My Blog Blog Description Copyright @AnthonyDotNet https://www.entitledto.co.uk Tue, 12 March 2024 16:19:58 Tue, 12 March 2024 16:19:58 High Income Child Benefit Charge changes: will there be winners and losers? Phil Agulnik https://www.entitledto.co.uk/blog/2024/march/12/is-it-time-to-change-the-high-income-child-benefit-charge Update 12 March 2024: Following the Spring Budget, this is an update to the original blog posted on 28 February 2024. The original blog post is below. The changes to the High Income Child Benefit Charge announced in the Budget last week are welcome. In the short-term, from this April, we will see two changes meaning less people are affected by the charge’s sharp elbows, though the fundamental design of the scheme remains the same. One change is to increase the threshold from which parents start to pay the charge, up from £50,000 to £60,000 a year. The other change is to make the ‘tax rate’ attached to the charge less severe, with the upper income threshold (the point when the value of Child Benefit is taxed away completely) rising from £60,000 to £80,000. In the long-term the Chancellor’s announcement could herald much bigger changes to the policy, and indeed to the whole of the tax and benefit system. We already knew that HMRC was looking into whether it can administer the charge through PAYE rather than through self-assessment, making it possible for employees to pay it more easily. What we found out from the Budget was that the Chancellor has asked HMRC to go further and move to a household basis for assessing income, as we predicted he might do when this blog was first published. The Chancellor said that the move to a household basis for income assessment would occur in April 20206, but in reality, the decision will fall to the next Chancellor (maybe not Jeremy Hunt). It is a big and difficult decision, which faces (at least) three major challenges. First is the problem of creating losers. As the IFS’s Budget analysis shows (see Tom Wernham’s slides), introducing the policy in a cost-neutral way would mean setting the start point of the charge for couples at a joint income of around £86,000. That would mean around half a million two-earner couples being caught by the charge for the first time, and they may be more vocal than the half million households who will gain from the change. Second a household-based charge will be difficult to administer and subject to legal challenge, particularly around ‘edge cases’ where membership of a household is hard to define. Perhaps more important is the change of principle, as the adjustment would fly in the face of the move to individual taxation that came about with the end of the Married Couple’s Allowance in 2000 (for anyone born after 1935). Third, any fundamental change to the policy needs to find an answer to the horizontal equity argument that children cost more wherever you are on the income scale, so it makes sense to levy taxes on everyone rather than through a specific tax on parents. A future Chancellor would be ill-advised to buy-off the problem of creating losers through increasing the threshold income for couples to £120,000 a year. At that level the argument for abolishing the charge completely would be much stronger, as it would raise little money for enormous administrative and legal complexity. And the horizontal equity argument for fully universal benefits will always hold true. More likely, at least under a Labour Chancellor, would be an attempt to mimic the ‘progressive universalism’ that Gordon Brown sought to achieve through tax credits. Shifting the dial on child poverty without extending the reach of Universal Credit implies higher universal benefits, but few politicians embrace the fact that this means higher benefits and higher taxes for all. If progressive universalism comes back into vogue then Child Benefit could become the new Child Tax Credit. Original blog post from 28 February 2024... In the run up to next week’s Budget there is speculation the Chancellor will make changes to the High Income Child Benefit Charge (HICBC), the rule that in effect places an extra tax on Child Benefit claimants earning £50,000 a year or more  [1] . The problems with the policy are legion, but it’s been criticised in particular for its unfairness and its harmful effect on work incentives. But there is an extra issue with the policy that perhaps deserves more attention – its effect on take-up. All these issues are examined below. How the High Income Child Benefit Charge works The HICBC applies whenever someone in a household claiming Child Benefit has an income of more than £50,000 a year. Note that joint income is irrelevant – a couple where both are earning £49,000 are not affected by the charge. It works by HMRC applying a tax adjustment that withdraws 1% of the benefit for every extra £100 received above the £50,000 threshold. The effect is that on incomes above £60,000 the value of Child Benefit is taxed away completely. On earnings between £50,000 and £60,000 the HICBC tax adjustment will be less than the value of Child Benefit received. For this group the main question is the ‘tax trap’ created by the withdrawal of Child Benefit. As the HICBC is based on the amount of Child Benefit received it means larger families can face quite high withdrawal rates. For example: The value of Child Benefit for a family with 3 children is £3,100 a year (from April 2024). This means the highest earners will pay back 31p for every pound they earn over £50,000, so that it is all taxed away when earnings reach £60,000. Once earnings exceed £60,000 the HICBC tax adjustment will be the same value as the Child Benefit received and households face a choice: pay tax or choose to stop receiving the benefit. As we discuss below, it appears that far too many people are making the wrong choice and stopping (or more likely, never starting) their Child Benefit claim. Problems with the policy are growing As highlighted by a recent report from the IFS on tax simplification , the effects of the HICBC are being made worse by the government’s policy of raising revenue through freezing tax allowances and limits. One effect is that more people are now included in the charge, with over 26% of households with children now being liable, double the number paying the HICBC compared to when it was introduced in 2013 at the same cash level. Another effect is that for people with earnings in the withdrawal range above £50,000, the incentive effects of the charge are getting worse. More people paying the charge means more people are aware of how fundamentally unfair it is. The issue is that the income tax system is based on an individual assessment, so any attempt to implement a ‘means-test’ that applies to couples will be unfair or cumbersome. The HICBC manages to be both.  The incentives issue arises from the fact the HICBC places an extra tax on people during the period when it is phased-out, between £50,000 and £60,000 a year. As shown above, for a household with three children the effect is like an extra tax of 31% on these earnings. As a result, the incentive to avoid the tax through reducing work hours, or increasing pension contributions and hence reducing taxable earnings, may be a strong motivation for people to change their behaviour. Notwithstanding whether such changes are for good or ill, economists are rightly suspicious of behaviour that is driven by tax rules rather than economic fundamentals. The HICBC and benefit take-up Our recent blog on benefit take-up  highlighted the fact that the HICBC has had an adverse effect on the number of people claiming the benefit. The latest statistics on take-up of Child Benefit show a very clear trend: the number of families missing out on Child Benefit is growing rapidly. It states: "Since 2012 the take-up rate of eligible children for whom Child Benefit is claimed has reduced steadily year on year, from a high of 97% in 2012 to its lowest level in 2022 of 89%. This is likely related to the introduction of HICBC (High Income Child Benefit Charge) in 2013, which meant that some families no longer claimed Child Benefit." Detailed statistics show that take-up rates for families with children born since the introduction of the HICBC are even worse [2] . The estimates show that, despite the fact Child Benefit is meant to be a ‘universal’ benefit, a quarter of parents with children under one are missing out on their entitlement. That’s well below the 84% level of take-up that Child Tax Credit achieved towards the end of its life, despite the fact it is a ‘targeted’ benefit. Change the message on claiming Child Benefit Academic studies of take-up demonstrate the wide variety of reasons why people don’t claim benefits, including not just individual factors (such as lack of information) but also administrative and policy factors that explain why so many people don’t apply for benefits  [3] . The corollary is that there is no ‘magic bullet’ that could be used to raise take-up rates to 100%, at least in a means-tested system. The one change that really would work would be to reverse the HICBC and return to a universal child payment without income limits, where take-up was over 97%. Failing such a radical reversal, changing the message the government gives out could also really help. The government is already consulting on a change to make it possible for employees to pay the charge more easily. In July last year it announced: “The government wants to simplify the process for customers who become liable to the High Income Child Benefit Charge, particularly for those who currently need to register for Self Assessment to pay the charge. The government will provide details in due course on how it will enable employed customers to pay through their tax code, without the need to register for Self Assessment.” [4] It’s possible that the Chancellor will use the introduction of an HICBC tax code (if this is what the government decides to do) to tackle the unfairness issue, obliging both members of a couple to register for the charge, so that their income can be worked out jointly rather than as individuals. Having an income limit that looks at household rather than personal income would end the unfairness of the HICBC, at least in terms of single earners and multiple-earner families. But it wouldn’t help with the take-up problem. Nor would the other changes to the HICBC that have been proposed, such as raising the income limit from £50,000 to £70,000 or extending the taper for families with more children above the current £60,000 limit. To help improve take-up of Child Benefit the Chancellor should encourage everyone with children to claim it, even if it is taxed back. Simply putting out the message “Claim child benefit and pay the tax” could help, as among the people who decide to claim it again will be many who do not need to pay tax on it at all. And even for those who end up paying the tax, it will ensure they qualify for national insurance credits sooner and more easily than the government’s complex redress scheme [5] . Rather than across-the-board tax cuts, the Chancellor should focus on reforming the worst bits of the UK's crazy tax system, starting with the HICBC. Links: [1] For example, Budget speculation in the Telegraph [2] See 'Figure 5: The percentage of eligible children for whom Child Benefit is claimed by individual age', at May 2022 at  https://www.gov.uk/government/statistics/child-benefit-statistics-annual-release-august-2022/child-benefit-statistics-annual-release-data-at-august-2022#take-up-rate-of-child-benefit [3]  The range of reasons for non-take-up is examined in Fran Bennett’s recent review into benefits take-up at  https://bristoluniversitypressdigital.com/view/journals/jpsj/32/1/article-p2.xml [4]   https://questions-statements.parliament.uk/written-statements/detail/2023-07-18/hcws972? [5]  If all goes to plan, from 2026 it should be possible to claim back any years where the individual's lost National Insurance credits because they failed to claim Child Benefit. However, even if the system is delivered on time, filling in a claim for Child Benefit and paying tax via PAYE will always be easier than making backdated claim for NI credits. The government's most recent announcement is available at https://www.gov.uk/government/publications/tax-simplification-update-january-2024/tax-simplification-update-january-2024#amending-the-parents-national-insurance-credit-child-benefit https://www.entitledto.co.uk/blog/2024/march/12/is-it-time-to-change-the-high-income-child-benefit-charge https://www.entitledto.co.uk/blog/2024/march/12/is-it-time-to-change-the-high-income-child-benefit-charge Tue, 12 March 2024 16:19:58 Spring Budget update March 2024 Wendy Alcock https://www.entitledto.co.uk/blog/2024/march/06/spring-budget-update-march-2024 Like several financial statements we’ve received from the Chancellor in the last few years, today’s Budget was very much focused on supporting middle-income workers. It was also slightly family friendly so, as a result, there will be a double win for some working parents from next month. In an election year we might have expected to see more headline grabbing announcements but, by the end of the Chancellor’s speech, there weren’t many measures announced (especially for low-income households) that we hadn’t already seen coming. We didn’t see any extra cost of living payments being announced or further changes to the Local Housing Allowance from April 2025 onwards. A raise in the benefit cap would also have been welcomed but was not on the cards today. Also, surprisingly, there were few announcements for pensioners. Read on for the relevant changes for people on low incomes that were announced by the Chancellor today. High Income Child Benefit Charge (HICBC) – 6 April 2024 What's changing? From April 2024, the threshold from which parents start to pay an extra tax (via self-assessment) on their Child Benefit is increasing from £50,000 to £60,000 a year. The extra tax is also being made less severe. The upper income threshold, when the value of Child Benefit is taxed away completely, is rising from £60,000 to £80,000. This means 1% of the benefit will be taxed away for every extra £200 a parent earns above £60,000 (instead of 1% for every extra £100 above £50,000). From April 2026 (subject to consultation), the government also plans to move to a household system of administering the HICBC, rather than an individual system, so that single earner families are not disadvantaged. As we mused in our Is it time to change the High Income Child Benefit Charge?  blog last week, this change was well overdue but, in our opinion, it misses a key element, as our Director explains:   “The Chancellor’s changes to the High Income Child Benefit Charge will be welcome news for parents earning under £80,000 a year. But to take advantage of the changes these parents need to make sure they are claiming their entitlement. “We would like to see the government launch a Child Benefit take-up campaign, encouraging everyone to take-up their claim. Even if someone does earn over £80,000 they’ll still be better off claiming Child Benefit and paying the tax back, rather than not claiming at all, because everyone who claims automatically gets credits towards their state pension.” Phil Agulnik, Director, entitledto National Insurance – 6 April 2024 What's changing? The rate of Class 1 National Insurance contributions (NICs) paid by employees is reducing from 10% to 8%. Self-employed people will have their Class 4 NICs reduced from 9% to 6% (before today this was going to reduce from 9% to 8% in April). While this was the main measure announced today it will have a minimal effect for people with low earnings because many don’t earn enough to reach the level at which NICs need to be paid (or if they do earn enough to reach threshold they’re not far above it). This is aided by the fact that tax thresholds are being frozen in 2024/25, which for some low earners will more than cancel out the gain from the NICs rate reduction. Household Support Fund Extension – April to September 2024 What’s changing? The Household Support Fund, a pot of money for local authorities to allocate to local areas of need such as food and energy support for vulnerable households, is being extended for another 6 months.  An extra £500 million will be split between councils around the UK for the period of April to September 2024. As the last pot of money is due to end in just a few weeks’ time on 31 March 2024, this is a welcome announcement. Prepayment meter standing charges – 1 April 2024 What’s changing? The extra standing charges paid by prepayment meter (PPM) users will be removed. This will end the inequity of people with prepayment meters being charged more for their energy than others people. Previously the PPM premium was absorbed by the government’s Energy Price Guarantee but this support is due to end on 1 April 2024. The regulator, Ofgem, announced in February that people with a prepayment meter will continue to be supported so that their standing charges are no more than Direct Debit standing charges from April 2024 onwards. Budgeting Advance repayment periods - December 2024 What’s changing? The period for people to repay Budgeting Advance loans taken out from December 2024 onwards, will increase from 12 months to 24 months. These loans are available to people who receive Universal Credit and need help to pay for emergency household costs, such as buying a new cooker, helping to get  job or to stay in work.   Sources https://www.gov.uk/government/publications/spring-budget-2024 https://www.entitledto.co.uk/blog/2024/march/06/spring-budget-update-march-2024 https://www.entitledto.co.uk/blog/2024/march/06/spring-budget-update-march-2024 Wed, 06 March 2024 19:55:27 Claimants need to pay attention to Managed Migration, particularly before April entitledto https://www.entitledto.co.uk/blog/2024/january/19/claimants-need-to-pay-attention-to-managed-migration-particularly-before-april Nearly ten years after the initial timetable said it would happen, we’re finally getting on to the really tricky part of the Universal Credit (UC) rollout. Welcome to the whacky world of Managed Migration and its best friend, Transitional Protection. Managed Migration is the name DWP has given to the process of forcing claimants to move off their old benefit and on to UC. It has affected around 300,000 households already, although it only really took off last Autumn when the DWP ramped-up the number and range of Tax Credit claimants getting migration notices (the official way of telling them to move on to UC). For remaining Tax Credit claimants, anyone who hasn’t received a migration notice yet should receive one in the next 12 months. If DWP’s plans come to fruition, the final group, Employment and Support Allowance claimants, will migrate in 2028. Why is Transitional Protection important? The problem that Transitional Protection is meant to solve is that UC creates winners and losers. This is because the amount of help UC provides is worked out in a different way to the pre-UC ‘legacy’ system (see our  Universal Credit natural migration  blog from 2019 for more). While DWP doesn’t mind people getting less on UC if they move due to a change of circumstances, it was deemed a bad look to pay less to those going through managed migration when, in effect, they are forcing customers to switch product. So, Transitional Protection was invented to ensure that, where someone was made to move onto UC, they will not be worse off, at least on the date that they switch benefits . The way this is put into operation is that, for people claiming UC because of a migration notice, DWP automatically adds an extra top-up element to their award if they are worse-off. This extra amount is a Transitional Protection element and it works in a completely different way to the rest of UC, bringing with it new complexities that claimants need to be aware of. One of these complexities is that the timing of when to move can be important, particularly if someone will be worse off on UC. Of course, some people receiving a migration notice will get a nice surprise and find they will get more from UC than Tax Credits. If the other features of UC (such as the direct rent payments, claimant commitment and needing to manage things online) don’t put them off, households that find they are better-off on UC should claim as soon as possible. But two-thirds of households moving after receiving a migration notice will receive less (according to the latest DWP statistics), meaning Transitional Protection will be added to their award, and so, for this group, the decision about when to claim can make a difference. Catch a benefits rate rise if you can To put the conclusion first… If the deadline date on your Migration Notice is after 8 April 2024, you may want to delay your claim for Universal Credit until after this date when benefits rates are due to rise. As the migration notice explains, claimants have three months from receiving their notice to make a claim for UC before their Tax Credits end. So, for anyone receiving a migration notice between now when rates are increased, delaying their claim for UC until after rates rise could mean they will be financially better off from 8 April onwards. The reason for this is, as its name suggests, Transitional Protection is only transitional (and it can also only go in one direction - downwards). A helpful explanation comes from DWP’s guidance : "Transitional protection payments are not permanent. They can decrease or end if your Universal Credit entitlement increases." One of the ways UC entitlement increases is when benefits rise (see  [i]  for an exception) from 8 April by 6.7%. Here’s an example to show the impact:    Migration  before 8 April  Migration  after 8 April  Max indicative UC  £1,019  £1,087  Less 55% taper rate  £412.50  £412.50  Indicative UC   £606.24  £674.50  Legacy total  £665.90  £710.52  Transitional Protection  (until 8 April)  £59.66  n/a  Transitional Protection  (after 8 April)  £0  £36.02   In the above example, the claimant will initially receive a £59.66 monthly Transitional Protection element if they move before 8 April. However, the increase in their UC award of £68 due to uprating will erode this to £0 if it comes after their first assessment period. If they wait until after 8 April to move, their Transitional Protection element will be £36.02 and they will receive it in every assessment period until April 2025 (assuming they have no other changes). Protecting household incomes when every penny counts UC creates winners and losers but these have not been evenly distributed as the new benefit has rolled-out. The groups that are most likely to be worse-off under UC are the ones who have been left to the end and who Managed Migration is intended to pick up. Where people let us know they've received a Managed Migration notice, we've added guidance to our Benefits Calculator explaining what it means, how much they might expect in Transitional Protection and what they need to do next. The Managed Migration flag (see image below) then links to our Transitional Protection help page for further information. Sample Managed Migration flag from the entitledto Benefits Calculator We know DWP wants to move everyone on to UC to complete the reform but, in the meantime, this means claimants need to pay close attention to what their move means for their household incomes, especially during the cost of living crisis where every penny counts. -- [i]  One of the groups who might not benefit from the rates rise from 8 April is those who already receive Transitional Protection. For this group any increase in UC will be offset by a reduction in their Transitional Protection. Only when someone’s Transitional Protection has been reduced to £0 will regular benefit increases lead to an rise in the amount of UC they receive. https://www.entitledto.co.uk/blog/2024/january/19/claimants-need-to-pay-attention-to-managed-migration-particularly-before-april https://www.entitledto.co.uk/blog/2024/january/19/claimants-need-to-pay-attention-to-managed-migration-particularly-before-april Fri, 19 January 2024 13:55:44 Autumn statement update November 2023 Wendy Alcock, Phil Agulnik https://www.entitledto.co.uk/blog/2023/november/23/autumn-statement-update-november-2023 If it weren’t for all the spin and speculation over the last few weeks, yesterday's Autumn Statement could almost be described as being ‘back to business as usual’ – at least