authorities have introduced online application processes for housing and council tax benefit processes and now have substantial experience in this field . Document image processing and the completion of application forms online have eliminated significant paper based approaches. However claimants are still required to provide original documentation before a claim is put in payment.

21. Council and housing association landlords will often complete the online form with the tenant and scan original documentation, as part of the administrat ion of a new tenancy process and electronically submit the claim and accompanying evidence . Housing benefit staff will then ass ess the claim and identify the further documents required and further questions raised by the application.

22. The local human element of this process is the critical factor to ensuring th e quality of service delivery.

23. Another important aspect of the local service is the service provided to landlords.

Identity Assurance and Verification

24. Another potential difficulty for claimants is the Identity Assurance. It appears that a cla i mant will not be able to submit a claim unless it is able to satisfy a private company that is providing identity assurance services for DWP .

25. As UNISON understands matters , the Government intends to appoint a number of private sector Identity Assurance providers whose function will be to verify that the person making the claim is who they say they are.

26. T he individual claimant will then be able to choose which Identity Assurance provider verifies their identity. V erification will be performed in an appropriate channel (web, telephone or face to face).

" The provider will verify that sufficient evidence exists to verify that a person presenting on a given channel is the owner of the claimed identity "

27. It appears that that provider will also be responsible for ‘ Credential management

" The provider will securely manage the credential lifecycle (e.g. user name, password, hard or soft tokens, grids, voice samples, memorable information, one time passwords etc), from issue to decommission, including all aspects of management of the customer, which will include for example credential loss/recovery/ reissue "

28. UNISON understands that the systems of Identity Assurance that are being explored do not rely on the presentation of original documentation but instead rely on risk assessment methodologies.

29. The Identity Assurance provider contracts will not be let until September 2012.

Documentary Evidence

30. As at 19 April 2012 DWP had still not determined how claimants would be required to provide documentary evidence

       Stephen Timms: To ask the Secretary of State for Work and Pensions by what means claimants' documentary evidence in support of universal credit applications will be collected. [103934]

       Chris Grayling: My Department is currently considering a variety of options for documentary evidence to support a universal credit application. Full details will be set out in the regulations, which will be debated in the House.

Hansard (19 Apr 2012: Column 468W)

Pilots, Pathfinders and the October 2013 Rollout

31. Initially the Department for Work and Pensions made it clear that it saw no long term role for local authority staff in the service delivery model for Universal Credit. This is clearly shown in this slide taken from an early DWP presentation.

32. Some observers suspect that this is because the long term objective is that the delivery of Universal Credit service will be privatised and that the current phase is therefore designed to prepare the service delivery model, iron out difficulties and minimise risk. The unilateral privatisation By DWP of ‘JCP online’ to Capita from September 2012 is seen as a precursor of future plans.

33. T he passage of the Welfare Reform Bill elicited ‘warm words’ from Government Ministers about the experience and expertise of local authority housing benefit staff and the importance of their role in ‘supporting’ the introduction of Universal Credit. But the underlying message has always been ‘you can help us introduce it but you have no long term future’.

34. The following Ministerial answers illustrate that message:

       Steve Webb MP (WA 18 October 2011)  "Universal credit is a national benefit. It will be delivered largely through an online service, with its core administration most efficiently run by a centralised system. As DWP start to build the organisation to deliver universal credit, and we have yet to settle on the precise detail, and select the right people with the right capability it is likely some of those skills will exist within local authorities. We will therefore always look to include local authority staff in our thinking.

       Chris Grayling: (WA 5 December 2011) We are engaged with local authority staff at all levels. Local authorities are a key partner and we need to utilise their expertise, skills and success in order to design a modern welfare system that makes the most of the best of national and local services and delivers them from the most appropriate place.

                   Chris Grayling: (WA 19 January 2012) The Welfare Reform White Paper sets out that the Department for Work and Pensions will be responsible for organising the delivery of Universal Credit. It also states that we will continue to pay housing benefit to working age customers until we can migrate them successfully on to universal credit, currently expected to be by October 2017. We have yet to settle on the precise details of how the transition will work, and the effects on housing benefits staff. However, this orderly transition will ensure that we have people with relevant skills and experience to support claimants both in work and out of work, as they migrate to the new credit.

