Welfare and Work Bill Committee

Written evidence submitted by Carers UK (WRW 26)

About Carers UK

1. Carers UK is a charity set up to help the 6.5 million people who care, unpaid, for family or friends. At some point in our lives every one of us will either need care or be involved in looking after an older relative, a sick friend or a disabled family member. Whilst caring is part and parcel of life, without the right support the personal costs can be high and caring can affect your job, your health and your finances.

2. Carers UK is a membership organisation of carers, run by carers, for carers. We have 17,000 members and a reach of many more. We provide information and advice about caring alongside practical and emotional support for carers. Carers UK also campaigns to make life better for carers and influences policy makers, employers and service providers, to help them improve carers' lives.

3. Carers UK’s advice and information services answer around 20,000 queries from carers and professionals every year. Our website is viewed by over 100,000 people every month, 27,000 subscribe to our monthly email newsletters, and the combined reach of our online communities and social networks exceeds 38,000. We’re in regular contact with around 1,500 local organisations, including many run by carers, who are in touch with around 950,000 carers.

4. Carers UK has offices in Wales, Scotland and Northern Ireland.

Summary

5. While t he Welfare Reform and Work Bill contains provisions to protect Carer’s Allowance from the freeze on working age benefits and an opportunity to improve reporting on ba ck - to - work provision for former carers, Carers UK are deeply concerned that a number of measures in the Bill will have a damaging impact on the finances of the 6.5 million people in the UK who provide unpaid care for ill, frail or disabled friends or family members.

6. Unpa i d carers save the state an estimated £119 billion per year [1] , y et Carers UK’s re se arch shows that many carers are already facing a daily struggle to make ends meet as a result of the additional costs of caring combined with a loss of income from giving up work or reducing working hours. A Ca rers UK survey of 4,500 unpaid carers in 2015 [2] showed that nearly 5 in 10 (48%) were struggling to make ends meet, with 41% of those struggling cutting back on essentials such as food and heating. Nearly half of all carers responding to the survey (45%) said that financial worries were affecting their health.

7. In its Election Manifesto the Government committed to "Increase support to full-time unpaid carers" [3] y et this Bill contains proposals that will result in a real terms cut to carers who rely on vital support from the social security system . These cuts come on top of previous changes to welfare which Carers UK have estimated will result in a cut to carers incomes of over £1billion between 2011 and 2018 [4] .

8. Carers UK are deeply concerned that the cumulative impact of repeated cuts to carers incomes , combined with further reductions in local government funding, and therefore the amount of social care individuals can receive, will place an increasing strain on families, p ushing carers to breaking point , ultimately threatening the sustainability of caring relationships.

9. This briefing details the key issues in the Bill for carers, propos ing amendments to four key areas:

· Employment: Introducing employment reporting requirements for former carers as part of the Government’s ‘Full Employment’ aspiration

· The Benefit Cap

· The f reeze of certain social security benefits for four tax years

· Universal Credit: Work Related Requirement s

Carers UK would also welcome clarification on the impact of the conversion of Support for Mortgage Interest (SMI) Grants to Loans.

10. Carers UK are a member of the Disability Benefits Consortium. The DBC is a national coalition of over 60 different charities and other organisations committed to working towards a fair benefits system for disabled people and carers. Carers UK recognises that there are a number of other proposals in the Bill that will affect carers, such as the change s to tax credits and the cut to the ESA WRAG group and supports the amendments put forward in the DBC submission to the Public Bill Committee .

Employment (Clauses 1-2)

11. Carers UK welcomes the proposed duty on the Secretary of State to report annually on progress towards full employment as well as increasing the numbers of apprenticeships .

12. Every year 2.1 million people find their caring role comes to an end [5] . While not all of those whose caring role finishes will have given up work to care, or will be of working age, a significant number will have left the workplace to provide unpaid care to an older, ill or disabled friend or relative. Indeed, Carers UK research shows that over 2.3 million people have given up work at some point to care, unpaid, for loved ones [6] .

13. The Government doesn’t currently collect information about the number of working age carers that remain out of work after their caring role ends. However, evidence from Carers UK’s Caring & Family Finances Inquiry [7] indicated that former carers, who are of working age, remain significantly less likely to be in work than non-carers of working age. Other research estimates that 195,000 women and 120,000 men have left work to care and remain out of employment [8] . The Women’s Business Council recognise that caring responsibilities can significantly reduce the opportunity for women to remain in the workforce and have made a number of recommendations to Government on this issue [9] .

14. Providing the right support to enable carers to return to work is essential, not only for their health and wellbeing but for the wider economy. Research from Age UK and Carers UK indicates that £ 5.3bn has been wiped from the economy in lost earnings , due to people who’ve dropped out of the workforce due to caring responsibilities [10] . This Bill provides Government with an opportunity to help more former carers back into work .