for the headline announcements in the welfare world on benefits uprating and the Local Housing Allowance (LHA). In effect, the ‘announcements’ were that one measure would follow its usual process (September’s CPI would be used to uprate all working age benefits) and the other would be reset (the freeze to LHA rates that has been in place since 2020 will be lifted). Hardly groundbreaking news! For the last few years people on low incomes have had to travel the rollercoaster of uncertainty before they find out how their finances will be affected the following April. While everyone at entitledto welcomes the uprating and LHA increases announced yesterday we would rather have surety on these issues in the longer term. Until that time, we will continue to dig into the major and minor changes that will affect people on low incomes from each fiscal event. Here are the details of changes announced: Benefits uprating – April 2024 All working age benefits will be increased using September’s Consumer Prices Index (CPI) rate of inflation, which was 6.7%. This includes the following benefits: Adoption Pay, Attendance Allowance, Carer’s Allowance, Child Benefit, Disability Living Allowance, Employment and Support Allowance, Guardian’s Allowance, Incapacity Benefit, Income Support, Jobseeker’s Allowance, Maternity Allowance, Parental Bereavement Pay, Paternity Pay, Personal Independence Payments, Shared Parental Pay, Sick Pay, Statutory Maternity Pay, Tax Credit, Universal Credit. All pension age benefits will be increased using the average annual increase in wages across the UK in September, which was 8.5%. This uses the rules of the ‘triple lock’ which says that pension age benefits will be increased based on the highest of wages (as above), September’s CPI or 2.5%. This includes the following benefits - Pension Credit, State Pension. Local Housing Allowance (LHA) – April 2024 Private renters claiming Universal Credit or Housing Benefit may be able to get more support from April as the maximum amounts available from the LHA will be increased to the 30th percentile of local market rents. At the moment this rule is only being applied for one year. LHA amounts vary based on the area where someone lives and the number of bedrooms they are thought to need. The 30th percentile means that the amount in each category is set to cover the bottom 30% of market rents, so the LHA will cover the rents of up to three in every 10 homes in an area. This means many people will still have to top-up their rent from other income. The level of LHA has been frozen since 2020 (although private rents have increased over this time) and the amount is much less than the 50th percentile we last saw in 2011. National Insurance for employees – January 2024 Class 1 National Insurance will be reduced from 12% to 10% on all earnings between £12,570 and £50,270. National Insurance for self-employed – April 2024 Class 2 National Insurance (currently a flat rate of £3.45 a week paid by people earning more than £12,570 a year) will be abolished. It can still be paid voluntarily. Class 4 contributions will be reduced from 9% to 8% on all earnings between £12,570 and £50,270. Minimum Income Floor for lead carers – January 2024 Note: the date of implementation for this policy was changed from April 2024 to January 2024 on 30 November 2023. Last month, parents of 3 to 12-year-olds in the ‘All work-related requirements’ group of Universal Credit had changes applied to their claimant commitments around the number of hours they were expected to work. From January, the level of the Minimum Income Floor for parents of 3 to 12-year-olds who are self-employed will match the new rules for employees. The rules are that main carers of children of this age are now expected to work (or look for work) for up to 30 hours a week, up from 16 hours for parents of 3 and 4-year-olds and 25 hours for parents of 5 to 12-year-olds. Most other people in this group have 35 hours a week as their expected number of work hours. Here’s our Director Dr Phil Agulnik musing on some of these changes: The Chancellor’s biggest give-away in yesterday's Autumn Statement, the 2% cut in National Insurance Contributions (NICs) for employees, will be of least help to low earners who claim Universal Credit (UC). That’s because, unlike tax credits, which were based on gross earnings and therefore unaffected by tax changes, when net earnings go up UC goes down. The reduction in NICs will, in effect, be ‘clawed-back’ by the 55% taper in UC. The story is the same for self-employed people. The reduction in NICs is a bit more complicated, as self-employed people see a 1% cut in Class 4 rates and the abolition of flat-rate Class 2 contributions. But the interaction with UC is just the same – 55% of the gain is clawed back. Moreover, there is the additional factor for self-employed UC claimants of the Minimum Income Floor, which penalises people for not earning enough. For self-employed claimants with children aged between 3 and 12 the Autumn Statement confirms that this minimum is increasing, because they must work more hours, causing large losses for some claimants and saving the government £80 million on projected UC spending. National living and minimum wages – April 2024 The National Living Wage will increase from £10.42 to £11.44 an hour for those aged 23 and over and from £10.18 to £11.44 an hour for 21-22 year olds. The National Minimum Wage will increase from £7.49 to £8.60 an hour for 18-20-year-olds and from £5.28 to £6.40 an hour for 16-17 year olds and apprentices. Extra transitional element for some receiving SDP – February 2024 Since January 2021, most people who were receiving a Severe Disability Premium (SDP) when they naturally moved to Universal Credit have been receiving an extra transitional payment to compensate for the lower amounts available under Universal Credit. In January 2022, the government lost a legal challenge into the fact it had failed to provide adequate transitional payments to these people if they were also receiving the enhanced disability premium, disability premium or disabled child premium. From February 2024, those who qualify for a SDP transitional payment will receive an additional amount between £84 and £246 a month depending on which disability premiums they used to get. If your SDP transitional payment has been reduced to £0 since moving to UC you can still get these additional amounts you missed out on. Universal Credit surplus earnings threshold – April 2024 The current surplus earnings threshold for Universal Credit of £2,500 will be extended for another year until at least April 2025. It was due to reduce to £300 from April 2022. Back to work plan (mainly announced last week) – various A whole raft of changes to encourage people on Universal Credit to work were announced by the government last week. The focus, from next year and for the next five years, will be on people with long-term health conditions and the long-term unemployed. Changes include expanding schemes for people with mental health problems, offering specialised help to people who have had fit notes after a period of illness, intensive help for people who have been receiving Universal Credit for 7 weeks (as well as further help after 13 and 26 weeks) and more. From late 2024, people in England and Wales will also need to take mandatory work placements if they have not found a job after 18 months. If they refuse, their benefit claim may be closed. Claims may also be closed if people have not engaged with their jobcentre for over 6 months, as long as they only receive the standard allowance of Universal Credit. From 2025, there are also plans to change the ‘activities and descriptors’ needed to pass a Work Capability Assessment for new claimants of ‘new style’ Employment and Support Allowance and some elements of Universal Credit. The government says that ‘Changes will better reflect the greater flexibility and reasonable adjustments now available in the world of work’, such as increased opportunities to work from home, but various charities are worried that the changes will be highly damaging to people with serious health conditions. We will provide updates on this as the situation changes. Source: https://www.gov.uk/government/publications/autumn-statement-2023 https://www.entitledto.co.uk/blog/2023/november/23/autumn-statement-update-november-2023 https://www.entitledto.co.uk/blog/2023/november/23/autumn-statement-update-november-2023 Thu, 23 November 2023 10:54:36 More people are missing out on the benefits they’re entitled to (we think) entitledto https://www.entitledto.co.uk/blog/2023/november/21/more-people-are-missing-out-on-the-benefits-they-re-entitled-to-we-think Without much fanfare, the first benefit take-up statistics since the pandemic were published by the DWP at the end of last month. It’s happened too many times to say “unbelievably”, but as in previous years the statistics only cover pension age benefits and still don’t include an estimate for take-up of Universal Credit (UC). We said it before in our  blog calling for UC statistics to be published , but this is tantamount to giving up on promoting benefit take-up completely. At least for working age people that is. As is the case in so much of benefit policy, pensioners remain protected, with take-up encouraged by DWP and statistics published. As new statistics are available, we’ve taken the opportunity to update our number for the amount that goes missing in unclaimed benefits. For consistency we’ve kept our methodology the same as in previous years and focused our analysis on means-tested benefits where official statistics have been published at some point (except, of course, for UC). This means some benefits, like Carer’s Allowance or Personal Independence Payment, aren’t included. Nor do we include social tariffs and the like. Our new estimate is that £16bn of benefits goes unclaimed (see breakdown in the table below), which is up on our previous estimate. That’s partly because more pensioners are missing out, according to the latest official estimates. But it also includes the £900 cost-of-living payment that eligible people are missing out on, as well as the effect of inflation. Benefit name Date of data used Number of entitled families not claiming Amount unclaimed Council Tax Support 2009/10 2,770,000 2,800,000,000 (a) Child Benefit To Aug 2022 770,000 1,400,000,000 Housing Benefit - pension age 2021/22 310,000 1,000,000,000 Pension Credit 2021/22 800,000 1,700,000,000 Universal Credit To April 2022 1,165,000 7,400,000,000 Cost of living payment n/a 1,965,000 1,700,000,000 Total    5,815,000 (b) £16,000,000,000 Table 1: entitledto's estimates unclaimed means-tested benefits Further notes: All figures, where available, are based on central estimate figures for entitled non-recipients (people who are eligible to claim but for some reason don’t). (a) Using the mid-point of the total amount of Council Tax Benefit unclaimed in 2009/10 (between £1.7 billion and £2.42 billion) this figure has been inflated to April 2022 prices using the Bank of England Inflation Calculator. (b) Not unique families, as some may be entitled to more than one benefit. What we know about take-up: pensioners For pensioners, the only group examined in DWP’s statistics, the latest take-up estimates show that in 2022 more households were missing out on benefits they could claim. After take-up rates for Pension Credit improved in the couple of years before the pandemic, the latest statistics suggest take-up has declined a little. Using DWP’s central estimate, in 2022 around 63% of pensioners who were entitled to Pension Credit claimed it. This is 3 percentage points lower than the previous estimate of 66%, which, because of the pandemic, is for 2020. Given the knock-on effects of the pandemic on benefits administration this is perhaps not too surprising, and for Pension Credit (if not Housing Benefit for pensioners), it only returns the take-up rate to its 2019 level. We won’t be sure for another year, but our expectation is that the most recent statistics are a blip and that take-up rates for Pension Credit will improve in future years. As well as the effect of the pandemic unwinding, there are encouraging signs that DWP’s take-up campaign for Pension Credit is working. Though unfortunately, one of these signs is extended waiting times between applying for the benefit and the first payment being made (as reported in a survey of benefit advisers in March 2023 ). In addition, the effect of the Cost-of-Living payments may also be an important factor in promoting take-up. As highlighted in our blog on the Cost of Living payments and benefits take-up , the deadline for making an application may motivate more pensioners to claim the benefits they are entitled to. It means that, for instance, people who are eligible to claim Pension Credit but don’t get it today have until 10 December to make their application and receive a ‘bonus’ £300 Cost of Living Payment. What we know about take-up: Child Benefit As well as estimates for Pension Credit, statistics on take-up of Child Benefit have also been maintained as a constant series by HMRC (who administer the benefit). They show a very clear trend: the number of families missing out on Child Benefit is growing rapidly. The government’s statisticians are commendably honest about the issue and its cause. They comment: “ since 2012 the take-up rate of eligible children for whom Child Benefit is claimed has reduced steadily year on year, from a high of 97% in 2012 to its lowest level in 2022 of 89%. This is likely related to the introduction of HICBC (High Income Child Benefit Charge) in 2013, which meant that some families no longer claimed Child Benefit. ” The growth in the number of families missing out on Child Benefit looks set to increase, as take-up rates for families with children born since the introduction of the HICBC are even worse. The estimates show that, despite the fact that Child Benefit is meant to be a ‘universal’ benefit, a quarter of parents with children under one are missing out on their entitlement.  That’s well below the 84% level of take-up that Child Tax Credit achieved towards the end of its life, despite the fact that it is a ‘targeted’ benefit. What we might know about take-up: Universal Credit Due to the lack of published data for UC and other working-age benefits we have had to look outside government to get an insight into how take-up rates might be changing. The University of Essex research ' Analysis of benefit take-up using UKHLS and UKMOD ’ (pdf) in effect replicates the work of government statisticians on take-up of Pension Credit and Child Benefit, but uses a new methodology and different data so that working-age benefit take-up rates can also be estimated. Unlike official statistics, which use the Family Resources Survey’s annual ‘snapshot’ of the population, the university’s research is based on the first nine waves of the UK Household Longitudinal Study (UKHLS). The main results are shown in the graph below, reprinted from that research. Table 2: Analysis of benefit take-up using UKHLS and UKMOD - University of Essex - June 2023 (slide 19) The research shows that, for Pension Credit, there is a substantial difference with official statistics, with the UKHLS research showing lower take-up rates (of around 40% compared to the DWP’s 65%) but also a steady improvement during the 2010s. More reassuringly, for Child Benefit, it shows a very similar level and pattern of take-up to the official statistics. For Universal Credit, because of the gradual transition from so-called ‘legacy’ benefits to UC, the research finds that it’s not possible to divide analysis between the two and a series that combines these benefits is presented. The effect is to report on the take-up of working-age means-tested benefits, which, according to the UKHLS, has steadily declined during the 2010s. Tentatively, and with suitable caveats about the data being new and unofficial, we can only conclude the steady decline means the problem of working-age people missing out on benefits is getting worse. Despite the claims made when it was launched in 2013, it seems that UC has made it more, not less, likely that people will miss out on benefits they are entitled to. https://www.entitledto.co.uk/blog/2023/november/21/more-people-are-missing-out-on-the-benefits-they-re-entitled-to-we-think https://www.entitledto.co.uk/blog/2023/november/21/more-people-are-missing-out-on-the-benefits-they-re-entitled-to-we-think Tue, 21 November 2023 14:18:03 Using entitledto for social policy research entitledto https://www.entitledto.co.uk/blog/2023/october/25/using-entitledto-for-social-policy-research In June we published a blog to let the world know about a new project we were trailing, entitledtolearn. You can read more about that project in this linked blog but, during its review, we realised one of the aspects that went really well was the focus groups we held with our users to find out their views in relation to education and training. To recruit people for our focus groups we used a new ‘surveys’ functionality in our benefits calculator. This blog outlines the way this new service works, as well as describing a few other ways we have helped researchers over the last few years. If you’re involved in research or want to speak to low-income households then read on – we might be able to help you too! Example 1: Surveying specific groups about the effect of benefits reforms Before Universal Credit the benefits system encouraged people to work 16, 24 or 30 hours depending on their circumstances. Between 2012 and 2020 we carried out some research into the reasons why people worked a small number of hours and, by implication, whether this was influenced by rules in the benefits system. We created a questionnaire on SurveyMonkey and recruited people to it by linking from a help page on our website that was presented to people working 1-15 hours a week. The link resulted in over 8,000 responses to our survey. The point of the survey was to see the extent to which labour market behaviour was influenced by rules in the benefits system. It found that employers’ unwillingness to provide extra hours and childcare rules were by far the biggest reasons why respondents were not working more hours (the image above shows the results of this question). The effect of benefit withdrawal rates, or changes at 16 hours (as occurred under tax credits), was mentioned as a factor by only 1 in 10 people who responded. It's not a fully scientific survey, but it does help show a picture of what influences people’s decisions in practice. Example 2: Recruitment of specific groups for qualitative research In 2019 we were approached by the Church of England and the Child Poverty Action Group (CPAG) because they wanted to talk to people who were affected by the two-child limit. We were able to help them with their research because we naturally identify affected households when they use the calculator to be able to calculate their benefits entitlements [1]. To recruit people for the project we put a link on the message that we display in the benefits calculator to users affected by the two-child limit, inviting them to fill in a survey about how it had affected them (see image above). The responses from individuals about their experience have been used to provide qualitative background to the effect of the limit. The latest report ‘ Six years in: the two-child limit ’ can be found on the CPAG website. The researchers also recruited some of the people who responded to the survey to take part in focus groups. Example 3: Access to anonymous data for all groups (with optional recruitment for focus groups) The lesson from our work with CPAG and others was that the calculator worked well in helping researchers get feedback from people affected by the benefit reforms already highlighted by the benefits calculator. We realised though that we needed a new way to help researchers hear from low-income households about other issues. As a result, we set about creating the surveys page. The main difference that our new surveys functionality makes is that it creates a way to ask about topics of interest that we don’t already cover in order to calculate someone’s benefit entitlements. For example, the images above show a survey we ran as part of our entitledtolearn project, where we needed to recruit people to take part in focus groups into financing education and training. We have also used this page to help recruit user groups for the Learning and Work Institute and for the Work Foundation , an academic research body based at the University of Lancaster. At the moment, this functionality allows for three bespoke yes/no questions to be asked to everyone carrying out a benefits calculation. The anonymous responses to these questions can then be accessed in their own right, or, if more questions are needed, we can collect email addresses for people willing to be contacted about the research and/or to take part in focus groups which we forward on to a research team.   Can we help you to reach low-income households for your research? We believe social policy research is vitally important in shaping public services and providing evidence for decision makers. If you have a project or piece of research where you need to hear from people on a low income, then we might be able help. Our service is straight-forward. All you need to do is think about the questions you want to ask and, if recruiting for a focus group, how much you want to offer people to take part. We agree beforehand which of the examples above would work best for your research, as well as the copy to be used on our website, and we can be up and running within a short timeframe. For the sake of transparency, we may need to charge a small admin fee for these services but we will ensure we find the easiest solution for your needs.  Get in touch if you think we might be able to help you.   Footnotes: [1] The way that the two-child limit was introduced meant that at the outset only a relatively small number of claimants were affected. The rules were (and are) that most families with a third child do not get any additional payment if the additional child was born after 6 April 2017. The reform is still rolling out, currently affecting over 750,000 households (or one in ten children) but when the reform started relatively few families were affected (see Figure 12 at Gov.uk official statistics ). https://www.entitledto.co.uk/blog/2023/october/25/using-entitledto-for-social-policy-research https://www.entitledto.co.uk/blog/2023/october/25/using-entitledto-for-social-policy-research Wed, 25 October 2023 13:46:13 entitledtolearn – What we’ve learned about the world of adult training entitledto https://www.entitledto.co.uk/blog/2023/june/entitledtolearn-what-we-ve-learned-about-the-world-of-adult-training At entitledto, we are always on the lookout for ways to help people on low incomes so they can better their own lives. As a result, in 2022, we trialled a new service aimed at helping connect potential learners with places on free and government funded training courses. The new project, called entitledtolearn, was funded by Ufi VocTech Trust , and was a collaboration with The Digital College . What was our original aim? entitledtolearn was designed to provide clear guidance to potential learners regarding the opportunities available to them to access training and education so that they could progress in the world of work. There are documented skills gaps among the UK workforce, and while there is government funding available to adults looking to upskill and reskill, often these entitlements are unknown to potential learners. entitledtolearn aimed to close this gap, working to help its users find placements on free training and education courses. What did we learn? Our main takeaway was that some things don’t end up working, and unfortunately entitledtolearn was one of them. We’ve prepared a report detailing our findings about the world of work and training.  