Iain Duncan Smith (OA 23 January 2012): The reason is that we will be talking full time, all the time, to local authorities. We receive a huge amount of information from them, so we are not talking about stand-alone assessments being made; rather, the functioning of universal credit requires that, at its best, it should be done in one location. However, we will be in constant contact with local authorities about the needs in their areas, and we will be with them all the way through in the way this is applied.

35. Between December when Minsters said "Local authorities are a key partner and we need to utilise their expertise, skills and success in order to design a modern welfare system that makes the most of the best of national and local services and delivers them from the most appropriate place" and in March 2012 the position changed.

36. A letter from Sir Bob Kerslake (CLG) and Robert Devereux (DWP) dated 21 March 2012 to local authority chief executives made it clear that both these Government departments took the view that benefits services must be ‘managed down’

Looking forward to 2013 it will, therefore, be important to manage down benefits services while retaining enough capacity to provide face to face support to these claimants. Capacity will also be required to maintain the Housing Benefit caseload prior to full migration, deliver localised Council Tax Support and, in England, to take on some aspects of the current Discretionary Social Fund.

37. Precisely what ‘enough capacity’ involved was not clear as the service delivery model remained undefined

Chris Grayling (WA 19 April 2012): DWP continues to develop the face to face service offering for universal credit claimants with local authority colleagues and as such the number of local authority staff required to deliver the service offering is yet to be finalised. The Local Government Association has been working with the Department for Work and Pensions to explore pilot working in preparation for universal credit.......to inform decisions on resources required by local authorities to support the transition from legacy benefits to universal credit.


38. On 27 April Lord Freud and Sir Merrick Cockell on behalf of the DWP and LGA issued a prospectus seeking 12 pilot local authorities

The Department for Work and Pensions and the Local Government Association have jointly issued a prospectus calling on local authorities to deliver pilots to support residents in preparation for the introduction of Universal Credit in 2013.

Pathfinders or Early Roll Out

39. In what appears to be a completely separate exercise, a month later, on 24 May 2012 later DWP announced 4 ‘Pathfinders’

The early roll out of the Government’s flagship new benefit system is expected to see up to 1500 new Universal Credit claimants coming on stream across four areas – Tameside, Oldham, Wigan and Warrington – each month. It will test the new simpler, single benefit payment system with local authorities, employers and claimants in a live environment before Universal Credit is rolled out across the country in October 2013.

40. It should be noted that this was not a joint announcement with the LGA.

Pilots announced

41. The 12 ‘Pilot’ authorities were announced by Lord Freud on 20 July 2012 and the pilots will complete their work by September 2013, just one month before the roll out of Universal Credits starts throughout England, Scotland and Wales.

42. Again there are mixed messages. Lord Freud said

"We are looking very hard at how to get face-to-face to people and it is looking to me as if the local authorities are the natural intermediary. I don’t think they are the only intermediary however, and exactly how we design getting that support is something that we’re doing a lot of work on, but local authorities are right at the heart as we design how we do that. They are right at the heart of our thinking."

43. Warm words indeed, but the advice issued in March by Sir Bob Kerslake (CLG) and Robert Devereux (DWP) has not been revised or replaced.

44. It is difficult to see how lessons from the pilots will be disseminated and how DWP and local authorities will be able to make the necessary changes between September 2013 and the ‘go live’ date of October 2013. For example; the pilots may require the extension of IT links between DWP and local authorities or links between HMRC RTI and local authorities.


45. Universal Credit is a huge change. Although its introduction will be phased, the sheer scale and complexity of the changes means that it is vital that a local service delivery element is an integral part of the service delivery model at the outset.

46. There are multiple potential areas where difficulties for claimants can arise. These include:

· Information supplied by employers under the Real Time Information (RTI) system being developed by HMRC and the functioning of the RTI system. The data is critical to UC calculations

· The Identity Assurance process and verification of documentary evidence

· The consequences that flow from household calculations where issues relating to RTI or Identity Assurance and verification may impact on the ability to make a household determination

· The Digital Divide and reluctance, difficulty or inability to use online services

· Changes of circumstance and transitional protection

47. For these reasons UNISON argues that if a quality service is to be secured from the outset , the integrated local service delivery element needs to be built into the service delivery model.

48. At the moment there are no answers to the following basic questions about the Universal Credit service

- How will someone apply locally?