Recommendation

15. As part of the ‘full employment’ reporting requirement, Carers UK believe the Secretary of State should also include information about employment support provided to former carers and collect information on the number of former carers of working age who have returned to employment following the end of their caring role .

Suggested Amendment

Clause 1, Page 1, line 6, at end insert-

() In this report the Secretary of State must also include information about employment support provided to former carers and the number of former carers of working age who have returned to employment following the end of their caring role

The Benefit Cap (Clause 7)

16. The Bill proposes a reduction in the benefit cap from £500 per week (£350 for single people) to £442.31 per week in Greater London (£296.35 for single people) and £384.62 per week (£257.69 for single people) outside of London, to be phased in from April 2016. Since it was first proposed in the 2012 Welfare Reform Act, Carers UK has opposed the benefit cap and called for all carers to be exempt from it.

17. While an exemption for households including a Disability Living Allowance or Personal Independence Payment claimant exists , this does not protect all families affected by disability or all carers from the cap . This is due to the way a ‘household’ is defined by the benefits system.

18. For the purposes of the benefits system, a ‘household’ is considered to be an adult, their partner (if they have one) and any children they have under 18. If any other adult relatives, e.g. older parents, brothers and sisters or even adult children live in the same house they are considered to be part of a different benefits ‘household’ or unit – even though they live together.

19. This means that while carers looking after disabled partners and disabled children under 18 are exempt from the cap, those caring for adult disabled children, siblings or el derly parents are subject to the cap .

20. The Government Impact Assessment for the introduction of the Benefit Cap in 2012 [11] estimated 5,000 households containing carers would be affected by the introduction of the cap .

The impact of the lower cap on carers

21. The Impact Assessment for the Welfare Reform and Work Bill [12] states that 6% of Carer’s Allowance recipients that have a benefit income above the new cap level will be subject to the cap. Households who have had their benefit capped at £26,000 will lose on average a further £64 per week due to the lowering of the cap . Households falling above the new cap will lose, on average, £39 a week.

22. The cumulative impact on carers households who were capped at £26,000 and will be capped again at the lower amount will be devastating, resulting in a n estimated average loss of £169 a week, compared with before the introduction of the cap.

23. Recent DWP research shows that households containing Carer’s Allowance claimants subjected to the cap are more likely to move into work then those not capped [13] . This research reinforces Carers UK concerns that the cap may ultimately act to disincentivise family care , forcing carers back into work as their finances collapse and they can no longer afford to care . This ultimately pu ts e xtra strain on already stretched social care services who are forced to step in and provide care at a substantially higher cost to the public purse .

Recommendation

24. Carers UK strongly supports the following Disability Benefits Consortium amendment that would exempt all carers in receipt of Carer’s Allowance from the Benefit Cap

Suggested amendment

Clause 7, Page 9, line 6, at end insert new sub-clause:–

() Households containing members who are in receipt of Carers Allowance are exempt from the benefit cap

25. Carers UK also supports the following Disability Benefits Consortium suggested amendments that require the Government to carry out further assessment of the impact on disabled people, carers and their families before the threshold is lowered and require the Secretary of State to consider the impact of the Cap on disabled people, carers and their families during the proposed annual review of payment levels:

Suggested amendment

Clause 8, page 11, line 29, at end insert new sub-clause:-

() Before lowering the benefit cap threshold the secretary of state should assess the impact of the benefit cap on disabled people, their families and carers and report his or her findings to parliament

Suggested amendment

Clause 8, page 10, line 30, at end insert new sub-clause:-

() the impact on disabled people, their families and carers, and

Freeze of certain social security benefits and certain tax credit amounts for four tax years (Clause 9 & 10)

26. Clause 9 of the Welfare Reform and Work Bill proposes that the rates of certain working age benefits will be frozen for four years at their 2015/16 rate. Clause 10 makes equivalent provision for certain tax credit elements.

27. The freeze excludes certain disability benefits such as Disability Living Allowance, Personal Independence Payment and the support component of Employment and Support Allowance. Carers UK understands Carer’s Allowance and the Carer Premium are excluded from the freeze howev er, the benefit was not listed among those pro tected in the Explanatory Notes. Carers UK would therefore welcome absolute clarification of its exemption.

28. Despite the exclusion of certain disability benefits from the freeze, many carers receive Tax Credits and other means-tested benefits as a significant or majority part of their benefits package and, as a result, will not be protected from the real-terms cut.

29. For example, research shows half of carers claiming Carer’s Allowance also receive Income Support because they are on a very low income [14] . The Government announced that the ‘Carer Addition’ top-up to Income Support would rise with inflation - however this does not mean carers are protected. The main chunk of these carers’ benefits will face a real-terms cut as a result of freeze. This is on top of previous below inflation increases of 1%.