Read on for a summary, or you can access the full report and appendix to find out more. How did it work? We advertised entitledtolearn via a panel displayed at the conclusion of a benefits calculation on entitledto: When users clicked through to the entitledtolearn website, they were shown various job sectors, and courses in their area. If they wanted more information about the course, they would be contacted by the entitledtolearn account manager, who would help them find the right course, ultimately putting them in touch with a relevant training provider. The end result was that despite successfully placing a number of learners on courses, entitledtolearn was not able to place the majority of people who got in contact. The user base expressed a clear interest in starting training, with a view to upskilling and improving their wages and quality of life, but many of the requests of potential learners could not be fulfilled. The most significant challenge was the lack of correspondence between the funded courses available, and the courses requested by users, and this extra administration cost turned out to be larger than expected. What happens next? entitledtolearn was designed with the intention to transition to a service paid for by training providers after the period funded by the Ufi VocTech Trust. As our full report explains, this ended up not being feasible but we are pleased to leave a number of other legacies, including: This report (click the image to access the pdf) and its Appendix : T he connection made between entitledtolearn and the Learning & Work Institute . And, last, but by no means least, we have created a new help page, Funding for Learning , which we hope you find useful. https://www.entitledto.co.uk/blog/2023/june/entitledtolearn-what-we-ve-learned-about-the-world-of-adult-training https://www.entitledto.co.uk/blog/2023/june/entitledtolearn-what-we-ve-learned-about-the-world-of-adult-training Fri, 16 June 2023 11:32:18 Council Tax Reduction schemes in England 2023/24 Karen Holmes, Phil Agulnik https://www.entitledto.co.uk/blog/2023/may/council-tax-reduction-schemes-in-england-202324 Since their introduction ten years ago, entitledto has run a survey of LAs’ Council Tax Reduction (CTR) schemes so that users of our benefits calculators can get accurate and up-to-date information about their entitlement to this benefit.  Each local authority’s website is reviewed to find out if there was a change to their CTR scheme in the last year and, if so, the details of the scheme are updated in our rolling dataset. All of England's 296 schemes are included in our dataset and are available in our calculators. Another year of increasing support for those in need Each year we also  publish a CTR review, reporting on the findings of our survey. In setting CTR schemes for 2023/24, LAs have had to balance the competing claims of protecting their own council budget with protecting citizens in troubled times. On the one hand, real terms reductions in government funding and increased demand for LA-funded care mean there is a tendency for other council services to be squeezed, which in the case of CTR can only come about through changing scheme rules to cut awards. On the other hand, the effect of the cost-of-living crisis on low-income households dominated most council’s agendas this year, and one way of helping them is through making the CTR scheme more generous. Moreover, Council Tax bills rose by 5.7% on average in 2023/24, and protecting the existing CTR scheme prevents claimants facing the full effect of rising bills. As with 2022/23, we found that most of those making changes to their schemes this year moved towards making them more generous. Some of the trends we found this year were as follows: Around 13% of local authorities in England changed how they calculate Council Tax Reduction for 2023/24 (39 local authorities). The most common change was to increase the maximum support available for the poorest households (29 local authorities). Only one local authority reduced their maximum support. The second most common change was to introduce an income-banded scheme (12 local authorities). Around 30% of Council Tax Reduction schemes are now income-banded. We’ve seen 11 other changes which make schemes more generous by way of capital rule changes, extra income disregards, removal of band caps and reduction of minimum awards. For more detail on our findings you can download a copy of the full 2023/24 report . We can also provide a further report detailing the now 90 income-banded schemes in place across the country. Use our  contact us form  to request a copy. Further ways we can help you If you work for a local authority that’s thinking of changing its CTR scheme we may be able to assist you. Please get in touch! Use our  contact us form  to let us know how we may be able to help. https://www.entitledto.co.uk/blog/2023/may/council-tax-reduction-schemes-in-england-202324 https://www.entitledto.co.uk/blog/2023/may/council-tax-reduction-schemes-in-england-202324 Tue, 16 May 2023 10:20:29 Billions of means-tested benefits remain unclaimed each year entitledto https://www.entitledto.co.uk/blog/2023/may/billions-of-means-tested-benefits-remain-unclaimed-each-year For the past few years we have reported on the amount of income-related benefits being left unclaimed by those entitled to them. Due to the DWP gradually reducing the amount of data it releases about take-up, the last blog we published in February 2022  wasn’t straightforward to produce but our benefits boffins came up with two ways to estimate the amounts of means-tested benefits that were potentially available to new claimants. One of these estimates included the DWP’s data about legacy benefits and the other included our own interpretation for Universal Credit, which has never been made available. Although no new data has been released, we are frequently asked for up-to-date figures. After all, shouting about unclaimed billions is a great way to try and encourage people to check if they are one of the millions missing out. With this in mind, as well as the news coverage earlier this week of a Policy in Practice report about take-up, we have updated our Universal Credit based estimates below. We have chosen just this methodology because legacy benefits are no longer available for new claims and we felt that including them could confuse the message that everyone should check if they are entitled to make a new claim. A note about the Policy in Practice report Before we dig into our own data, it’s interesting to see that, despite using different methodologies, our data is very similar to that published by Policy in Practice earlier this week. Its headline figure is larger but that’s because it included several benefits we have not. These are ones where there has never been any official figures to go on (including Carer’s Allowance, where the rules for who qualifies are too complicated to make an estimate possible), and a number of allowances and social tariffs that are ‘passported’ from an entitlement to a means-tested benefit. Despite the lack of official data, both of our reports show £7.5 to £8 billion of Universal Credit is unclaimed by around 1.2 million households. And around £3 billion of Council Tax Support is unclaimed by around 2.7 million households. Pension Credit, Housing Benefit for pensioners and Child Benefits data is comparable too. entitledto’s estimate of unclaimed means-tested benefits Note: We accept, of course, that our estimates below involve some speculation and if the DWP provided their own statistics on UC take-up we would use these instead. To estimate the amount of unclaimed Universal Credit we have assumed that take-up rates for the new benefit are the same as the average for the six legacy benefits it replaces, with about 25% of eligible households failing to claim their entitlement. Based on the most up to date statistical bulletin  of the number of households claiming UC and the average (mean) amount of UC paid to households (November 2022, when 4.9 million households were on UC and the average payment was £820) we estimate this equates to just over £8 billion unclaimed. Benefit name Most recent date of published data Number of entitled families not claiming Amount unclaimed Council Tax Support 2009/10 2,770,000 3,050,000,000 (a) Child Benefit To Aug 2022 770,000 1,300,000,000 (b) Housing Benefit - pension age 2019/20 220,000 1,000,000,000 (c) Pension Credit 2019/20 770,000 1,710,000,000 (c) Universal Credit To Nov 2022 1,215,000 8,000,000,000 Total    5,745,000 (d) £15,060,000,000 Further notes: All figures, where available, are based on central estimate figures for entitled non-recipients (people who are eligible to claim but for some reason don’t). (a) Using the mid-point of the total amount of Council Tax Benefit unclaimed in 2009/10 (between £1.7 billion and £2.42 billion) this figure has been inflated to March 2023 prices using the Bank of England Inflation Calculator. (b) We used 2022/23 Child Benefit rates to work out the amount unclaimed as this was the financial year for the most recent data . (c) Data from 2019/20 has been inflated to March 2023 prices using the Bank of England Inflation Calculator. (d) Not unique families, as some may be entitled to more than one benefit. Why we need up-to-date take-up data The DWP’s failure to provide statistics on working-age benefit take-up has already gone on too long and must not become permanent. The act of publishing official data makes the problem of low benefit take-up visible, acknowledges the issue, and if we are lucky is accompanied by an action plan to tackle it. Failing to publish official take-up rates can too often lead to a failure to do anything. There is a stark contrast between the successful take-up campaign for Pension Credit (backed by recent take-up stats) and the silence around take-up of Universal Credit. Moreover, we can’t learn lessons about social security design without knowing what’s happening to take-up rates.  The recent history of Council Tax Benefit (CTB) illustrates these problems. Because CTB was localised in 2013, and no longer connected to the DWP, it was the first of the take-up statistics to be axed. As far as we are aware no take-up statistics have ever been produced on any of the new local schemes. As expected, this means the issue of take-up is often not considered when local authorities’ review their schemes. Moreover, because we are unable to say whether take-up of the localised schemes is better or worse than under CTB, we can’t draw proper conclusions about the pros and cons of this benefit reform. Ironically, HMRC’s continued publication of Child Benefit take-up statistics shows how useful these estimates can be, helping to highlight the growing problem of reduced take-up of this benefit since the 'High Income Charge' was introduced in 2013. For individuals, it means there should be clear advice to claim Child Benefit and then repay it through the income tax system when the time comes: at worst people affected by the High Income Charge will receive an interest-free loan from the government, and they could be one of the half a million families missing out. For policy evaluation, the take-up statistics clearly illustrate the fact that selectivity (of any form) reduces benefit take-up. Help us encourage everyone to check if they are entitled, now! Until such time as the DWP decides to publish a full set of take-up statistics we will continue to do our best to provide our estimates to encourage people to check their entitlements. Our free tools are here to help people quickly work out what support they may be entitled to. Please do share them with friends and family so they can check what help they may be able to claim.   Further sources: https://www.gov.uk/government/statistics/child-benefit-statistics-annual-release-august-2022 https://www.gov.uk/government/statistics/income-related-benefits-estimates-of-take-up-financial-year-2019-to-2020 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/222914/tkup_first_release_0910.pdf https://policyinpractice.co.uk/new-analysis-missing-out-19-billion-of-support-goes-unclaimed-each-year/ https://www.entitledto.co.uk/blog/2023/may/billions-of-means-tested-benefits-remain-unclaimed-each-year https://www.entitledto.co.uk/blog/2023/may/billions-of-means-tested-benefits-remain-unclaimed-each-year Fri, 05 May 2023 12:22:06 Universal Credit: Marks out of 10 on its 10th birthday entitledto https://www.entitledto.co.uk/blog/2023/april/universal-credit-marks-out-of-10-on-its-10th-birthday This Saturday marks an important milestone in the evolution of the UK’s benefit system. Ten years ago, on 29 April 2013, the first claims to Universal Credit (UC) were made by newly unemployed people living in the North West. According to Iain Duncan Smith, Work and Pensions Secretary at the time and architect of the reform, these new claimants would enjoy a better, simpler system, with support from six different benefits combined into one. In particular, rather than switching benefits when entering or leaving work, there would be one system whatever an individual’s employment status. Launching the benefit, he claimed that UC will “help people to move into and progress in work…it will be simple to understand and administer.” Since 2013 UC has been rolled out to all parts of the UK and 4.3 million households currently receive a payment. Even so, around 2.5 million households are still on the old ‘legacy’ benefits that UC replaced. And it’s true to say that UC had a mixed reception from recipients, at least during its first few years. So where does UC stand now as a public policy reform? We decided to mark UC’s tenth birthday by providing an assessment of what’s good, bad and indifferent in the way UC’s been designed and implemented. We’ve given it marks out of ten in each of ten categories: adaptability, administration, connectivity, durability, effect on poverty, effect on work incentives, scalability, simplicity, system migration and take-up. The table below provides a summary but the full report digs a little deeper. You'll see we’ve given UC top marks in relation to scalability but nothing for system migration, with a range of marks in between. Overall, we give it four marks out of ten and our view is that Universal Credit is not a complete disaster, particularly compared to some other reforms introduced since 2010, but it’s very far from a triumph. Social security policy definitely deserves better. Download the full report for more detail about each category. entitledto’s Universal Credit scores Adaptability score = 2 It only works for ‘typical’ monthly-paid employees. Weekly-paid workers see awards systematically vary. Administration score = 6 It’s got much better. But digital-only application is still a challenge to many. Connectivity score =  3 The system was not set up to share data. Durability score =  4 Might limp on to 15 years, the standard duration for means-tested benefits for working-age people. Effect on poverty score =  2 The minimum income standard has fallen. Effect on work incentives  score =  4 The taper rate is now down to 55%, but by getting rid of work hours rules UC has created a new ‘cliff edge’. Scalability score =  10 The online system was proven to scale well in the Covid-19 pandemic. Simplicity score =  4 If you are new to benefits it’s better, but as a whole the system is more complex. System migration score =  0 Only two thirds there after 10 years, and unlikely to ever be completed. T ake-up score =  5 Half marks as unknown. Average = 4/10 https://www.entitledto.co.uk/blog/2023/april/universal-credit-marks-out-of-10-on-its-10th-birthday https://www.entitledto.co.uk/blog/2023/april/universal-credit-marks-out-of-10-on-its-10th-birthday Thu, 27 April 2023 08:55:28 Higher benefit rates mean workers need to check their entitlements Phil Agulnik https://www.entitledto.co.uk/blog/2023/march/higher-benefit-rates-mean-workers-need-to-check-their-entitlements In terms of how it affects benefits claimants the most important announcement from Jeremy Hunt didn’t come in today’s Budget but in November’s Autumn Statement, when the government confirmed the 10.1% increase in benefit rates that kicks in next month. For people who are already claiming benefits April’s increase will mean the amount they receive is finally catching up with rises in the cost of living (though private renters are less generously treated, as discussed below). As with all benefit increases, an additional effect is that people with earnings that were previously too high to qualify may now be entitled, as from April households can earn more before their award is reduced to zero. That’s why next month’s increase represents an important opportunity to promote benefit take-up, as it’s worth everyone checking even if their circumstances haven’t changed. The effect of the benefit increase will be reinforced by another decision that was made in the Autumn Statement but does not come in until April: the freeze in the level of the income tax (and NICs) personal allowance. In an ideal world, or at least a more rational one, all parts of the benefits, tax and NICs systems would be increased by the same rate (perhaps by inflation or by earnings growth, ideally the latter to keep in step with the labour market). By and large that would mean the relationship between how much you earned and benefit entitlement remaining the same over time, with working claimants moving off and on benefits as their circumstances or work hours changed. Instead, from this April and continuing for the duration of the allowance freeze, more workers will become entitled to benefits even if their earnings are barely keeping pace with prices. That’s because the tax system is squeezing workers’ net earnings, through the ‘fiscal drag’ created by freezing personal allowances, while benefit levels are going up. The effects of these changes for a working couple without children It’s often helpful to look at a ‘typical’ family to see the effect of changes in benefit and tax rates from year to year. In this case we’ve used an example family who do not have unusually high rent or other costs but who represent the group who are mostly likely to be missing out on benefits – people who are in work who mistakenly think their level of earnings puts them above the reach of benefits. Let’s look at the case of a couple without children who both work and who rent privately at above the maximum rate allowed under the government’s rules (we’ve assumed they live in outer north London, where the rent cap is £230.77 a week for a couple). At the moment this household qualifies for Universal Credit if, between the two individuals, their gross earnings are under £38,800 (assuming standard tax, NICs and 5% pension contribution at these earnings). Because of the increase in benefit rates from April this cut-off point increases to £39,700. It’s a fairly modest increase but indicative of the direction of travel, with benefit entitlement creeping further up the earnings scale. There are two important things to note about this case. The first is that while their UC payment will be close to zero (we have constructed a case that is near the cut-off point), any entitlement at all, even a few pounds a month, means the household qualifies for the cost of living payments worth £900. My blog from last summer discusses how one-off payments make checking for benefits even more worthwhile. The second point is that the increase is relatively modest because limits on private rents have been frozen, rather than increasing in line with rent levels as the ‘Local Housing Allowance’ system was originally designed to do. The effect is that, for this couple and all other claimants in the private sector paying rent above the limit, April’s increase in benefits will be used up (sometimes in full) by rent increases they have to meet out of their personal needs amount. In effect, the generosity of this year’s benefit uprating for private renters is much less than implied by the headline rate, which in turn has the effect of slowing down the increase in the level of earnings that qualify for benefits. The effects of these changes for a working couple with childcare costs For families renting in the social sector, where rent increases are fully reflected in benefit rules, the increase in the reach of Universal Credit will be a bit higher than the example above. But for families with childcare costs over the existing maximum amount there will be a huge jump in the reach of benefits up the earnings scale. One of the bigger benefit changes the Chancellor announced was that from July this year the maximum amount Universal Credit claimants can include for childcare costs for one child is going up to £951 a month, from £646 a month at the moment (where it’s been fixed since the inception of UC nearly ten years ago). The amounts for two or more children are £1,630 a month (up from £1,108). Note though that the limit is not increasing for people who claim Child Tax Credit, even though the cap has been fixed all the way back to 2005 in that system. This unequal treatment means that the financial argument for tax credit claimants with childcare voluntarily moving to UC will be even stronger come July (for most claimants; it's important to note that exceptional circumstances can affect better-off/worse-off calculations). We can use another worked example to see what the increased limit would means for a family with typical childcare costs, in terms of where the cut-off point for benefit entitlement will fall come July. Take the case of a couple who own their own home (so do not get support with rent), who both work and who have one child in full-time nursery. We’ve assumed that they pay the national average amount for a full-time nursery place, which according to a survey by the charity Coram amounts to £14,836 per year (which exceeds even the higher cap the Chancellor has introduced). Running through the numbers shows that, in 2022/23, eligibility for Universal Credit would run out for this couple when their earnings (between the two of them) reached £44,000 a year. However, from July when the childcare cap increases, and including the increase in benefit rates from April, the point where eligibility runs out will be when their joint earnings exceed £57,000 a year. That’s a very substantial increase in the earnings level where benefit entitlement is extinguished. Means-tested support is growing Increasing benefits rates is the right thing to do, to prevent the poorest people in society falling ever further behind the rest, and the increase in benefits in April is to be applauded. Similarly, the benefits system can be a good way of targeting support, in the case of today’s Budget targeting help on families with childcare costs on low(er) earnings. Of course it means more people will qualify for means-tested benefits than would otherwise be the case, but unless the public are willing to pay the price for universal benefits and services then we must accept that extended eligibility is the logical price for the current policy mix. https://www.entitledto.co.uk/blog/2023/march/higher-benefit-rates-mean-workers-need-to-check-their-entitlements https://www.entitledto.co.uk/blog/2023/march/higher-benefit-rates-mean-workers-need-to-check-their-entitlements Thu, 16 March 2023 15:49:59 Spring Budget update March 2023 Wendy Alcock https://www.entitledto.co.uk/blog/2023/march/spring-budget-update-march-2023 Like most years, news reports over the last few days may have drip fed us most of the announcements we heard in today’s Spring Budget but, on the day, there’s often a little more devil in the detail. The themes of the Budget were split into what the Chancellor described as his four E’s - Employment, Education, Enterprise and Everywhere (i.e. levelling up) – his key priorities to support the country’s economic growth. After listening to the Chancellor’s speech and ploughing through the supporting documents I’ve listed the policy changes I think you’ll find useful below. Help with childcare costs The extra help to cover increasing childcare costs being made available to working parents claiming Universal Credit are threefold: Increased free hours for children under three For parents in England working over 16 hours a week (if in a couple, both will need to be working these hours) they will eventually be able to receive up to 30 hours free childcare a week for 38 weeks a year. This will be rolled out in stages with dates varying by a child’s age so nurseries have time to plan for the increase in demand, although we know this is easier said than done because the sector is already struggling. The stages are: From April 2024, all working parents of 2-year-olds can access 15 hours childcare a week From September 2024, all working parents of children aged 9 months up to 3 years old can access 15 hours childcare a week From September 2025 all working parents of children