- Where will they apply locally and where will the local ‘Universal Credit’ office be?

- What documents will they need and where will they take them locally?

- What office accommodation and It will be needed?

- How many staff will be needed?

- How does someone get face to face advice and help if they have a problem?

49. The concern is that experience from both the pathfinders and the pilots will be too late to inform the decisions that need to be made at a local level (staffing levels; accommodation; technology; disabled access; equipment; funding) and that the ‘you have no future’ inherent message to date threatens the chances of a successful start to the introduction of Universal Credit from the users perspective.

50. The Committee has specifically invited evidence on ‘The impact of the changes on local authorities, including ... localisation of council tax support’ and this submission focuses on that aspect of the Inquiry.

51. Local authorities face severe time constraints implementing a new system of support for local taxation when the legislative process is incomplete and financial constraints are severe

52. The UNISON analysis of proposals emerging from local authorities, clearly indicate that vulnerable people will receive less support and that the measures are not consistent with providing ‘work incentives’. In the words of local authority leaders in Surrey they will penalise ‘claimants who already go out to work which has the opposite effect of what the Coalition government wants’

53. Reports from council officers also repeatedly contain warnings that it will be difficult to collect income from the most vulnerable households, particularly where they currently have no recent experience of meeting these costs because they currently receive 100% council tax benefit.

Detailed Evidence

54. The third reading of the Local Government Finance Bill has not yet taken place in the House of Lords and is now unlikely to receive Royal Assent until late autumn. Local authorities face a difficult situation and significant time constraints. Secondary legislation has not been published, schemes must be designed and consulted on, software developed and amended, staff trained and the substantial public communications exercise undertaken.

55. In June 2012 the Leaders of local authorities in Surrey wrote to the Sir Merrick Cockell, Leader of the Local Government Associations saying "We would all urge the LGA to continue to press hard for a deferral of the start to April 2014."

56. Against this background local authorities have now started to publish consultation proposals for their Local Council Tax Support Schemes. UNISON has examined a significant number of the published proposals and the reports to Councillors from council officers. This evidence provides an analysis of the proposals.


57. The decision to localise council tax support was announced by the Chancellor of the Exchequer in the Spending Review 2010 in order to save £490m.There was no prior consultation with local government.

58. To achieve the saving, the current financing system, whereby the actual costs of Council Tax Benefits are fully reimbursed by DWP, is being replaced with a fixed annual payment to Local Authorities by DCLG that forms part of the Business Rates Retention Scheme, incorporating a 10% reduction on previous spending levels nationally.

59. Local authorities face significant financial challenges. Without their own Local Council Tax Support scheme they will be required to operate a default scheme but with only 90 per cent of the resources. County Councils are making it clear that they will not assist district councils to meet costs associated with this change.

60. Reports from Council Officers are spelling out the difficulties and consequences:

if councils seek to design a local scheme that passes on the cost to existing claimants other than pensioners then:

· this will cause hardship, given a range of other benefit reductions coming in around the same time, e.g. the benefits cap, restrictions on Local Housing Allowances, new capital limits in Universal Credit; and

· the extra liability will probably not be collectible in full (and even then it may require additional resources to collect it), meaning that the cost comes back to the funding councils anyway.

(South Lakeland Council)

It is likely that these reforms will have an impact on residents who have not previously been required to pay Council Tax. It is anticipated by officers that it will be difficult to collect small amounts of tax from low income households so an assumption about collection rates needs to factored into the models above. (Stevenage Council)

‘it must be emphasised that there will be a potential loss of income through reductions in collection. Statistics are not available to clearly indicate how much income is likely to be uncollected. However, a scheme whereby all working age families need to contribute towards their council tax would result in approximately 8,500 households having a liability which would not have existed under the CTB regime. Given that we will be seeking to collect money from the most vulnerable members of the community, some of which will be required to pay council tax for the first time, maintaining collection levels could pose a significant challenge. There is the option to make further reductions in the scheme to compensate for this potential loss; but are we just fuelling a vicious circle? (Bromley Council)

61. Local councils are also facing unprecedented budget reductions. Spending Review 2010 removes £6.1bn from formula grant by 2014/15. Unsurprisingly, cost control is a central feature of proposals. The requirement to protect pensioners means that the overall 10% reduction has to be achieved through reductions from working age claimants. Different local authorities have significantly different proportions of pensioners within their current caseloads and CLG has ruled out reflecting this in the financing assumptions.