30. For example, a carer receiving Income Support in 2015-16 receives the Income Support personal allowance of £73.10 and the Carer Premium ‘top up’ of £ 34.60.

31. While the Carer Premium part of the benefit will rise in line with CPI, the rest of the benefit will remain at £73.10 for the next four years. By 2019-20 carers wil l receive nearly £ 190 a year less in Income Support than they would have done if the whole benefit was uprated in line with CPI.

Recommendation

32. Carers UK support the following Disability Benefits Consortium suggested amendment s to exempt carers from the four year freeze on benefits.

Suggested Amendment

Clause 9, Page 11, line 33, at end insert new sub-clause:-

() People who are disabled under the Equality Act 2010 definition or households in receipt of Carer’s Allowance are exempt from the freeze

Suggested amendment

Clause 10, Page 12, line 31, at end insert new sub-clause:-

() People who are disabled under the Equality Act 2010 definition or households in receipt of Carer’s Allowance are exempt from the freeze

Universal Credit: Work Related Requirements (Clause 15)

33. Carers UK are concerned about the implications of the proposed change in conditionality for responsible carers on Universal Credit. This would see responsible carers with a child aged 3 or 4 being allocated to the All Work Related Requirements group and requiring them to look for, and be available for work.

34. Many parents and carers of disabled children aged 3-4 will be unable to fulfil these requirements, particularly due to the well documented lack of childcare for disabled children. While carers of children in receipt of the higher or middle rate care component of Disability Living Allowance (DLA) are exempted from these requirements, many children under 5 do not receive this benefit due to difficulties in identification of need during early years and administrative delays.

Recommendation

35. Carers UK support the following Disability Benefits Consortium suggested amendment to exempt carers of disabled children aged 3 or 4 from the proposed new conditionality of the All Work Related Requirements group.

Suggested amendment

Clause 15, page 14, line 43, at end insert new sub-clauses:-

() The provisions in this section do not apply to those responsible carers of disabled children aged 3 or 4

() The Secretary of State must lay regulations determining what a disabled child is for the purpose of this subsection and may include, but will not be limited to,

(a) those children in receipt of an Education, Health and Care Plan,

(b) those children in receipt of a Statement of Special Educational Needs, (c) those children identified by their local authority as having special educational needs,

(d) those children with child in need status,

(e) children meeting the definition of disabled under the Equality Act 2010.

Support for Mortgage Interest (SMI) Grant to Loan (Clauses 16-18)

36. Carers UK would welcome further information on the conversion of Support for Mo rtgage Interest (SMI) Grants to Loans. SMI acts as a "safety net" for carers on low incomes or those who have had a sudden drop in income , allowing carers who are struggling with mortgage repayments and receiving one of the qualifying benefits (such as Income S upport) to stay in their own home.

37. Carers UK is concerned that the changes to the benefit put forward in the Bill will put added pressure on carers who are already facing significant financial hardship.

Key questions:

· What assessment has the Government made on the impact on carers of extending the "waiting period" for SMI eligibility from 13 to 39 weeks?

· What repayment mechanism will be introduced , and at what income threshold when will a homeowner be eligible to pay back the loan when they move back into work ?

· Will homeowners have the choice to defer p ayment until the sale of a home?

September 2015


[1] Carers UK & University of Leeds (2011),Valuing Carers 2011: Calculating the value of carers’ support

[2] Carers UK (2015) State of Caring 2015

[3] The Conservative Party Manifesto 2015

[4] http://www.carersuk.org/news-and-campaigns/press-releases/nation-s-carers-face-devastating-1-billion-cut-in-allowances

[5] Carers UK (2014) Need to know, Transitions in and out of caring the information challenge

[6] Carers UK and YouGov (2013) as part of Caring & Family Finances Inquiry UK Report (2014) Carers UK

[7] Carers UK (2014) Caring and Family Finances Inquiry

[8] Pickard, L., Public expenditure costs of carers leaving employment (2012) LSE Health & Social Care, London School of Economics and Political Science (http://blogs.lse.ac.uk/healthandsocialcare/2012/04/25/dr-linda-pickard-public-expenditure-costs-of-carers-leaving-employment/).

[9] Women’s Business Council (2013) Maximising Women’s Contribution to Future Growth

[10] Age UK (2012) Estimation of the Financial Impact of Leaving Work due to Caring Responsibilities.

[11] Benefit Cap (Housing Benefit) Regulations 2012: Impact assessment for the benefit cap

[12] Welfare Reform and Work Bill: Impact Assessment for the benefit cap

[13] DWP (2014) Benefit Cap: Analysis of outcomes of capped claimants

[14] Developing a clearer understanding of the Carer’s Allowance claimant group (2011) Gary Fry, Benedict Singleton, Sue Yeandle and Lisa Buckner; commissioned by the DWP

Prepared 16th September 2015