aged 9 months up to 3 years old can access 30 hours free childcare a week At the moment, families get free childcare for 38 weeks for three and four years olds, either for 15 hours a week or 30 hours a week based on their circumstances. Some families can receive 15 hours a week for some two year olds. Increased maximum amounts per month From July 2023 the maximum amount of help available with childcare costs under Universal Credit will be increased to £951/month (from £646) for one child and £1,630/month (from £1,108) for two or more children. The maximum childcare costs amount has not increased since the inception of UC nearly ten years ago, and was itself based on the tax credit limit that was set in 2005, which partly explains the 47% increase now. The monthly amounts will also be increased by CPI inflation each year until 2027/28. Helping to pay for childcare in advance From the summer of 2023,when a parent moves into work or is increasing their hours, they will be able to claim for help with their first month’s childcare costs before having to pay for their childcare. At the moment, fees usually need to be paid upfront and reclaimed. On the flip side of this earlier and increased financial support, lead carers of young children (aged 1 and 2) will need to meet a work coach so that they can prepare for returning to work, and parents of older children (aged 3-12) will need to look for work or increase their hours to meet their claimant commitment. Helping more people into work Another area that came under the Employment theme was helping the 7 million working age adults (excluding students) who are not currently in work. We’d heard faint whispers of changes to the Universal Credit taper rate and/or work allowance, which would allow earners to keep more of their earnings, but unfortunately this was not included. Again, there were three main announcements of interest: Disabled people A new policy paper called Transforming Support: The Health and Disability White Paper was released at the same time as the Budget. The paper outlines the government's plans to help more disabled people (and people with health conditions) to start, stay and succeed in work. As a White Paper, the policy areas included could take years to be implemented (if they ever are) but the main idea is that the assessment of the level of an individual’s disability will be separated from whether they are working, so that disabled people will be able to work if they want to without fear of their benefits being adversely affected. The headline announcement in the White Paper is that the Work Capability Assessment (WCA) will be abolished for disabled people making new claims for Universal Credit. This was described by the Chancellor as the biggest reform to the welfare system in a decade. At the moment people need to have a WCA and be found too ill to work in order to receive a higher level of help from Universal Credit, but the proposal is to link this to their existing disability benefits instead, which they will have already passed an assessment for. Like most policy amendments there are winners and losers of these changes, but it’s still early days and so we will be watching this space as the paper is debated over the next few months/years. A new voluntary scheme called ‘Universal Support’ also intends to help up to 50,000 disabled people a year find more work. Over 50 year olds The number of people in this age group who are not working is increasing (it is currently 8% higher than the level before the pandemic) and so the government are responding through expanding the ‘mid-life MOT’ scheme and by creating a new ‘Returnership’ scheme (think Apprenticeships for older people). People without health conditions Those in the ‘All work-related requirements’ group of Universal Credit will have their Administrative Earnings Threshold (the minimum amount they can earn without needing to have increased meetings with their work coach) increased from the current equivalent of 15 hours of earnings at the national living wage to 18 hours. This is one reason the government expect sanctions to increase and have planned accordingly for this in their costings (including paying for more training for work coaches to ensure they are applying sanctions effectively). Sadly, this is despite evidence suggesting sanctions are not an effective way of encouraging people to increase their earnings. The AET rules for couples are also changing. At the moment couples need to earn the equivalent of 24 hours of earnings at the national living wage between them, but this is being removed so that each person will need to meet the new 18 AET rules individually. Help with household costs The only announcement here was that the current Energy Price Guarantee (EPG), which places a limit on the amount we can be charged per unit of gas or electricity, is being extended for three more months. The EPG currently subsidises a typical household’s energy bill limiting it to £2,500 a year, but this was planned to increase to £3,000 from April 2023. The typical bill amount will now remain at £2,500 until the end of June 2023. From July, households will pay the lower of the Ofgem Price Cap or the £3,000 typical EPG until the end of March 2024. One change we had hoped to see, but which was regrettably missing, was a revisit of November’s announcement to the freezing of the Local Housing Allowance for private renters. The freeze will remain and so private renters may not have increases in rent covered by their benefits in the new year. If this applies to you, you may be able to apply for a (Discretionary Housing Payment} from your local authority to cover any shortfall. Other areas announced And, finally, a few less shouted about changes before I wrap up this year’s review: Surplus earnings The current £2,500 surplus earnings threshold for Universal Credit (above which excess earnings can be carried forward into a later assessment period) will stay in place for another year. It was planned to reduce to £300 at some point but the policy of a much higher limit has in practice been extended each year. Transitional element for Severe Disability Premium (SDP) claimants This top up payment for people who were getting an SDP before being moved to Universal Credit will be increased by CPI inflation in April 2023 and each year until 2027/28. The payment has so far been £120, £285 or £405 per month (without increasing each year) based on circumstances (see our Transitional Element help page for more info). For further info on the Spring Budget see the Spring Budget supporting and related documents on Gov.uk . https://www.entitledto.co.uk/blog/2023/march/spring-budget-update-march-2023 https://www.entitledto.co.uk/blog/2023/march/spring-budget-update-march-2023 Thu, 16 March 2023 12:53:43 Supporting Londoners to access advice and guidance entitledto https://www.entitledto.co.uk/blog/2023/february/supporting-londoners-to-access-advice-and-guidance Against the background of rising levels of hardship, triggered by a combination of the pandemic and the current cost of living crisis, last year the GLA launched its ‘Cost of living – Digital tools’ programme. The aim of the programme was for organisations to provide Londoners with new tools that improve   awareness of, and access to, information about rights and entitlements, in order to mitigate the effects of the cost of living crisis.   entitledto was delighted when our AdviceConnect proposal was accepted and we are even more pleased to announce the service went live on our public benefits calculator at the end of last month. We also want to publicly say thanks to Advice Local , as its directory of local support and advice organisations is an integral part of the AdviceConnect functionality.  For those who wish to see a detailed overview of our project, click the image below to find out more about the background to the programme, our approach and the project outcomes. For a shorter summary of our new service, please read on… Introducing AdviceConnect When a user completes a calculation on our public benefits calculator they are presented with a results page outlining all their potential entitlements. For any Londoners completing a calculation their results page now includes a panel helping them to access further advice and guidance based on their postcode and the circumstances of their household. The panel has three variations: The household is not entitled to benefits If the entered information suggests the household isn’t entitled to benefits they will be presented with the following panel so that they are able to check for further local sources of support: The household is entitled to benefits – simple circumstances If the benefits situation is relatively straightforward, without any complicating factors, they will be presented with the following panel: Based on postcode this panel provides links to a list of local advice organisations provided via AdviceLocal as well as a link to the user’s local authority cost of living hub for further information about local schemes and entitlements. The household is entitled to benefits – more complex circumstances For people who may have a more complex benefits background (for example a person with a disability lives in the household, there is a large family or someone of pension age) they will be presented with the following panel: As well as the list of local advice organisations and link to the person’s local authority cost of living hub, users who see this panel are given the option to email themselves a link to their online calculation, which also includes a pdf of their benefits calculation results. This allows them to share their information, if they choose, with other organisations and advisers without either having to continually complete or provide the same information. Let us know what you think We hope AdviceConnect is able to help many Londoners to identify the support and benefits information they need to maximise their incomes during this challenging cost of living crisis. Take a look at the new functionality and please let us know your thoughts. https://www.entitledto.co.uk/blog/2023/february/supporting-londoners-to-access-advice-and-guidance https://www.entitledto.co.uk/blog/2023/february/supporting-londoners-to-access-advice-and-guidance Fri, 10 February 2023 09:25:55 Could settling disputes through back-pay put benefits at risk? Phil Agulnik https://www.entitledto.co.uk/blog/2023/january/could-settling-disputes-through-back-pay-put-benefits-at-risk Using one-off payments to settle industrial disputes appears to be a growing trend. In the Autumn it was part of the settlement for the local government pay dispute, with full-time council workers receiving a one-off payment of £1,284 (gross) at the end of November. More recently a one-off payment has been floated as a potential way of settling the government’s current dispute with nurses. Most nurses probably won’t care about the way the dispute is settled, only how much they will receive at the end of the day. In economic terms, they are said to be indifferent to receiving higher pay each month or a one-off payment. Similarly, if you look only at the effect of the tax system it makes no difference when a payment is made, as it’s an annual system. However, for people receiving Universal Credit (UC) there can be a difference, because of the way the system captures workers’ earnings. For a few UC recipients, getting a one-off payment instead of higher monthly pay could make a really big difference to the value of their award. How could a lump sum payment cause problems for UC claimants? The issue arises because UC works on a monthly snapshot of income rather than any form of averaging (as occurs naturally in annual systems, like taxation). When income is going down that’s great, because the system responds by increasing UC the following month, and if there’s a permanent increase in earnings it’s reasonable that support should reduce. However, if there is a one-off payment there is no way for a claimant to tell the DWP that it’s a temporary increase in earnings. In the UC computer system it just looks like you’ve been very well paid. What then happens is the additional pay (including any backdated award) is taken into account in the amount of UC someone receives in the following monthly period. In most cases the result is that UC is reduced by 55p for every extra £1 someone earns after income tax, national insurance and pension contributions. This is unless they are disabled or have children and earn less than the relevant work allowance for their circumstances. The real problem is if a one-off back payment means someone’s UC falls to zero. As highlighted in my recent  Are the Cost of Living payments unfair because they create a ‘cliff edge’?  blog, there is a growing phenomenon of UC receipt being used as a ‘passport’ to other benefit entitlements. This inevitably creates a ‘cliff edge’ at the level of earnings where a household’s entitlement to UC falls to zero. How can backdated pay affect entitlement to the cost of living payment? As explored in the blog above, the cliff edge problem includes the £900 cost of living payment that people on UC (and other means-tested benefits) will receive in 2023/24. At the moment, the government hasn’t announced the exact dates the three cost of living payments will be made: we only know they will be in Spring 2023, Autumn 2023 and Spring 2024. As we saw yesterday, when the Work and Pensions Secretary Mel Stride responded to a letter from the Work and Pensions Committee (pdf) , backdated pay isn’t the only example of this issue. The committee had expressed concern at people losing out on the cost of living payment if they received a nil award of UC in the qualifying period due to fluctuating earnings or sanctions and it had asked the Secretary to consider this position for the 2023/24 payments. Yesterday he rejected a call for a change and said “Unfortunately, it is not feasible to distinguish between a change to levels of earnings (e.g. seasonal earnings or a new job) and those with temporary fluctuations due to non-monthly earnings.” Back to the nurses. Should the government and the RCN fail to make an agreement within the current financial year, or Easter at the latest, there is a real danger some nurses on UC will miss out on the next cost of living payment. This will happen if their UC is reduced to £0 when they receive their back-pay and it coincides with the qualifying date for the next payment. This is a high-profile example but other employees in other sectors may be impacted in the same way. There are ways workers can get round the problem, of course. For instance, if the back-payment were paid into a pension then net pay would remain the same and the amount of UC awarded would not change. But this seems a long-winded way to ensure that workers on UC do not miss out on their cost of living payment. It’s unfortunate they may end up losing it due to the very act of negotiating a pay increase to help with the increasing cost of living. https://www.entitledto.co.uk/blog/2023/january/could-settling-disputes-through-back-pay-put-benefits-at-risk https://www.entitledto.co.uk/blog/2023/january/could-settling-disputes-through-back-pay-put-benefits-at-risk Fri, 20 January 2023 17:09:41 Are the Cost of Living payments unfair because they create a ‘cliff edge’? Phil Agulnik https://www.entitledto.co.uk/blog/2022/november/are-the-cost-of-living-payments-unfair-because-they-create-a-cliff-edge The new Cost of Living payments announced in the Autumn Statement are very welcome, providing an extra £900 next year for people on means-tested benefits. But the way the payments have been structured is far from perfect, as I explain below. The alternative of further increasing benefit rates, or reducing some of the hidden benefit cuts (like the freeze to the Local Housing Allowance), that the Autumn Statement didn’t tackle, would have been a fairer and more efficient approach. The continuation of Cost of Living payments for a second year mirrors the lifecycle of the income support schemes invented during the Covid pandemic. Clearly, once a template for support has been set the government are reluctant to make changes to the rules for how they operate (as opposed to changes in the level of support, which has varied in line with need). Nevertheless, the unintended consequences of making such ad-hoc additions to the tax or benefit systems are important to consider. Just as the design of the Covid support schemes was rightly criticised for creating perverse incentive for employers to lay-off staff, the Cost of Living payments create a ‘cliff edge’ issue that is both unfair and inefficient [1] . By opting for a facsimile of the first payment the government has missed the chance to rectify this aspect of the scheme. The cliff edge issue is that, in order to qualify for a Cost of Living payment you need to be in receipt of certain means-tested benefits [2] . But receiving these benefits can mean getting hundreds of pounds a month or just a few pence – even the smallest entitlement qualifies for the full £900 payment. This create the most obvious source of unfairness: people with earnings just above the level where they would qualify miss out on the full £900 rather than support being withdrawn gradually. In fact, there is a more severe unfairness that can affect benefit claimants who are paid weekly. Because of the way Universal Credit’s assessment periods work, the amount of earnings taken into account varies from one month to the next depending on how many pay days fall in that month. So even if someone gets the same amount of earnings every week their Universal Credit will be reduced in ‘5 week’ months. For some the difference is enough to mean they get a ‘nil award’ in those months. If by chance their ‘5 week’ month coincides with the assessment date for the Cost of Living payment then they will miss out. As well as being unfair, the cliff edge problem could also have unintended consequences for the labour market. While numbers affected may be small, there will be some people for who earning £1 more a week could make the difference between qualifying and not qualifying for Universal Credit. Rather than working harder and earning more to help meet increased bills, an individual faced with this choice could not be blamed for opting to maintain their entitlement to Universal Credit and the £900 payment. A different kind of problem might affect people entering the labour market. Rather than starting a new job straight away they might delay until after they have qualified for their Cost of Living payment. Again, for the individual, it could be their best financial option. In practice the effect is likely to be small, as few people can negotiate their start date. The bigger effect could be the unfairness felt by people starting work who miss out on the payment. It's for reasons like these that economists favour increasing benefit rates as a way to provide extra support, rather than one-off ‘passported’ payments. Adding £150 a month to Universal Credit (and other benefits) for 6 months would be just as effective and would avoid the cliff edge issue. However, given the furore that followed withdrawal of the £20 weekly Covid increase in November 2021 it’s perhaps understandable the government are wary of this mechanism. There is also an unusual positive ‘unexpected consequence’ of the current system. When the Cost of Living payments were first announced in May, our blog predicted there would be a positive effect on take-up . And this has now been confirmed by the Treasury’s ‘Policy Costings’ document for the Budget [3] . In its analysis of the £900 Cost of Living payments (and the £300 disability payment) the document comments that their "costing also accounts for behavioural impacts of this policy change, whereby there is some increase in take up of Universal Credit as a result of the policy change”. We’re pleased the Treasury have recognised this effect, and they will hopefully launch a benefits take-up campaign to accompany the second round of Cost of Living payments. If so, they should also consider a small administrative change. At the moment DWP do not announce in advance the qualifying day for getting a Cost of Living payment, at least for working age people. Instead, they only announce the qualifying day that was used after the event. If they moved to pre-announcing the date then the ‘call to action’ for people checking benefits would be a good deal stronger. We think pre-announcing the qualification date is a small administrative change with potentially large advantages for take-up. That’s why, all through the summer, we’ve been asking DWP to tell us their dates in advance, unsuccessfully alas. The fact they haven’t made this change yet suggests they’re unlikely to next year, perhaps because of concerns about the effect of the cliff edge on labour market decisions. Even so, if the government are determined not to pursue the simpler and fairer alternative of temporarily increasing benefit rates, then they should make the most of the current scheme. Letting everyone know qualification dates in advance would be a good way of doing that and would help the take-up campaign that should accompany it. -- [1] We discussed the cause of the cliff edge in more detail in our blog on the introduction of the Scottish Child Payment [2] Note that households who only qualify for Housing Benefit do not qualify for an automatic £900 Cost of Living payment but instead have to apply to the discretionary Household Support Fund. This reduces the cost of the scheme, and probably the administrative burden on local authorities, but is a further source of unfairness. In terms of their income and needs there is no difference between this group and the other groups who qualify automatically. [3] Available at https://www.gov.uk/government/publications/autumn-statement-2022-documents https://www.entitledto.co.uk/blog/2022/november/are-the-cost-of-living-payments-unfair-because-they-create-a-cliff-edge https://www.entitledto.co.uk/blog/2022/november/are-the-cost-of-living-payments-unfair-because-they-create-a-cliff-edge Fri, 18 November 2022 17:22:11 Autumn Statement update November 2022 Wendy Alcock https://www.entitledto.co.uk/blog/2022/november/autumn-statement-update-november-2022 The Autumn Statement yesterday provided some surety on how households on benefits will be supported through the cost-of-living crisis over the next year, with updates on benefits uprating, tax thresholds and extra assistance for help with increased bills. In this blog we explain each of the relevant announcements, so you don’t need to dig around in the policy documents. The link to the policy papers is at the end of the blog if you do though. All changes will be effective from April 2023, unless stated otherwise. Benefits uprating After months of speculation on whether rates would increase with inflation or earnings we were pleased to hear that the majority of benefits will be uprated by September’s CPI figure of 10.1%. This includes the main benefits such as the state pension, the Pension Credit minimum guarantee, Universal Credit, Child Benefit and the majority of tax credits elements (excluding the childcare element, the family element and withdrawal rates and disregards). It also includes other working age benefits, disability benefits, guardian's allowance and some tax allowances such as the Married Couple’s Allowance and Blind Person’s Allowance. This includes the benefits cap One extra, and positive, change is that the benefit cap will also be increased by the same 10.1%. The benefit cap sets a limit on the total amount of income households can receive from certain benefits. However, it’s not been changed since 2016, meaning more and more households fall under its reach despite the living costs increasing every year. The new annual cap for couples or people with children will be £25,323 (currently £23,000) for families inside London and £22,020 (currently £20,000) for families outside London. For single people the cap will be £16,967 (currently £15,410) for those inside London and £14,753 (currently £13,400) for those outside London. We will be adding all of the new rates to the calculator later this year so that you can see what it will mean for your entitlements for 2023/24. Cost of living support packages As our Director, Phil Agulnik, says in his Are the Cost of Living payments unfair because they create a ‘cliff edge’?  