62. In addition councils are assuming significantly reduced collection rates from proposals that involve ending 100% benefit and or increasing the proportion of council tax benefit met by people on low incomes. One local authority is assuming a collection rate of just 35% on this additional income. Other authorities are more optimistic but are still only using a collection rate assumption of 70%.

63. Surrey Council Leaders set out the consequences ‘‘We are concerned at the level of impact on working age claimants, with the 10% funding reduction in actual fact translating to more like a 20% or 25% reduction being required after allowing for pensioners and other protected groups."

64. They go on to warn that Local Council Tax Support schemes will ‘penalise claimants who already go out to work’

"We feel a rushed implementation of a new scheme might lead to penalising claimants who already go out to work which has the opposite effect of what the Coalition government wants. This does not seem joined up with the current emphasis on helping "troubled families"

Letter Surrey Council Leaders to LGA; June 2012

65. Given the limited time available, most local authorities are basing their proposals on the current Council Tax Benefit Scheme but then either, only applying the scheme to a percentage of the Council Tax charge, or limiting the Council Tax charge that attracts support to a band.

Maximum Council Tax eligible for a discount

66. The vast majority of local authorities are proposing to restrict the level of council tax support.

a. Wakefield: ‘Working age claimants would be able to claim a maximum amount of

support equivalent to 67 per cent of their Council Tax bill’

b. Craven: Options include capping at Band C, Band D or at 80% of the charge

c. Brighton: The Council Tax discount for people of working age will be assessed

on the basis of 90% of full Council Tax liability

d. Stevenage: Less 10% from current benefit

e. Chiltern: Considered replicate current scheme but reduce awards by 20% but

noted the following problems with proposals - No regard to the Council’s duties in respect of child poverty, disabled people, homelessness or equalities, No additional support for the most vulnerable

No flexibility; Non working households left with less money than they officially need to live on Looked at cap on discount at £1200 or restriction to Band D but a funding gap remained

f. Thanet: Working Age applicants have their awards reduced by a fixed

Percentage currently proposed to be 5% or 6%

g. Redbridge: Calculating support using 90% of the council tax charge

h. Wycombe: Options under consideration include:

1. Indiscrimate – across the board cut of 20% from all unprotected groups or

2. Differentiation – applying a cap based on a maximum level of Council support available – say at Band D

i. Epsom and Ewell: Proposals that will restrict support to 85% of the council tax

charge and restrict the maximum award to Council Tax Band F.

j. Welwyn Hatfield: Options under consideration:

1. Support calculated using 90% or 85% of the charge with the council taxpayer finding the rest. Under this option someone in a band D property getting 100% help now would have to find £2.83/week or £4.25/week

2. Support is calculated using 75% or 72% of the charge with the council taxpayer finding the rest. Someone in a band D property on full benefits in Welwyn Garden City would have to pay either £7.08/week or £7.92/week.

k. Rossendale: Existing scheme less a percentage’ - those remaining of working age

(c 56%) will see their benefits

1. reduced by c 20% in this scenario or

2. "Existing Scheme, consideration of vulnerable groups less a percentage" - those remaining of working age (c 56%) will see their benefits reduced by more than 20% in this scenario or

l. Trafford: Restrict support to the Band D property charge

m. Hull City: ‘Passported (or tapered) to maximum support of up to a set

percentage of council tax liability yet to be determined’

n. South Norfolk: Bands E to H treated as Band D; Band D treated as Band C; Band C

treated as Band B; Band B Is treated as Band A and Band A treated as have a Council Tax one ninth lower

Working Age claimants: For those on ‘passported’ benefits the Council Tax Support scheme for South Norfolk will cap the maximum eligible Council Tax at 80% (after restriction of eligible Council Tax by band).

o. Castle Point: A maximum 65% reduction on their council tax liability if they are in a

Council Tax Band A, B, C or D property. If they are in a Council Tax Band E, F, G or H property they will qualify for a maximum 65% reduction of Band D equivalent Council Tax liability. This also applies if a person is in receipt of income support, on an income-based jobseeker’s allowance or on an income-related employment and support allowance

p. Bexley: It is proposed that all claimants will have the amount of Council Tax

liability used in any assessment of Council Tax Support capped at 85% of liability. In other words, under the new Council Tax Support scheme, claimants will be required to pay a minimum of 15% of their Council Tax liability. Phased in 5% year 1; 10% year 2; 15% year 3

q. Bromley: Entitlement is based on 75% of liability

Minimum award or no award if support is calculated as below a minimum level of Council Tax Support

67. Under the current system of Council Tax Benefit the award can be as little as 1p a week.

68. A number of local authorities are proposing to introduce a minimum weekly award below which no support will be provided. This will affect households where someone is in low paid employment. The most common figure is £5/week meaning that households that currently get less than £5.00/week could lose up to £260 a year.