blog, the new payments mirror the approach taken when energy costs first increased . However, he goes on to say why he thinks the way they’ve been structured makes them far from perfect, as well as giving his views on a fairer and more efficient approach. Back to the detail of the payments. Like the existing scheme, there are payments for the following groups: People on means-tested benefits - 8 million households will receive £900 which will be paid in more than one instalment. Pensioner households - 8 million pensioner households will receive £300. People on non-means-tested disability benefits - 6 million people will receive £150. We have no more details on when the payments will be made. We will update our Cost of Living support  help page when the details are released. Other help that may be available If you’re not in one of the above groups, but are struggling to cover increased costs, contact your local authority as the Household Support Fund will collectively provide them with £1 billion to help households with the cost of essentials. On top of the Cost of Living payments, the Energy Price Guarantee will continue to put a limit on the price households pay for each unit of gas and electricity until March 2024. It currently subsidises a typical household’s energy bill to £2,500 a year but, between April 2023 and March 2024, this will become £3,000.  IMPORTANT This does not mean the amount you can be charged each month is limited. Your exact bill will still be based on how much energy you use. The equivalent support will continue to be provided in Northern Ireland and the government has said they will review the policy for all regions of the UK if needed. The Chancellor also announced that households using other fuel, such as heating oil, liquefied petroleum gas (LPG), coal or biomass will receive a £200 payment this winter instead of £100. All households in Northern Ireland will receive this £200 due to the number of houses using alternative fuel to heat their homes. Tax, NI and the living wage­­ Most Income tax and National Insurance thresholds have been frozen until 2028. It had already been announced many would be frozen until 2026. This means, for example, that employees will not pay income tax or national insurance on earnings up to £12,570 and the 20% basic rate of income tax (plus 12% Class 1 employee national insurance rate) will be applied to earnings up to £50,270 until 2028. The few changes include the threshold at which higher earners start to pay the 45% rate of tax being reduced from £150,000 to £125,140 and Class 2 and 3 national insurance rates will be increased by 10.1%. National Living Wage to increase An increase was also announced to the National Living Wage, which will become: £10.42 an hour for workers aged 23 and over (9.7% increase) £10.18 an hour for 21-22 year olds (10.9% increase) £7.49 an hour for 18-20 year olds (9.7% increase) £5.28 an hour for 16-17 year olds and apprentices (9.7% increase) Migration to new benefits As new benefits are introduced, people on the older systems are usually required to move to the new system, mainly to simplify the administration of the older schemes. Universal Credit may not feel new because it’s been around for nearly 10 years, but there are still around 2.5 million people claiming one of the older ‘legacy’ benefits that Universal Credit replaced. The DWP’s latest plan, following a number of previous ones,  was that all the 2.5 million people would be migrated to Universal Credit before the end of 2024. However, yesterday it announced a delay for most of the 1 million people who are claiming income-related Employment and Support Allowance (irESA) until April 2028. The delay applies to people who are claiming only irESA or both irESA and Housing Benefit. If they are also claiming Child Tax Credit they will be asked to move to Universal Credit at some point before the end of 2024. The DWP says it will save the country money In an online meeting following the Autumn Statement, Neil Couling, the Senior Responsible Owner for the implementation of Universal Credit, told attendees (including entitledto) this decision was based on saving money for the department. He said that claimants on irESA are more likely to benefit from being on Universal Credit and so moving them more slowly would save the country money in the long run. Mr Couling was also keen to point out that irESA claimants are still able to make a claim for Universal Credit if they believe they will be better off claiming it. Using the benefits calcautor  will help you work out if you might be better or worse off claiming Universal Credit but it’s important to seek advice if you’re not sure, because there is no going back once a claim for Universal Credit has been made . Mr Couling was also keen to point out the delay will not affect the managed migration of other legacy benefits onto Universal Credit but, with several other delays in the last few years, we wouldn’t be surprised if this didn’t pan out as he plans. Another delay was announced, which affects pensioners claiming Housing Benefit. The government plan to create a new housing element of Pension Credit but this will now not take place until 2028. Until this time eligible pensioners will continue to receive Housing Benefit.  Help for renters and homeowners Announcements here were different based on whether you: Are a social renter – if you rent from your local authority or housing association your rent can only go up by a maximum of 7% from April next year. Your benefits will cover any increase (unless you are affected by the benefits cap). You rent in the private sector – the help you receive via benefits (Universal Credit or Housing Benefit) to cover your rent is set by the Local Housing Allowance for your local area. This figure will be frozen in April so may not cover any increases in your rent. You may be able to apply for a (Discretionary Housing Payment} from your local authority to cover any shortfall. You own your own home – you can apply for a loan via the Support for Mortgage Interest (SMI) scheme if you are claiming Universal Credit. This currently doesn’t provide support for the first 9 months of your claim, but it will be reduced to 3 months. You will also be able to claim SMI if you work, which you can’t currently do. On top of the above, you may find your council tax bill increases as Local Authorities will be allowed to increase rates by 3% based on the needs, resources and priorities of their area, with an extra 2% if they have social care responsibilities. Increasing income/earnings if on Universal Credit (Sep 2023) To encourage low earners on Universal Credit to increase the hours they work (or their earnings), starting with a phased rollout from September 2023 low earners will need to meet their work coach on a quarterly basis. This is called the In-Work Progression Offer and will mainly affect households whose income is typically between the equivalent of 15 and 35 hours a week at the national living wage (£365/week for someone aged 23 and over). This is in addition to the government’s recent announcement to raise the Administrative Earnings Threshold from January 2023, from the equivalent of 12 hours to 15 hours at the National Living Wage, which will bring more claimants in-work and on low earnings into a more intensive regime of work coach support. -- Source: https://www.gov.uk/government/publications/autumn-statement-2022-documents https://www.entitledto.co.uk/blog/2022/november/autumn-statement-update-november-2022 https://www.entitledto.co.uk/blog/2022/november/autumn-statement-update-november-2022 Fri, 18 November 2022 16:18:24 Cost of living payments could give a boost to benefit take-up Phil Agulnik, Karen Holmes https://www.entitledto.co.uk/blog/2022/may/cost-of-living-payments-could-give-a-boost-to-benefit-take-up The cost of living payments announced by the Chancellor today are welcome. For people who are not already claiming benefits there is a simple message: Check whether you qualify, as even the smallest benefit claim is now worth making. And for people who are already claiming benefits there is reassurance: You don’t need to make a claim for these support payments, or change benefits, as you will automatically receive your cost of living support. In this blog we’re taking a quick look at how the payments work for people not already claiming benefits, as well as how they have the best chance of qualifying.  The information is based on the statement released today by the government . If you’re an existing benefits claimant our Cost of living support help page gives more information on what you might receive and when. And remember you don’t need to switch to Universal Credit to benefit from the extra payment. It goes to all existing claimants, including people on old-style ‘legacy’ benefits and tax credits.  Not claiming benefits: Use our calculator to check if you qualify The simple message is that, anyone who qualifies for means-tested benefits is entitled to an extra cost of living payment. That’s anyone, including people who are only entitled to a few pence of benefit. So, if you’re not already getting a means-tested benefit then it’s really worth checking whether you can. Our benefits calculator can help you check easily. If you’re working-age the main benefit you could claim is Universal Credit, which is paid on a sliding-scale as your earnings go up. If you are pension-age then Pension Credit is the gateway to getting the means-tested cost of living payment. In addition to your cost of living payment you’ll also get a regular benefit payment. The key point is that it doesn’t matter how small or large your benefit payment is – just receiving it gets you the extra cost of living payment in a lump sum. Working age and applying for Universal Credit? If you find out now that you’re entitled to Universal Credit you will get a payment of £324. You won’t get the full £650 payment announced by the Chancellor, as to get the first instalment you had to be claiming benefits (or have started a new claim) by 25 May 2022. But, if you claim between now and a yet-to-be-announced date, you should get the second payment. This payment should be made in the Autumn. Pension age and applying for Pension Credit? If you find out now that you were entitled to Pension Credit on 25 May 2022, and you start your claim before 18 August 2022 , you should get the full £650 payment. This is because you are able to backdate your claim for three months. If you become eligible after 25 May 2022 (for example, due to your age) or start your claim after 18 August 2022 (but before the yet-to-be-announced second qualifying date) you will get a payment of £324. Give yourself the best chance of qualifying Our benefits calculator provides the easiest way to check if you qualify for means-tested benefits and so can get an extra payment. But we sometimes find that people miss out pieces of information that make it more likely they could claim. Don’t forget to enter your: Childcare costs.  The Universal Credit childcare element can cover up to 85% of your childcare costs. Entering the childcare costs you pay when your children need the most care will help show whether you qualify for Universal Credit in the months you need help most. Pension contributions.  Your net earnings are used to calculate how much Universal Credit you are entitled to. This is your earnings after any tax and national insurance are taken off, but also the full amount of any pension contributions you make are ignored. The more you contribute to your pension the more likely you are to qualify, so please check you enter the full amount you pay into your pension. Business expenses (self-employed).  Universal Credit (UC) calculations consider income received in an ‘assessment   period’ - which is measured as a calendar month from the date you claim UC, then a new period begins on the same date in each following month. The calculation also deducts from self-employed income any allowable business expenses paid out over the same period, so don’t forget to enter these as they reduce your income for UC. More information is available from HMRC’s website. Best take-up campaign ever The cost of living payments could herald a major step forward in terms of improving benefit take-up rates. It may not have been their intention, but the prospect of a 'golden hello', in the form of a cost of living payment, could be just the spur some people need to check their benefits. Like all good marketing campaigns, there is a window of opportunity for people to qualify. In order for the system to work, at some point there will have to be a cut-off date for the second instalment of the £650 cost of living payment. Just as you had to be eligible for a means-tested benefit on 25 May to qualify for the first instalment, the government will set a cut-off date for the second payment. But why wait? We think it’s a message the public will respond to: It doesn’t take long to check your benefits – 10 minutes on average. If you qualify you could also get an extra £324 cost of living payment, tax-free. But don’t delay, the offer won’t be available for ever! If this is you, or someone you know, please use the calculator now to check what you may be entitled to claim. https://www.entitledto.co.uk/blog/2022/may/cost-of-living-payments-could-give-a-boost-to-benefit-take-up https://www.entitledto.co.uk/blog/2022/may/cost-of-living-payments-could-give-a-boost-to-benefit-take-up Thu, 26 May 2022 19:38:33 Council Tax Reduction schemes in England 2022/23 Phil Agulnik, Karen Holmes https://www.entitledto.co.uk/blog/2022/may/council-tax-reduction-schemes-in-england-202223 We were pleased to present the findings from our latest Council Tax Reduction (CTR) survey at the Institute of Revenues, Ratings and Valuation’s (IRRV) Spring Conference and Exhibition today. We worked in conjunction with the New Policy Institute to collect the data about CTR schemes being used by councils across the UK and one of our benefits experts, Karen Holmes, carried out the analysis in the lead up to the IRRV conference. Each local authority’s website was reviewed to find out if there was a change to their CTR scheme between 2021/22 and 2022/23, so that users of our benefits calculators can get accurate and up-to-date information about their entitlement to this benefit. If so, the details of the scheme are updated in our rolling dataset. Some of the main trends we found were as follows: 11% of local authorities in England changed how they calculate Council Tax Reduction for 2022/23 (35 local authorities) The most common change was to reduce minimum payments for the poorest households (16 local authorities). Only two local authorities increased their minimum payment this year The second most common change was to introduce an income-banded scheme (12 local authorities). Around a quarter of Council Tax Reduction schemes are now income banded. Simplifications included abolishing non dependant deductions or setting a flat rate (9 local authorities) and removing tariff income on capital (6 local authorities). Please contact us if you would like to receive a copy of the full analysis or a further report detailing the now 84 income-banded schemes in place across the country. Further ways we can help you If you work for a local authority that’s thinking of changing its CTR scheme we may be able to assist you. Please get in touch! Use our  contact us form  to let us know how we may be able to help. https://www.entitledto.co.uk/blog/2022/may/council-tax-reduction-schemes-in-england-202223 https://www.entitledto.co.uk/blog/2022/may/council-tax-reduction-schemes-in-england-202223 Wed, 18 May 2022 18:12:14 Increasing the National Insurance threshold does little to help benefit claimants Phil Agulnik https://www.entitledto.co.uk/blog/2022/march/increasing-the-national-insurance-threshold-does-little-to-help-benefit-claimants It’s no understatement to say, the Chancellor’s Spring Statement has done little to help low-income families on benefits in the face of an oncoming cost-of-living crisis. As many commentators have discussed, there was no direct help from the Treasury with meeting higher fuel bills over the coming months. The only relevant measure was an extra £500m for the ‘Household Support Fund’, a discretionary scheme run by local authorities to provide emergency support. Given the scale of the problem this hardly seems up to the task. Instead of help for everyone to meet higher energy bills, or targeted help such as the £150 rebate on Council Tax bills for anyone in Band D or lower, the Chancellor focussed on providing help for workers through raising the threshold for paying National Insurance Contributions (NICs). He announced he would increase the NICs threshold by £3,000, instead of £300 as previously proposed, saving all but the lowest earners £330. Many people on benefits won't see the same gain One criticism of the Chancellor’s strategy is that it only provides help to workers, whereas everyone, unemployed and employed alike, faces the prospect of higher inflation. For most benefit claimants the Chancellor’s NICs announcement has zero impact, as they do not earn enough to pay NICs anyway. But even accepting his focus on workers, for 2.3 million working benefit claimants the extra help provided by the increase in the NIC threshold is much less generous than it seems on the surface [1] . The reason workers on benefits will get less help is because increases in an individual’s earned income result in their benefits being reduced, irrespective of whether this is due to a pay rise, extra hours or (as here) a tax cut. In Universal Credit (UC) the calculation is based on a taper that reduces the amount paid by 55p for every extra pound earned (once a work allowance has been used up). So, for UC claimants earning just above the new NICs threshold of £12,570, the increase in their net earnings of £330 (because of the increased NICs threshold) will be offset by a reduction in their UC of a little over £180. This means the net increase in the income of a worker on UC will be £150 a year, considerably more than the zero increase experienced by non-working benefit claimants but much less than the £330 increase other workers will enjoy [2] . In fact, for some benefit claimants the increase in their net income will be even less. People with low earnings or high Council Tax bills also receive help through an extra part of the benefit system, the local-authority administered benefit Council Tax Reduction (CTR). Like UC this help is means-tested, with assistance being tapered away as net income goes up. The standard rate for this taper is 20%, so for workers who get help through CTR and UC the combined taper is 64% once the interaction between the two is included. For claimants getting both benefits the net increase in income because of the increased NICs threshold is not £330 but £120, once all benefit changes have been included. Could there be new opportunities in the longer term?  In the short term at least, it seems the Chancellor has done little to help benefit claimants. However, in the longer term the increase in the NICs threshold may open up new opportunities for benefit reform. In particular, by aligning the NICs threshold with the personal allowance for income tax there is now a clearer route to tax-benefit integration. In his speech the Chancellor quoted the Centre for Policy Studies, who described the policy of increasing and aligning tax and NICs thresholds as a “universal working income”. This reflects the fact that (almost) all workers will now get a tax-and-NICs-free allowance of £1,050 a month. However, while the language nods to a universal basic income, the policy is better seen as making the tax system simpler and fairer. It makes tax simpler as, from July, when the new policy is introduced, it means only one calculation is needed to convert gross to net earnings. From then all employees will pay tax and NICs at a combined rate of 33.25% on earnings over £12,570, so workers will lose about a third of their earnings over £1,050 a month. At the moment, separate calculations are needed for tax and NICs as they have different thresholds. And the policy is fairer because the workers who benefit most from the change are those earning just above £12,570. By way of contrast, cutting the basic rate, as the Chancellor proposes to do from April 2024, provides most help to people earning at the top of the basic tax band on over £50,000 a year.  The policy of increasing the NICs threshold could also pave the way to a simpler and fairer benefits system, at least for workers. The effect of setting both thresholds at £12,570 is that, in weekly terms, the value of the tax/NICs allowance will be £80.40 a week from July, above the level of personal benefits like Jobseekers Allowance (which is worth £77 a week from April). If these allowances were made available as a weekly or monthly payment, with all earnings then taxed in full, then it would in effect create a basic income for all workers [3] . Perhaps this is what the Chancellor had in mind by a “universal working income”? -- [1] This figure is only for working people claiming Universal Credit and is taken from https://www.gov.uk/government/statistics/universal-credit-statistics-29-april-2013-to-13-january-2022/ . There are also about 1 million people claiming Working Tax Credit, the help for low-income workers introduced by Labour in 2003 (see https://www.gov.uk/government/statistics/personal-tax-credits-provisional-statistics-for-december-2021 ). Perhaps ironically, the benefit clawback described in this blog does not affect Working Tax Credit recipients, who will get the full £330 benefit of the increase to the NIC threshold. That’s because tax credits are based on gross earnings, before tax and NICs, so are not affected by changes in thresholds or rates. [2]  The analysis here does not include the effect of the 1.25% increase in NICs that comes into effect this April. As earnings rise above £12,570 the effect of the rate rise will cancel out the increase in the threshold, with anyone earning more than £35,000 paying more tax and NI overall. Benefits are calculated on the basis of net earnings, so the benefit clawback reduces as the net gain goes down. [3]  For example,  https://leftfootforward.org/2018/09/the-practical-response-to-our-societys-widening-inequality-a-partial-basic-income/?doing_wp_cron=1648134022.3166460990905761718750 https://www.entitledto.co.uk/blog/2022/march/increasing-the-national-insurance-threshold-does-little-to-help-benefit-claimants https://www.entitledto.co.uk/blog/2022/march/increasing-the-national-insurance-threshold-does-little-to-help-benefit-claimants Fri, 25 March 2022 11:43:45 Our annual review suggests about £15 billion of benefits remain unclaimed each year Phil Agulnik https://www.entitledto.co.uk/blog/2022/february/our-annual-review-suggests-about-15-billion-of-benefits-remain-unclaimed-each-year Every year entitledto delves into the world of benefit take-up rates, to see if any progress is being made in the amount of income-related benefits being left unclaimed by those entitled to them. As we reported in our recent Don’t take away our take-up stats blog, the DWP announced a few weeks ago that this set of take-up data (for the 2019/20 benefits year) would report only on  rates for pension age income-related benefits. The data was released yesterday . The challenge: How to add Universal Credit data to our analysis This year, with the advance knowledge of a reduced data set and in the absence of official statistics, we put our minds to ways we could try and create our own estimate for lost income from people not claiming Universal Credit (UC). With the gap in UC take-up data becoming ever longer, we felt an increasing percentage of people, and pounds, were potentially being left out of the story that should be included in our analysis. The problem is illustrated by last year’s statistics , where we reported a reduction in the amount of income lost through incomplete take-up (we estimated around £1 billion less in unclaimed benefits from the year before ). However, we believe this reduction is largely a statistical anomaly created by the migration of households onto UC. The take-up estimates for 'legacy' benefits we reported last year all showed a marked improvement; for instance the amount of income lost in unclaimed Income Support / Employment Support Allowance fell in two years from £2 billion to £1 billion [i] . In return there should have been a new estimate for unclaimed UC, but no estimate was published and we did not make any adjustment ourselves. Our aim was to correct this problem this year but when we sat down to try and map the available data we weren’t able to come up with one clear way of outlining our assumptions. We have therefore taken the decision to provide two methodologies in this year’s report. Option 1 – Include data about legacy benefits take-up but not Universal Credit This is the option we have used in our previous annual take-up reports, and our main estimate this year. Using only published data provides more clarity about the provenance of our estimates but, as we have been saying for years, the lack of relevant up-to-date statistics makes it feel out of date. This will hopefully be the last year we need to include this option, as we assume that statistics on UC take-up will be published next year. It’s important to note: Older legacy benefits are shaded in green in the table below. New claims for these benefits are only possible in very exceptional circumstances and most people need to claim Universal Credit instead. Blue shaded benefits are still open for new claims. Notes: All figures, where available, are based on central estimate figures for entitled non-recipients (people who are eligible to claim but for some reason don’t). (a) Using the mid-point of the total amount of Council Tax Benefit unclaimed in 2009/10 (between £1.7 billion and £2.42 billion [ii] ) this figure has been inflated to 2020 prices using the Bank of England Inflation Calculator. (b) DWP stated “At this point in the UC rollout schedule, there is no practical way to distinguish between JSA and UC at entitlement level for the purposes of estimating take-up statistics. Therefore, the JSA data are not of a suitable quality to be published." [iii] The figures have not been inflated as benefits rates have mostly been frozen since this date. (c) HMRC stated “Due to the introduction of Universal Credit, this is the final year for which tax credit take-up statistics will be released.” [iv] The figures have not been inflated as benefits rates have mostly been frozen since this date. (d) DWP stated it would “remove reporting on working age take-up from the next publication and focus only on pensioner age take-up. [v] ” We have not inflated these figures as benefits rates have mostly been frozen since this date. (e) This data set is still being updated but the most recent data is from 2018/19. 2019/20 data will be released in March 2022. [vi] The figures have not been inflated as benefits rates have been frozen since this date. (f) Not unique families, as some may be entitled to more than one benefit. Option 2 – Include our own interpretation for Universal Credit take-up and remove the older (published) data about legacy benefits To estimate the amount of unclaimed UC we have assumed that take-up rates for the new benefit are the same as the average for the six legacy benefits it replaces, with about 25% of eligible households failing to claim their entitlement. Based on the most up-to-date number of households claiming UC and the average (mean) amount of UC paid to households (January 2022, when 4.8 million households were on UC and the average payment was £780) we estimate this equates to almost £7.5 billion unclaimed. We think this estimate broadly equates to the reduction in take-up estimates that is an unintended by-product of migration from legacy benefits to UC. We accept, of course, that it involves some speculation and if the DWP provided their own statistics on UC take-up we would of course use these instead. All benefits are shaded blue in the table below and therefore open for new claims. Notes: All figures, where available, are based on central estimate figures for entitled non-recipients (people who are eligible to claim but for some reason don’t). (a) Using the mid-point of the total amount of Council Tax Benefit unclaimed in 2009/10 (between £1.7 billion and £2.42 billion [vii] ) this figure has been inflated to 2020 prices using the Bank of England Inflation Calculator. (b) This data set is still being updated but the most recent data is from 2018/19. 2019/20 data will be released in March 2022. [viii] The figures have not been inflated as benefits rates have been frozen since this date. (c) Not unique families, as some may be entitled to more than one benefit. Why we need up-to-date take-up data The DWP’s failure to provide statistics on working-age benefit take-up this year must not become permanent. The act of publishing data makes the problem of low benefit take-up visible, and conversely failing to publish can too often lead to a failure to acknowledge the problem. Moreover, we can’t learn lessons about social security design without knowing what’s happening to take-up rates. The recent history of Council Tax Benefit (CTB) illustrates these problems. Because CTB was localised in 2013, and no longer connected to the DWP, it was the first of the take-up statistics to be axed. As far as we are aware no take-up statistics have ever been produced on any of the new local schemes. As expected, this means the issue of take-up is often not considered when local authorities’ review their schemes. Moreover, because we are unable to say whether take-up of the localised schemes is better or worse than under CTB, we can’t draw proper conclusions about the pros and cons of this benefit reform. Ironically, HMRC’s continued publication of Child Benefit take-up statistics shows how useful these estimates can be, helping to highlight the growing problem of reduced take-up of this benefit since the 'High Income Charge' was introduced in 2013. For individuals, it means there should be clear advice to claim Child Benefit and then repay it through the income tax system when the time comes: at worst people affected by the High Income Charge will receive an interest-free loan from the government, and they could be one of the half a million families missing out. For policy evaluation, the take-up statistics clearly illustrate the fact that selectivity (of any form) reduces benefit take-up. Help us encourage everyone to check if they are entitled, now! Until such time as the DWP decides to publish a full set of take-up statistics we will continue to provide our estimates to encourage people to check their entitlements. Our free tools are here to help people quickly work out what support they may be entitled to. Please do please share them with friends and family so they can check what help they may be able to claim. Sources: [i] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/222914/tkup_first_release_0910.pdf [ii]   https://www.gov.uk/government/statistics/child-benefit-statistics-annual-release-august-2020 [iii] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/222914/tkup_first_release_0910.pdf [iv] https://www.gov.uk/government/publications/income-related-benefits-estimates-of-take-up-financial-year-2018-to-2019/background-information-and-methodology-2018-to-2019 [v] https://www.gov.uk/government/statistics/child-benefit-child-tax-credit-ctc-and-working-tax-credit-wtc-take-up-rates-2017-to-2018 [vi]   https://www.gov.uk/guidance/income-related-benefits-estimates-of-take-up-fye-2020-statistical-notice [vii]   https://www.gov.uk/government/statistics/child-benefit-statistics-annual-release-august-2020 [viii] https://www.gov.uk/government/statistics/income-related-benefits-estimates-of-take-up-financial-year-2018-to-2019 https://www.entitledto.co.uk/blog/2022/february/our-annual-review-suggests-about-15-billion-of-benefits-remain-unclaimed-each-year https://www.entitledto.co.uk/blog/2022/february/our-annual-review-suggests-about-15-billion-of-benefits-remain-unclaimed-each-year Fri, 25 February 2022 17:13:43 Don’t take away our take-up stats Phil Agulnik https://www.entitledto.co.uk/blog/2022/february/don-t-take-away-our-take-up-stats Every year we report on the government’s latest updates to their benefit take-up statistics, combining, where available, data from DWP and HMRC. Last year we came up with a total estimate that  £15bn of benefits remain unclaimed . We were planning to update this number in three weeks’ time, as new DWP take-up statistics are due out on February 24. However, at the end of last week the department put out a  statistical notice  that effectively puts something of a spanner in our works. It’s not because more people are getting the benefits they are entitled to. Instead, it’s because DWP has given up on trying to estimate benefits take-up for working-age people. The statistical notice is to let the small band of organisations (like entitledto) that use the statistics know that, for the foreseeable future, it only intends to produce take-up estimates for pension-age benefits. We will of course report on available trends in benefits take-up when the new numbers are released, and knowing what is going on with the estimated £2.2 billion of unclaimed means-tested benefits for pensioners is certainly worthwhile. But trends for this group of benefit claimants, where take-up is estimated to have improved in recent years, does not tell us anything about trends among working-age claimants. That’s because big increases in the basic pension have made it less likely that pension-age households qualify for top-up benefits, as most of the work of supporting incomes is done by the basic pension. The opposite is true for working-age benefits, where means-tested benefits have become even more dominant in recent years Why can’t take-up estimates be produced for working-age benefits? The problem facing government statisticians is that the benefits system is moving from the old ‘legacy’ system to Universal Credit (UC). A  methodological note from 2020  set out a myriad of reasons why it was not possible to produce take-up estimates for UC, and these technical issues remain the reason why estimates for UC are not being calculated this year. The change from last year’s take-up statistics is that the problems stopping accurate estimates of UC take-up being produced also mean estimates for other working age benefits would now be unreliable. We would be very disappointed if the government decides to abandon estimating take-up statistics for UC, rather than this being a pause in their publication. One of the main reasons the government gave for introducing UC is that it would help increase benefit take-up. As such the inability to produce take-up statistics means the only part of the business case for introducing UC that can be estimated accurately has gone in the wrong direction – fraud is far worse under UC than it was under legacy benefits. If the government commits to bringing back take-up estimates we also hope it will fill the existing hole in the take-up statistics for Council Tax Support/Reduction. This was abandoned in 2013 when the benefit changed from a national Council Tax Benefit system to local Council Tax Reduction schemes, and we believe take-up rates have been dwindling ever since, but without proper monitoring we will never know for sure.  Including take-up of help for Council Tax makes a big difference: when the last estimates came out pension-age households failed to claim nearly £1.5 billion of help, about the same as the current estimate for unclaimed Pension Credit. Whatever is available we will be sure to report on it because we believe the stats provide inspiration to eligible recipients to start a claim, and ultimately we want to see everyone getting the help they are entitled to. https://www.entitledto.co.uk/blog/2022/february/don-t-take-away-our-take-up-stats https://www.entitledto.co.uk/blog/2022/february/don-t-take-away-our-take-up-stats Thu, 03 February 2022 19:33:53 Budget update October 2021 Wendy Alcock, Phil Agulnik https://www.entitledto.co.uk/blog/2021/october/budget-update-october-2021 The Chancellor said at the start of his budget speech in the House of Commons today that “we will always give people the support they need and the tools to build a better life for themselves.” In the world of welfare, the headline grabbing changes to Universal Credit's taper rate and work allowances go some small way towards this, but after digging though the full set of Autumn Budget and Spending Review documents there wasn’t much else we found to corroborate this. Here’s a summary of the benefits changes we found in the 100s of pages of supporting and related information. It’s split into new announcements and confirmation of changes we already knew about. New announcements Increasing the Universal Credit work allowances   By 1 December 2021 the Universal Credit work allowances (the amount someone can earn before their Universal Credit award begins to be reduced) are increasing by £500 a year, or £42 a month. These allowances are only available to households with children or a disability, so miss a large proportion of workers. The revised allowances will be: £335 per month (was £293), where UC includes help with rent. £557 per month (was £515), where UC doesn't include help with rent. Lowering the Universal Credit taper rate Also, by 1 December 2021, the Universal Credit taper rate is dropping from 63% to 55%. This means working households claiming Universal Credit will get to keep an additional 8p for every £1 of net income they earn over their work allowance, if one applies. Importantly this change doesn’t help workers on the old legacy benefit of Working Tax Credit, which at the last release of statistics earlier this year was still being received by over a million households. It also doesn’t help people claiming Universal Credit if they are looking for work or are not able to work, for example they are carers or are disabled. This is over 60% of UC claimants.   Here’s our Director Dr Phil Agulnik musing on these changes: The Chancellor’s announcement of help for working Universal Credit (UC) claimants is welcome. For many of them it will more than compensate for the ending of the £20 uplift, though very low earners will gain little and unemployed UC claimants nothing at all. But the announcement has a number of surprising effects. First and foremost it extends the reach of UC up the income scale. That’s because lowering the taper rate means it’s easier to qualify with higher earnings. Part of the £2 billion cost of this measure therefore comes about because more low and middle income households now qualify for UC. This also means, a small but growing number of people with children will now qualify even though they are higher rate tax payers. Families with high costs or needs, because of childcare, high rent or a large number of children, are now more likely to qualify with earnings over £50,000. The other really big implication of the Chancellor’s announcement is on people who are in work but still on so-called ‘legacy’ benefits (including Housing Benefit and tax credits). With the new taper rate (and work allowance) it becomes more likely that employees (but not the self-employed, due to the Minimum Income Floor) will now be better off on UC than on tax credits, particularly if they rent. There are some circumstances where this doesn't apply, but if someone's in work it’s worth checking to see if they would be better off on UC.   In practical terms these changes mean it’s more important than ever for people to check if they can claim UC. Our calculator will show people whether they qualify under the new rules announced by the Chancellor. And even if they don’t qualify now it’s worth checking again if their circumstances change, or in April when entitlement will extend further again.   Extension of the Universal Credit managed migration roll out The move of existing ‘legacy’ working age benefit claimants to Universal Credit was due to be completed by September 2024 but is now planned to be finished by March 2025 .  However, experience suggests this date could be put back again at some point. Date of Pension Credit to Housing Benefit merger While not totally new, as we’ve known for years this would be happening at some point, the government’s plans to create a new housing element of Pension Credit to replace pensioner Housing Benefit are now planned to take place from 2025. This is the first time they’ve specified a date, which is due to coincide with the end of the migration of existing working-age Housing Benefit claimants to Universal Credit. We also wouldn’t be surprised if it ends up happening later though, as the UC migration has taken many more years than first anticipated! Change to Shared Accommodation Rate exemptions Planned exemptions to allow victims of domestic abuse and victims of modern slavery to claim the higher 1-bedroom self-contained Local Housing Allowance rate will now come into force in October 2022 instead of October 2023. Extension of the Universal Credit surplus earnings threshold The current surplus earnings threshold for Universal Credit of £2,500 will stay in place until at least April 2023. It was due to reduce to £300 from April 2022. Confirmation of changes we already knew Increase to National Living Wage From 1 April 2022 the National Living Wage is increasing to £9.50 from £8.91 an hour for anyone age 23 or over. For other ages, the changes are as follows: for 21 to 22 year olds the increase is from £8.36 to £9.18 per hour for 18 to 20 year olds the increase is from £6.56 to £6.83 per hour for 16 to 17 year olds the increase is from £4.62 to £4.81 per hour< for apprentices the increase is from £4.30 to £4.81 per hour Waiting days for new style ESA claims During the pandemic anyone affected by Covid-19 who needed to claim new style Employment and Support Allowance received help from day one of their claim, as the usual eight waiting days were removed. This provision has been extended until 24 March 2022. Household Support Fund via local authorities The Household Support Fund was launched by the government in October 2021 and will be available until March 2022. It is intended to help vulnerable households who have been impacted by Covid-19 with essential costs such as food, energy bills, water bills and other essentials over the winter. Help with housing costs may also be available in cases of emergency. 50% of the money is due to be allocated to people with children. Minimum Income Floor reinstated The temporary suspension of the Minimum Income Floor (MIF ), put in place in March 2020  to provide additional support for self-employed people on low incomes during the Covid-19 pandemic, has gradually started being reintroduced since 1August 2021. --- We hope you found this a useful summary. If we find more detail on any of the announcements we’ll post them on our social media channels, so please do follow us on Twitter , Facebook and LinkedIn . Sources: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1028814/Budget_AB2021_Web_Accessible.pdf https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1028681/Policy_Costings_Document_FINAL.pdf https://www.gov.uk/government/statistics/child-and-working-tax-credits-statistics-provisional-awards-december-2020/child-and-working-tax-credits-statistics-provisional-awards-december-2020-main-commentary https://stat-xplore.dwp.gov.uk/webapi/openinfopage?tableId=Table+1+-+Conditionality https://www.entitledto.co.uk/blog/2021/october/budget-update-october-2021 https://www.entitledto.co.uk/blog/2021/october/budget-update-october-2021 Wed, 27 October 2021 18:27:44 England's Council Tax Reduction schemes 2021/22 Wendy Alcock https://www.entitledto.co.uk/blog/2021/june/englands-council-tax-reduction-schemes-202122 Every year we research and record the range of Council Tax Reduction/Support (CTR) schemes being used by councils across the UK, so that users of our benefits calculators can get accurate and up-to-date information about their entitlement to this benefit . For the last few years we’ve provided a webinar detailing our latest findings about the CTR landscape in England and we’ve also released a report of our research, with a focus on the increasing use of income-banded schemes. New report released today Today we are pleased to release this year’s report, which was created in conjunction with the New Policy Institute (NPI). The data used in the analysis was collected by NPI and entitledto in early 2021. Each local authority’s website was reviewed to find out if there was a change to their CTR scheme between 2020/21 and 2021/22. If so, the details of the scheme are updated in our rolling dataset. The research takes a step back from income-banded schemes to a nalyse the range of schemes now in place across the country and how things have changed since the old Council Tax Benefit was localised in April 2013. A further report detailing the now 72 income-banded schemes in place across the country is available on request.  Download the report Click the image below to access the report (or use this link ).  Watch the recording Or watch back our recent webinar below (use this link if on a mobile), recorded on 1 June 2021, which discussed the details of the research including what’s changed this year and what trends we can see emerging. Further ways we can help you If you work for a local authority that’s thinking of changing its CTR scheme we have several services that may be able to assist you. From monitoring the market to modelling your dat a we can help you work out what changes, if any, may be appropriate for both your authority and residents. Please get in touch! Use our contact us form to let us know how we may be able to help. This may also be of interest... Our Director, Dr Phil Agulnik, spoke to David Magor, Chief Executive of The Institute of Revenues Rating and Valuation as part of its  Summer Series of Professional Meetings on 11 June. Phil gave a summary of our CTR report's findings and spoke about how the last year's been for entitledto. https://www.entitledto.co.uk/blog/2021/june/englands-council-tax-reduction-schemes-202122 https://www.entitledto.co.uk/blog/2021/june/englands-council-tax-reduction-schemes-202122 Tue, 08 June 2021 10:00:00 Budget update March 2021 Wendy Alcock https://www.entitledto.co.uk/blog/2021/march/budget-update-march-2021 Yesterday's Budget gave some short-term help to benefit recipients but did little to address long-term issues with the system. Several measures to protect people from the financial impact of coronavirus were extended, and a few more were bought forward, but unless further changes are made we will be back to the pre-coronavirus system by the Autumn. Below I’ve highlighted the welfare changes announced by the Chancellor with details on how we’ve implemented (or plan to implement) them in our benefits calculators. Universal Credit This is the big issue we were all waiting to find out because it affects the 5 million low income households across the UK who already claim Universal Credit, as well as anyone who starts a new claim. But rather than go all in (by keeping the £20 weekly uplift indefinitely, or for another year at least) or out (reverting back to the pre-pandemic standard allowance) the Chancellor stuck himself in the middle by continuing the temporary increase for another six months. We welcome the decision  to extend the uplift for another six months, though making it permanent would have been preferable. The main problem with this decision is that the extra support still isn’t reaching people on legacy benefits. It means people who are still on legacy benefits face a difficult decision about whether to move to Universal Credit to get this extra £20 a week. Because of the way Universal Credit works it’s important that people check how they are affected individually, because the amounts provided in comparison with legacy benefits vary a lot. Some households will be financially better off claiming Universal Credit even without the £20 uplift while others will still be worse despite the extra £20 a week (for six months). To help guide people thinking about this we’ve added extra information to their Universal Credit calculation results so they can see how their award could be affected from October 2021 onwards. Image: Guidance for UC claimants about the end of the £20 a week uplift Additional announcements about Universal Credit We also saw a three month extension to the suspension of the Minimum In come Floor (MIF)  requirements for self-employed Universal Credit claimants. This will now be in place until the end of July 2021, rather than coming back into force at the end of April. From August the government has said the MIF will be gradually reintroduced and work coaches will be able to apply discretion to it being used in individual cases if they think someone’s self-employed earnings are still being affected by Covid-19 restrictions. The surplus earnings threshold for self-employed people is also being maintained at its current level of £2,500. This will now last until April 2022 when it is then planned to drop to £300. However, this has been the intention since Universal Credit first launched in 2013 and we’ve yet to see it implemented, so our guess at entitledto HQ is that this may be maintained a little while longer. Finally, the changes planned for debt deductions from UC and advance repayments of UC in October 2021, are being bought forward to April 2021. From this date the maximum rate at which deductions can be made from a Universal Credit award will reduce from 30% to 25% of the standard allowance and the period over which Universal Credit advances will be recovered will increase from 12 to 24 months. Working Tax Credit Due to the fact that tax credits are an annual entitlement, rather than a monthly entitlement like Universal Credit, it is not possible to implement an increase for 6 months only. Instead the extra £20 a week is being implemented as a one-off £500 payment for tax credit claimants. Anyone entitled to the uplift (because they are in work, or were before the pandemic) who was claiming tax credits on 2 March 2021 will automatically receive the £500 payment by the end of April 2021. As this is currently the only detail available on this policy the calculator informs those eligible about the payment via the message below. We decided not to include the £500 in the tax credit estimate because it can’t be simply split into a weekly or monthly amount.  