· £1/week – Wakefield

· £2/week - Redbridge

· £5/week – Craven; Trafford; Welwyn Hatfield


69. The amount of capital and savings can affect entitlement to council tax benefit. Capital and savings includes:

· Cash

· Bank accounts including current accounts, building society accounts and post office accounts

· ISA’s, Tessa’s, etc

· Unit trusts

· Shares

· Premium Bonds

· National savings certificates

· Property and land (other than the home you live in) that you own

70. Currently claimants are ineligible for Council tax benefit if they have capital of more than £16,000. Capital of up to £6,000 is ignored and a ‘tariff’ income of £1/week for every £250 above £6,000 is included in the income assessment to determine the level of benefit awarded.

71. Many local council tax support proposals include changes to the treatment of capital.

72. The most common proposal involves lowering the level of capital that makes people in eligible from £16,000 to £6,000 (e.g. Bristol; Craven; Castle Point).

73. Some proposals lower the amount of capital that is ignored and start to apply the ‘tariff’ income earlier. For example Harrow Council proposes that ‘Capital of up to £3,000 is ignored and a ‘tariff’ of £1 for every £250 above £3,000 is applied’

Non Dependent Deductions (NDDs)

74. Non Dependant Deductions are a feature of both the Housing and Council Tex benefit determinations. The deductions from housing benefit are higher than the deductions from council tax benefit.

Non Dependant Deductions

2012/13 Council Tax Benefit

2012/13 Housing Benefit




Pension Credit Guarantee Credit or Savings Credit



Employment Support Allowance (income related) main or assessment phase



Job Seekers Allowance or Employment Support Allowance (contribution based)



Gross income of paid work is less than £124/week



Gross income of paid work is more than £124/week but less than £183/week



Gross income of paid work is less than £183/week



Gross income of paid work is more than £183/week but less than £238/week



Gross income of paid work is more than £238/week but less than £316/week



Gross income of paid work is more than £183/week but less than £316/week



Gross income of paid work is more than £316/week but less than £394/week



Gross income of paid work is more than £394/week



Jobseekers Allowance (Income Based)



Income Support



Working less than 16 hours/week or is on maternity/paternity/adoption or sick leave



Any other not included above



75. The significance of non dependant deductions was highlighted in a recent speech from the Prime Minister.

"If a family living on benefits wants their adult child to stay living at home they are actually penalised – as soon as that child does the right thing and goes out to work. You get what’s called a non-dependent deduction, removing up to £74 off your housing benefit each week.  I had a heartrending letter from a lady in my constituency a few weeks ago who said that when her son leaves college next month, her housing benefit will drop significantly, meaning her family may have to split up.  This doesn’t seem right"

 David Cameron MP; 26 June 2012

76. Increases to non dependant deductions are a feature of many scheme proposals.

Trafford: Under this proposal, the deductions will increase by 20% and a new charge of £4 per week will be made for other adults not in work

Old Scheme (Council Tax Benefit)

New Scheme (Council Tax Support)

A couple live with their 26 year old daughter who earns £400 per week, and their 20 year old son who receives income support. A deduction of £9.90 per week is taken from the claimants Council Tax Benefit for their daughter and no deduction is taken for their son.

Under the new scheme the deduction will increase to £11.88 per week for their daughter and £4 per week for their son. The total deduction is now £15.88 per week.

Wakefield: £5/week deduction from each member of the household in receipt job seekers allowance; Employment and Support Allowance; Income Support and Pension Credit

The level of Council Tax support would be subject to a deduction of between £5 - £10 a week for every non-dependant in the household

 Wakefield proposed NDDs


Gross weekly income less than £215/week


Gross weekly income more than £215/week


Bristol: Increase non dependant charges by 50%

South Norfolk: The Council proposes that where there are other adults (non-dependants) living in the household it is assumed that they are capable of paying an element of the Council Tax.... ....applying only one rate of deduction, at a level of £10 for each and every non-dependent

77. Redbridge and Brentwood provide an interesting contrast. Redbridge is proposing significant increases while Brentwood is proposing to remove non dependant deductions completely.

Non Dependent Deductions


Redbridge proposed

Brentwood proposed





Job Seekers Allowance or Employment Support Allowance (contribution based)




Gross income of paid work is less than £183/week




Gross income of paid work is more than £183/week but less than £316/week




Gross income of paid work is more than £316/week but less than £394/week




Gross income of paid work is more than £394/week




Working less than 16 hours/week or is on maternity/paternity/adoption or sick leave




Any other not included above




Earnings Disregards

78. Currently the earnings disregards are

· Single claimant – the first £5

· Couple – the first £10

· Single Parent – the first £25

79. The proposals out for consultation vary with some authorities proposing increases


· Single claimant – the first £20

· Couple – the first £25

· Single Parent – the first £40


· Single claimant – the first £10

· Couple – the first £10

· Single Parent – the first £25


· Single claimant – the first £7.50

· Couple – the first £10

· Single Parent – the first £35


80. At present the housing benefit scheme operates a 65% taper and council tax benefit operates a 20% taper resulting in a claimant retaining 15p of every additional £1. The taper that will be applied by Universal Credit is 65%

81. Several local authorities are proposing to increase the taper (i.e. the percentage of income above the applicable amount that is used to reduce entitlement to support)

82. Trafford Council is proposing to increase the taper to 30% meaning that a claimant in receipt of Housing Benefit and Local Council Tax support will retain just 5p of every additional £1.

83. Welwyn Hatfield are considering a proposal to increase the taper to 40% which would mean that a clamant in receipt of Housing Benefit and Local Council Tax Support would lose 5p for every additional £1.

What is counted as income?

84. The treatment of child benefit and child maintenance and whether it is counted as income is another relevant issue. Child Benefit was disregarded from housing and council tax benefit calculations as part of a wider strategy to address child poverty

Child Benefit

In the 2008 Pre-Budget Report (Chapter 4 Fairness and Opportunity for All), the Chancellor announced that Child Benefit would be disregarded in the calculation of HB and CTB. The intention is to boost the incomes of many of the lowest paid families, including those who are the parents of children in poverty.

Statutory Instrument 2009 No 1848 was laid in Parliament on 15 July 2009. In summary, the changes in this set of regulations are the introduction of a full disregard of Child Benefit in Housing Benefit (HB) and Council Tax Benefit (CTB). This is effective from 2 November 2009 amendments to reflect the changes to registration requirements for child minders in England made by the Childcare Act 2006 effective from 5 August 2009

Source: Housing Benefit and Council Tax Benefit Circular A17/2009; Department for Work and Pensions; 1st Floor, Caxton House, Tothill Street, London SW1H 9NA

Brentwood; Proposing that child maintenance payments are included into the income assessments

Craven; South Norfolk: Proposing removing child maintenance disregard

Trafford: Proposing to include Child Benefit in the calculation of income

Old Scheme (Council Tax Benefit)

New Scheme (Council Tax Support)

A couple with 2 children (over 5 years old) receive council tax benefit of £15 per week. They receive £33.70 per week in child benefit and this income is not taken into account when working out their award.

The same couple would now receive £10.11 per week in Council Tax Support because their child benefit is now taken into account as income.

South Somerset: All income should be taken into account in the calculation of Council Tax Reduction support. This could include:

a. - child benefit

b. - maintenance for a child paid by a former partner

c. - rent from sub-tenants and boarders


85. Currently Council Tax Benefit awards can be backdated for up to 6 months if the claimant can show a good reason why they did not claim from an earlier date.

Bexley: One month

South Norfolk; Trafford: Bromley; Epsom and Ewell: Proposing that there is no backdating

Second Adult Rebates

86. Removing the second adult rebate is a feature of many scheme proposals

87. Authorities proposing this include: Bexley; Thanet; South Norfolk; Bristol; Trafford; Hull City (Kingston upon Hull), Wakefield, Craven.

14 August 2012

Prepared 7th September 2012