We believe the payment will not count as income for other benefits, and so will not affect our other benefit estimates. If this situation changes and we receive more guidance we will update the calculator accordingly. Image: Guidance for tax credits claimants about the one-off £500 payment Additional announcements about Working Tax Credit (WTC) The government will continue to treat Working Tax Credit claimants who are working reduced hours due to coronavirus as working their normal hours until the Job Retention Scheme closes. This means they will not be asked to claim Universal Credit if their new hours are below those needed to still be eligible for WTC (16, 24 or 30 depending on their circumstances). Coronavirus Job Retention Scheme It was no surprise the furlough payment to support employed people affected by Covid-19 would continue past the previous deadline of 30 April 2021. It will now run until the end of September 2021, with the employee continuing to receive 80% of their salary up to a total of £2,500 a month for hours not worked, and the following contributions required by employers: Between 1 November 2020 and 30 June 2021 the government will pay 80% of someone's salary, with the employer expected to contribute the National Insurance and pension contributions. During July 2021 the government will pay 70% of someone's salary, with the employer expected to contribute the extra 10% as well as the National Insurance and pension contributions. During August and September 2021 the government will pay 60% of someone's salary, with the employer expected to contribute the extra 20% as well as the National Insurance and pension contributions. Self-Employment Income Support Scheme To match support for the employed, help for self-employed people affected by Covid-19 has also been extended until September 2021. Details of the fourth expected payment were revealed and a new fifth payment was announced, as follows: Stage four Covers the period from 1 February 2021 to the end of April 2021. During this time eligible people will be able to apply for a taxable grant based on 80% of their average monthly profits, capped at a maximum of £2,500 a month. Applications open in late April 2021 until 31 May 2021. Stage five Covers the period from 1 May 2021 to the end of September. The amount of the fifth grant will be determined by how much someone's turnover reduced in the year April 2020 to April 2021. If their turnover reduction was 30% or more they will receive 80% of three months’ average trading profits, capped at £7,500. If their turnover reduction was less than 30% they will receive 30% of three months’ average trading profits, capped at £2,850. Applications are expected to open from late July 2021. One bonus for stages four and five are that they include people who submitted a Self-Assessment tax return for the tax year 2019/20 (as long as they did so before 2 March 2021), which the government say is around 600,000 newly self-employed people. We are currently updating the calculator to give guidance on stages 4 and 5 and this will be published in the next few days.  Image: Working out the impact of a SIESS payment on UC award Test and Trace support payment After recent changes in Scotland and Wales we had hoped to see a widening of the eligibility criteria for workers on a low income who are asked to self-isolate if they are living in England, but the only announcement was that the £500 Test and Trace support payment would continue until the summer. As lockdown eases this may be one for a future announcement. If and when the rules change, where relevant we will display one of the following 'other entitlements' to eligible people as part of their calculation result. Image: Support payment signpost for each devolved nation Support for Mortgage Interest Where someone claiming Support for Mortgage Interest moves home, from 15 March 2021 they will be able to add the legal costs associated with transferring their claim to a new property to the value of their loan. Shared Accommodation Rate After being announced in last year’s budget that exemptions to the shared accommodation rate for Housing Benefit and housing costs in Universal Credit will be extended for various groups in October 2023, this will now be introduced in June 2021. The groups included are rough sleepers aged 16-24 (this currently covers 25-34 year olds), care leavers up to the age of 25 (currently this covers people aged under 22) and two new exemptions for victims of domestic abuse and human trafficking. --- We hope you found this a useful summary. If we find more detail on any of the announcements we’ll post them on our social media channels, so please do follow us on Twitter , Facebook and LinkedIn . Sources: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/965777/Budget_2021_policy_costings_.pdf https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/966161/Budget_2021_Web_accessible.pdf https://www.entitledto.co.uk/blog/2021/march/budget-update-march-2021 https://www.entitledto.co.uk/blog/2021/march/budget-update-march-2021 Thu, 04 March 2021 14:42:46 Cash is king for helping families self-isolate Phil Agulnik https://www.entitledto.co.uk/blog/2021/january/cash-is-king-for-helping-families-self-isolate Financial support for low income households is increasingly being recognised as a weak link in the government’s attempts to reduce the spread of coronavirus. One issue is the narrowness of support provided by the local authority administered Test and Trace Support Payment. As highlighted in Tuesday’s Newsnight, in many councils the majority of applications for the payment are being refused.    Test and Trace data from BBC Newsnight - transmission 12 January 2021 Test and Trace eligibility from BBC Newsnight - transmission 12 January 2021 In part this reflects people failing to tick all the administrative boxes needed to make a claim, such as having a NHS Test and Trace number. It could also, no doubt, reflect attempts by some people to get extra money by claiming even though they have not needed to self-isolate. However, many of the claims are rejected because of the eligibility rules set by DWP, and that’s no accident. The tight conditions on who qualifies – most importantly claiming a means-tested benefit or, in Scotland, being eligible to claim but has not yet done so – were designed to limit costs. The initial budget for the scheme was only £50million, which is just 0.1% of the cost of the Track and Trace programme and mass screening, and only enough to support 100,000 people.   The New Policy Institute has suggested extending eligibility for the payment to encourage self-isolation [1] . Its proposal is to make the payment available to  any  worker who has to self-isolate and cannot work from home or who loses earnings while they self-isolate. They estimate such a scheme could have costed around £1billion to date, twenty times the current budget allocated to local authorities. But, they argue, it could nevertheless be worthwhile given the cost of a longer and deeper pandemic. Even so, it may not be enough. In addition to the financial and practical difficulties of isolating, low income households with children face another obstacle. As well as the cost of looking after children at home all day, many households also face the problem of not having the IT equipment needed for home schooling. This is one of the reasons school attendance is much higher in this lockdown than it was in the Spring, as children who do not have a computer at home are allowed to attend school for in-person teaching. As part of wider efforts to reduce social interaction there is some demand to reverse this policy and reduce school attendance to the bare minimum. But, as well as a natural desire not to perform another U-turn, the issue of pupils not having access to IT equipment may be one the government is particularly anxious not to highlight. Making sure all pupils had the ability to learn online could have been planned for in the Autumn, just in case.  So what can the government do now? Money may be the answer. The experience with replacement free school meals is instructive, where in-kind provision through meal packs has proven far more problematic than a cash or voucher-based scheme. Similarly, rather than aiming to provide IT equipment to affected children [2] , it could be easier to provide more cash for families via benefits. The government already has a difficult decision to make about benefit levels. In three months’ time around 6 million households will lose the £20 a week (£1,000 a year) temporary uplift put in place by the Chancellor last March. This money goes to people claiming Universal Credit or Working Tax Credit but misses out millions more households who are still claiming so-called ‘legacy’ benefits. The government has left the door open to extending the £1,000 uplift, although time is running out to amend IT systems, but clearly the £6 billion cost is considerable. One option for the government would be to retain the extra £1,000 only for those Universal Credit recipients who have children but also extending it to households still claiming Child Tax Credit (one of the ‘legacy’ benefits). More radically, the extra money could be paid immediately as a lump-sum rather than spread out over the year from April. Getting money to families now would give them the ability to buy the IT equipment their children need. It would also help with the problem of needing to reduce numbers going into schools without minimising educational and material losses for children no longer attending in person. The experience with free school meals shows the many disadvantages of trying to provide help in-kind, and there is a growing consensus that giving families more money so they can buy food themselves is the better approach. The same approach is needed for getting computers to those children who need them. Rather than relying on schools to directly provide IT equipment, giving resources directly to families through higher benefit rates would be a faster and fairer solution.   [1] See https://www.npi.org.uk/blog/health/test-and-trace-paying-500-all-workers-who-need-it-will-show-societys-support-those-must-self-isolate/ [2] Details of the government’s schemes are at https://www.gov.uk/guidance/get-laptops-and-tablets-for-children-who-cannot-attend-school-due-to-coronavirus-covid-19#history and at https://get-help-with-tech.education.gov.uk/about-increasing-mobile-data https://www.entitledto.co.uk/blog/2021/january/cash-is-king-for-helping-families-self-isolate https://www.entitledto.co.uk/blog/2021/january/cash-is-king-for-helping-families-self-isolate Thu, 14 January 2021 13:50:04 £15+ billion unclaimed means-tested benefits – but the sketchy take-up data makes it hard to say for sure entitledto https://www.entitledto.co.uk/blog/2021/january/15plus-billion-unclaimed-means-tested-benefits-but-the-sketchy-take-up-data-makes-it-hard-to-say-for-sure Happy New Year to everyone in the welfare world from all of the team at entitledto! We hope you had a restful break over the Christmas holidays. As a time for reflections, the start of 2021 saw the numbers nerds in our (home) office mulling over the whereabouts of the latest government data on the take-up of income-related benefits so we could publish our annual blog on the issue. But after a little hunting and gathering we quickly realised a further part of the data had not been released and so, again, our task of independently, accurately and reliably reporting on the situation has become even trickier. This is because, over the past eight or so years, as the responsibility for the administration of various benefits has moved between central and local government as well as between different government departments, there hasn’t been one source of data on benefits take-up. We therefore needed to gather the relevant facts and figures from a range of reports published by both the DWP and HMRC, and, as time passes, the quantity of overall data made available by both departments has reduced. The result we’re unfortunately left with is that the new take-up statistics raise more questions than they answer. This year’s change is that data for the take-up of tax credits are no longer produced but, as in the past few years, we are still waiting for the statistics on Universal Credit, some seven years after the new benefit was introduced. Last year the DWP told us the “situation is being monitored and changes will be made in future as required” but, as was the case a year ago, we’re still waiting. Even more frustratingly, statistics on the take-up of help for Council Tax were stopped in 2013 (covering the 2009/10 financial year), when responsibility was moved to local authorities. This means we know nothing about under-claiming of this benefit (although anecdotal evidence suggests take-up of Council Tax Reduction is much lower than it used to be under the national scheme, for example see footnote [i] below) and it doesn’t look like the data will be made available again any time soon. So what do we know from the data that does exist? Using the best data we can find (see table below), we believe over £15 billion is being unclaimed by low income households across the UK. This means millions of our poorest families, young people and old people, disabled people, job searchers and workers are not getting the help they are entitled to. Is that better or worse than previous years? On paper things look better, as last year we reported £16 billion went unclaimed, but I’m sure you won’t be surprised that due to the sketchy statistics we really can’t reliably tell. Let’s just hope we’re in the position to paint a clearer picture about this next year. Where the total £15 billion figure comes from: We must surely get a gold star for getting this far into the blog before mentioning the words coronavirus and pandemic! However, we did want to say, although the estimates used in this blog are the most recently released, the latest year covered is 2018/19 meaning it’s all based on pre-pandemic data. Future take-up data may reflect this year being a time when many turned to the state for support for the first time. And one consequence of coronavirus is a raised awareness of the pros (although also the cons) of the welfare system in our country, meaning – hopefully – some of the missing millions have been reached. But, please still help us encourage everyone to check if they are entitled to claim benefits, now! Our free tools are here to help people quickly work out what support they may be entitled to. The pandemic means our annual plea is even more important than ever, so please share them with friends and family so they can check what help they may be able to claim.   Sources: [i]  https://www.gov.scot/publications/council-tax-reduction-scotland-annual-report-2018-19/pages/2/ [ii]  https://www.gov.uk/government/statistics/child-benefit-child-tax-credit-ctc-and-working-tax-credit-wtc-take-up-rates-2017-to-2018 [iii] https://www.gov.uk/government/publications/income-related-benefits-estimates-of-take-up-financial-year-2018-to-2019/background-information-and-methodology-2018-to-2019 [iv]  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/222914/tkup_first_release_0910.pdf https://www.entitledto.co.uk/blog/2021/january/15plus-billion-unclaimed-means-tested-benefits-but-the-sketchy-take-up-data-makes-it-hard-to-say-for-sure https://www.entitledto.co.uk/blog/2021/january/15plus-billion-unclaimed-means-tested-benefits-but-the-sketchy-take-up-data-makes-it-hard-to-say-for-sure Tue, 05 January 2021 20:18:34 Should the self-employed use SEISS to pay their tax bill? Phil Agulnik https://www.entitledto.co.uk/blog/2020/november/should-the-self-employed-use-seiss-to-pay-their-tax-bill The third instalment of the Self-Employment Income Support Scheme (SEISS) became available from today, with the application website opening for the first group of people invited to claim. Eligibility conditions for the scheme remain the same as in its earlier incarnations, excluding some self-employed from claiming, but for those who are eligible the extra income provided by the scheme will be very welcome. For those whose average earnings between 2016 and 2019 were between £37,500 and £50,000 a year SEISS remains very generous. They will get the maximum £7,500 allowed under the scheme, which for some comes on top of continued earnings (albeit at a reduced level). However, for self-employed people who are claiming Universal Credit (UC) the effect of SEISS is more ambiguous. For benefit claimants income from the SEISS counts as earnings towards their award, so the extra income reduces their UC payment. Something like this effect is inevitable when untargeted benefits like SEISS are super-imposed on a means-tested system. But with careful planning UC claimants can minimise the effect, so that they can enjoy something like the same income boost from SEISS as better-off households. There are two aspects to consider – when to make a claim and how to use the SEISS income. When to make a claim I have already highlighted the issue around the timing of SEISS claims in my previous blog on SEISS and UC but it’s worth going over the argument again. The way UC works means the exact date money is received (and paid out) can have a big effect on entitlement. Someone claiming UC needs to know their ‘Assessment Period’, which is measured as a calendar month from the date they first claimed UC. Let’s look at an example: Suzanne started her claim for UC on 17 March and so her assessment period runs from the 17th of one month to the 16th of the next. She then gets paid a week later, so in this case her next UC payment would be due on 23 December. Suzanne is eligible to claim £4,444 as a SIESS3 payment. If she puts her claim in straight away, so that it arrives in her bank account before 16 December, it will be included as income in her current UC assessment period and reduce or eliminate her award for the month. But it doesn’t have to be that way. There is no need for Suzanne to put in a claim for the third SEISS grant until 29 January, and she will receive the same amount whenever she claims. If instead Suzanne delays making her SEISS3 claim until 16 December, still ensuring it is paid before Christmas, receipt of the grant will fall into her following assessment period for UC. Delaying a further month will similarly shift the effect on her UC award until the following assessment period. In general, for all self-employed people, if there is a prospect that trading conditions will improve in the new year then delaying may be worthwhile in its own right. As earnings increase many existing UC claimants will naturally lose entitlement to UC, so there will be no additional loss caused by income from SEISS. Depending on how someone expects the unwinding of the pandemic to affect their business, delaying until the end of the claiming window for SEISS may make sense. How to use the SEISS income Even if someone expects their trading profits to remain reduced or eliminated for the first few months of next year, they can still take steps to protect their UC claim now. In particular, it is well worth considering using a SEISS grant to pay a self-assessment tax bill (which, unlike the July payment, has not been pushed back from the end of January). Just as UC takes into account income in the assessment period it is received, it also factors in business expenses in the same period. As tax payments count as a business expense for self-employed people, the timing of when a tax bill is paid can have important implications. Back to Suzanne… As her assessment period runs until the 16th of each month she would lose her December UC payment on 23 December if she claimed SEISS straight away. However, if she delayed and decided to use her SEISS income to pay some or all of her tax bill she will have an expense to set against this income which acts to protect her UC award. In general, depending on individual circumstances, it may be possible to completely eliminate the effect of SEISS on UC in this way, with the tax payment offsetting all of the additional income from the scheme. Given that the deadline for tax payments is the end of January, spending a SEISS grant first to pay a tax bill, and only then on other non-business expenditure, seems a prudent approach. The key thing to remember If you are a self-employed UC claimant thinking about using your SEISS grant to pay your tax bill the key thing is that you get your timing right. In terms of UC it’s when money goes into and out of your bank account that really matters, so if your SEISS grant arrives at the end of your assessment period you need to be careful you make your tax payment in time. The rule of thumb needs to be fairly broad brush but if you’ve just received your UC payment, or expect to receive it this week, then you have time to pay your tax before the SEISS affects your award. But if you expect to receive your UC towards the middle or end of the month it’s worth thinking about when to claim the SEISS. Delaying your claim and using the money to pay some or all of your tax bill could be the best way to manage your finances and maintain your UC award. If it means smaller, or later Christmas presents, then, in this of all years, it’s likely to be a price worth paying. https://www.entitledto.co.uk/blog/2020/november/should-the-self-employed-use-seiss-to-pay-their-tax-bill https://www.entitledto.co.uk/blog/2020/november/should-the-self-employed-use-seiss-to-pay-their-tax-bill Mon, 30 November 2020 17:55:43 Does the Scottish Child Payment mean a move to a new Scottish benefits system? Phil Agulnik https://www.entitledto.co.uk/blog/2020/november/does-the-scottish-child-payment-mean-a-move-to-a-new-scottish-benefits-system With applications for the new Scottish Child Payment opening on Monday 9 November it­s arrival could not be better timed. While bringing in a new benefit during a pandemic will no doubt be a challenge for the fledgling Scottish Social Security Agency, the need for extra money is greater now than ever. Moreover, as the row over Free School Meals illustrates, there appears to be growing public support for providing more help for children in low income families. The details of the new payment have changed little from when it was first announced, despite the pandemic. As set out in my previous blog on the Scottish Child Payment , it will be available to Scottish households with a child aged 6 or under and payments worth £10 a week per child will start in February. Administratively the key feature is that eligibility will be ‘passported’ from entitlement to other benefits – there will not be an independent test of means. Instead the rule will be that if you qualify for Universal Credit (or Child Tax Credit for households still claiming ‘legacy’ benefits) you qualify for the Scottish Child Payment. As a passported benefit the new payment enjoys lower administration costs than would be the case if the Scottish Social Security Agency operated a means test. However, this simplicity necessarily comes at the expense of reducing incentives to work, at least for some families. The issue is that families who just qualify for Universal Credit will face a ‘cliff-edge’ when their earnings rise, as entitlement for the Scottish Child Payment ends when Universal Credit falls to £0. The amount a claimant can earn before Universal Credit, and therefore the Scottish Child Payment, is extinguished varies depending on the composition of their household and the amount of rent they pay, but let’s look at an example. A home-owning couple who have a two year old child, with one of the couple working 35 hours a week and the other working 16 hours a week (both at the minimum wage for someone over the age of 25), would qualify for around £150 Universal Credit a year. Although a small amount, the entitlement to Universal Credit means they are also entitled to the Scottish Child Payment, worth more than three times as much over the year. Clearly one effect of passporting entitlement in this way is that it makes it more worthwhile to claim Universal Credit, even if there is only a small entitlement. As such it should act as a spur to take-up. But the flip-side is that, if our hypothetical couple increased their work by even an hour their Universal Credit would fall to £0 and they would also lose entitlement to the Scottish Child Payment altogether. At the moment this sort of effect is inevitable. As the Scottish Social Security Agency does not have its own means test there is little option other than to passport the Scottish Child Payment from entitlement to Universal Credit. While the level of the Scottish Child Payment remains low the cliff-edge created is relatively small and unlikely to have much effect. But if the level of the Scottish Child Payment were increased to match Holyrood’s ambitions to eradicate child poverty then the cliff-edge problem would grow. The only way out is to move away from passporting, most likely through increasing the child element in Universal Credit for Scottish households only. Whether through independence or greater devolution, we have to wonder if the introduction of the Scottish Child Payment sets the course for a completely independent benefits system for Scotland. https://www.entitledto.co.uk/blog/2020/november/does-the-scottish-child-payment-mean-a-move-to-a-new-scottish-benefits-system https://www.entitledto.co.uk/blog/2020/november/does-the-scottish-child-payment-mean-a-move-to-a-new-scottish-benefits-system Wed, 04 November 2020 11:53:17 We made ourselves a new website for our 20th Birthday Wendy Alcock https://www.entitledto.co.uk/blog/2020/june/we-made-ourselves-a-new-website-for-our-20th-birthday Do you remember using the internet in the year 2000? The millennium bug had been and gone and the dot-com boom was underway so new websites were popping up left, right and centre. But how many of those websites from 2000 can say they survived the world of dial up (I don’t think I will ever forget that screeching sound for the rest of my life) and download speeds that would make you weep? entitledto is extremely pleased to have done what Friends Reunited, Ask Jeeves, Vine and even Google+ couldn’t and not only survived the times but also done a cracking job of helping millions of people access an ever evolving but always complex benefits system at the same time. Our public website alone has seen 4,244,565 completed calculations in the last year, and many more will have been done on our fantastic clients’ websites, so we think total calculations over our 20 year history could easily be 10 times this amount. I asked our two directors for their memories of the early days of the website and founder and Technical Operations Director, Stephen Gibson told me "Inspired by my mother’s years of service as a Citizens Advice volunteer, helping those in need was built into my DNA. I started to develop entitledto in 1998 building its servers and deploying them to the web. In 2000 it was very exciting to publish the first version of the site - a one stop shop that would revolutionise information about the social security benefits system at the time. "My previous experience had led me to recognise an adequate service wasn’t being provided to people and so my first goal was to ensure the site was accurate but also easy to use by people without benefits knowledge so that it improved awareness and helped people to understand their entitlements. “This continues to be the case today and, as the rules have changed over the years, the calculator has allowed millions of people to navigate the UK’s ever changing welfare safety net at a time they need it most. I’m really proud to have done that alongside a great range of experts who have worked on the website with me.” Product Development Director, Dr Phil Agulnik, remembered “When Stephen set up entitledto I was working for the DWP and creating spreadsheets showing how benefits worked. His decision to provide a free, online calculator was miles ahead of its time. “When I first saw the site in 2003 I realised that my benefit spreadsheets were old hat. Stephen's online benefits calculator took away all the pain of calculating benefits. And because it was free for everyone to use it meant that people could become better informed about their entitlements. It was, and hopefully still is, a brilliant way for people to find out what benefits they are entitled to.” So what about our goal for the next 20 years? We want to reach as many people as we can and we will continue to play our part in helping people understand what their legitimate benefit entitlements are as we strongly believe social security is a key aspect of our society and a vital part of our modern communities. We also plan to remain independent, reliable and, maybe most importantly, accurate. Over the years we’ve always kept up with the changes taking place in the welfare world so we can give the best information to our sites users but we’ve also aimed to keep up with the changes in the technical world. The responsive design of the calculator ensures users have the best possible experience whether they are accessing the calculator from a mobile, tablet or desktop but we knew the rest of the website needed a bit of a refresh. So, as a 20 th birthday present to ourselves, we have launched ourselves a shiny new website. But before we head off into the future we wanted to take a moment to peer into our past with a look back at part of some of our previous homepage designs. We apologise to your eyeballs in advance but these really were cutting edge designs in their day! 2000 - The first website had pictures of Stephen and his family and friends 2000 - Not long after the photos were in colour and tabs were added to help with site navigation 2004 - Until this point each benefit had its own calculator but 2004 saw them evolve into one for the under 60s and one for the over 60s  2007 - Things were simplified as we moved to one calculator for everybody and we tried a new colour for a while  2013 - A new colour palette again and we're starting to see the page split into the panels we might recognise today 2016 - Bolder panels signposting people to our range of services 2017 - The first version of the design that was still in place until last week 2020 - We wonder where the next 20 years will take us? https://www.entitledto.co.uk/blog/2020/june/we-made-ourselves-a-new-website-for-our-20th-birthday https://www.entitledto.co.uk/blog/2020/june/we-made-ourselves-a-new-website-for-our-20th-birthday Mon, 29 June 2020 08:12:34 Some tips for Universal Credit claimants entitled to the self-employment income support scheme Phil Agulnik https://www.entitledto.co.uk/blog/2020/may/some-tips-for-universal-credit-claimants-entitled-to-the-self-employment-income-support-scheme See our more recent blog on this topic at  Should the self-employed use SEISS to pay their tax bill?   The government’s surprise announcement that payments from the Self-Employment Income Support Scheme (SEISS) will be made early is welcome but it also has important implications for some Universal Credit (UC) claimants. Instead of the new payment starting in June, as was previously expected, the government has now told self-employed people they can apply for the scheme from next Wednesday, 13 May, though some people will have to wait a few days longer [1]. Payments should be made within six working days, so from 21 May for people who claim on day one. Normally the early-arrival of benefit payments is something we’d all celebrate. But for some self-employed UC claimants this one has the potential to be a mixed blessing. The problem is about timing, as the exact date that money is received (and paid out) can have a big effect on a household’s UC entitlement. It is important that claimants are aware of this interaction, as they could easily get caught out by UC’s arcane rules. How the interaction between SEISS and UC can make a difference To illustrate, the way SEISS affects people who claimed UC in the first week of the lockdown (week commencing 23 March) means similar households could fare very differently. It all depends on when they claimed UC and when any money from SEISS arrives. For a family claiming UC on the very first day of lockdown their first ‘Assessment Period’ (the dates used by DWP to work out monthly income) would run from 23 March to 22 April. Their second Assessment Period then runs from 2 3 April to 22 May and each  Assesment Period thereafter would follow the same pattern. If they apply for SEISS on the first two available days – Wednesday and Thursday next week – their payment should arrive by the 21 or 22 May and it would knock out their UC claim, as the income from SEISS is taken into account in their UC next calculation. However, if the family delayed their SEISS claim until the week after their payment it would fall into their next Assessment Period for UC and they would keep their May UC award. As the date of claim moves so too do the key dates for when to claim SEISS. We don’t yet know if it will be possible to claim SEISS later in May or whether there is a cut-off date. However, if it is possible to claim later then the ideal timing would be to ensure that the SEISS payment arrives at the start of an UC assessment period. That way someone can take action to protect their UC claim if they might be adversely affected by losing entitlement. Assessment Period (AP) to 22 May and SEISS payment date 21 May = SEISS received at end of AP Assessment Period (AP) to 22 May and SEISS payment date 25 May = SEISS received at start of AP How to try and time payments The situation for people to avoid is a SEISS payment arriving at the end of their assessment period, a week before their UC reaches their bank account. If this occurs then the joy of the SEISS payment arriving may be reduced by the reduction (for many to £0) in their UC award. For some self-employed people the end of May will in any case mark the point when they are able to get back to work in earnest after lockdown. For them the arrival of SEISS will coincide with leaving UC as their earnings hopefully return to something close to their previous level. In this case losing a month of UC may not matter too much. But for other self-employed people there is little prospect of returning to work and their reliance on UC could continue for many months or even years. If this is the case it’s important to get to grips with how UC works. The way claimants communicate with DWP is via their online UC journal, where every month self-employed people have to record their exact income and expenses. In accounting jargon, UC works on a 'cash in, cash out' basis, so it’s when money arrives in and leaves someone’s bank account that counts. The principle is the same as HMRC’s cash basis for self-assessment, which measures income and expenses from 6 April one year to 5 April the next, except that DWP looks at someone’s income and outgoings at the end of every monthly assessment period. And in the same way as the tax system, business losses can be carried forward from one month to the next. So the first thing for self-employed people to remember is to claim all their expenses every month, even if they don't have any income. Losses made now get carried forward and are set against their income from SEISS. Is deferring July's tax bill in everyone's interest? But the more important consideration for people is when to pay their bills, in particular their tax bills. If they can’t get their business going again in June, because of social distancing restrictions or because of the economic downturn, they need to plan their finances over a longer time period. In this case it may make sense to offset the income from their SEISS payment with equivalent expenses, so that their UC award stays around its current level. For self-employed people who are facing a prolonged period on UC the offer to defer paying outstanding tax bills until the start of 2021 may not be that attractive, as they may not be a lot richer in January. If this is the case then using their SEISS payment to pay any outstanding tax bill could be a good way to maintain their UC claim. It's not just the UC award that could be affected For most people the timing of when they receive their SEISS payment will only affect their UC award. However, the consequences could be more extensive for people who have claimed a ‘Discretionary Housing Payment’, a grant from their local authority to help meet housing costs. A condition that councils must check before granting an award is that the household are receiving the housing costs element of UC for the period any DHP covers. So if someone’s SEISS payment arrives in the same month as their DHP application is assessed then the grant cannot be awarded, no matter how severe their housing need. At the time of writing it is not clear whether a SEISS claim can be submitted later on in May. But to avoid the same situation as has arisen with people mistakenly leaving tax credits for UC, where small decisions have unexpectedly large consequences for claimants, it will be important that there is flexibility about when SEISS is claimed. Sources [1] https://www.gov.uk/government/news/self-employed-invited-to-get-ready-to-make-their-claims-for-coronavirus-covid-19-support https://www.entitledto.co.uk/blog/2020/may/some-tips-for-universal-credit-claimants-entitled-to-the-self-employment-income-support-scheme https://www.entitledto.co.uk/blog/2020/may/some-tips-for-universal-credit-claimants-entitled-to-the-self-employment-income-support-scheme Thu, 07 May 2020 12:40:40 More ways to deliver help to self-employed people during the coronavirus outbreak Phil Agulnik https://www.entitledto.co.uk/blog/2020/march/more-ways-to-deliver-help-to-self-employed-people-during-the-coronavirus-outbreak It’s the uncertainty that gets to you. For all of us, but older and more vulnerable people in particular, uncertainty about the epidemiology of the virus is the over-riding concern. How many people will become ill? What effect will social distancing measures have? When will a vaccine be available? But linked to uncertainty about the length and depth of the outbreak is economic uncertainty. How will household finances cope during an indeterminate period where, for many, the opportunity to earn a living is necessarily curtailed? Now that the government has brought forward relatively generous support measures for employees, it is self-employed people who are particularly suffering economic uncertainty. However, as the government correctly points out, there are limited practical options for providing financial relief to self-employed people. If we break it down, there are four kinds of approach. They are: Means-testing using the existing rules in the benefits system - self-employed people with a low enough income can claim Universal Credit (UC). This is the default position. Changing the rules in the benefits system so that a different mixture of existing benefits is provided to self-employed people. A new kind of benefit for the self-employed, mirroring the help now being provided to employees. Provision of relief using the tax system. Universal Credit The main issue with the first approach, as illustrated by this weekend’s outcry over the government’s perceived lack of support for the self-employed, is that UC is inherently designed for low-income households. Though the government’s increase of £20 a week is welcome, the level of benefit remains under £100 a week (excluding help with extra needs). Most people think this is unacceptably low, at least for people who have recently been in work and grown accustomed to higher living standards. However, if UC were made substantially more generous it would mean expanding the reach of means-testing up the income scale and, because there is no way of stopping existing claimants also gaining, the cost would be very substantial. Other existing benefits A second approach is to use other parts of the existing benefits system to provide assistance to the self-employed. The aim is partly to ease administration of a large number of new claims and partly to make the system (slightly) more generous. The approach relies on a mixture of contributory benefits, which are easier to claim and (in some cases) paid at a higher level, and ‘legacy’ means-tested benefits like Housing Benefit. This kind of pragmatic response is discussed in my blog from Thursday , when the duration of the outbreak appeared likely to be relatively short. In these circumstances tweaking the existing contributory benefits system to extend eligibility could be the best way to provide rapid assistance to self-employed people. Similarly, practical considerations suggest using existing systems (currently being phased-out in favour of UC) to help meet extra needs for rent or children. However, while this approach is practical and promises to deliver help quickly, it similarly risks the criticism that it is insufficient to meet the scale of the current crisis. The level of support provided is too low for many, and while it would be possible to increase rates for contribution-based benefits only, the amount of help provided to people affected by coronavirus cannot be divorced entirely from benefit rates for all claimants. Earnings-related benefits A third approach is to create a new earnings-related contributory benefits system, so that the 80% replacement of previous earnings applied to employees is also applied to the self-employed. The association of Independent Professionals and Self-Employed (with other representative groups) have advocated a ‘temporary income protection fund’ along these lines. Borrowing from the scheme Norway has introduced, the idea is that until movement restrictions are lifted the government would guarantee 80% of an individual’s average income over the last 3 years. Presumably the basis for measuring their income would be tax or National Insurance records, though accountants may be able to supply this information for verification later. One obstacle to this approach is administrative. It is not possible to create a new social insurance system overnight - as we don’t know how long the economic freeze will last, it is difficult to assess whether the costs are worth the effort. Moreover, the principle of earnings-related benefits, which tend to replicate labour market inequality, has never taken root in the UK in the way it has in most European social security systems. In the UK the state’s role is generally seen as being to provide a minimum income, either through targeted (means-tested) benefits or through more-or-less universal benefits like the state pension. Using the tax system The final approach to providing help to self-employed people is to use the tax system. A very short term solution, which essentially brings forward an existing entitlement, is to use the personal tax allowance to deliver relief. The idea is that self-employed people would be able to claim the value of the tax allowance as an upfront benefit. In return they then pay tax on everything they earn when, and if, they get back to work. The numbers work as follows: The current income tax allowance of £12,500 means that someone who earns £20,000 pays 20% tax on £7,500 of their income, a tax bill of £1,500. So the effective value of the personal allowance is £2,500. For self- employed people this ‘benefit’ is normally taken in January following the end of the tax year, when tax is paid on the previous year’s income. Instead, self-employed people could claim their allowance upfront from 6 April and then pay tax on all their earnings. As with all tax and benefit schemes, qualification rules would be important. Defining what constitutes self-employment is far from easy: while the National Insurance system recognises it through class 2 and 4 contributions, in practice many self-employed people pay themselves through dividends as a company director. The only solution is to give everyone (or, perhaps, everyone who has earned more than the tax allowance in previous years) the choice of whether to receive the tax allowance upfront or when their tax bill is calculated. For those receiving the money upfront all income received during the year would then be taxable in full, so the advantage is really about the timing of income rather than its amount. For the government, the advantage is that it buys time to agree a system that could work if the coronavirus outbreak lasts for longer than 2 or 3 months. If restrictions on labour carry on for a long time then it would be possible to carry on making direct payments to self-employed people, perhaps at the rate of £2,500 every quarter. This would create a kind of basic income. One which is not universal but is instead better labelled a ‘participation income’. In particular, it would not change reliance on means-tested benefits for existing claimants. It could deliver a far higher level of income for self-employed people than is realistic if the benefits system is used as the principal means for providing assistance. A generous scheme that paid out for a whole year would be extremely expensive. If the scheme provided £10,000 to all 5 million self-employed people then it would cost £50 billion (though a quarter of this would in effect just be the existing tax allowance). The question of how to pay for this enormous sum could not be ignored. One option would be to see money received during the coronavirus outbreak as a loan from the state, to be paid back individually. Perhaps it could work like student loans and be paid back through an extra contribution on top of tax. At the other extreme, the price paid by self-employed people could be collectivised and take the form of higher taxes. As we are seeing played out during the current crisis, at the moment self-employed people have few or no work rights and qualify only for means-tested benefits paid at a low rate. In return they pay less tax, because they pay lower National Insurance than employees if they are self-employed and none if they take dividends. If self-employed people are now insured by the state in a way that is comparable with employees the argument for merging tax and National Insurance would grow stronger. If tax rates were held constant, considerable extra revenue would be raised - largely from self-employed people. But once implemented, merging tax and National Insurance would allow the burden of paying off debt to be spread fairly, according to individuals’ ability to pay rather than their employment status. https://www.entitledto.co.uk/blog/2020/march/more-ways-to-deliver-help-to-self-employed-people-during-the-coronavirus-outbreak https://www.entitledto.co.uk/blog/2020/march/more-ways-to-deliver-help-to-self-employed-people-during-the-coronavirus-outbreak Mon, 23 March 2020 12:21:42 Delivering social security during the coronavirus outbreak Phil Agulnik https://www.entitledto.co.uk/blog/2020/march/delivering-social-security-during-the-coronavirus-outbreak The government’s response to the economic fallout from coronavirus is growing rapidly. Following the money made available in the recent Budget, the Chancellor has already announced extra measures to help rescue businesses through a £330 billion package that rivals the response to the 2008 financial crisis. However, the government’s additional plans for helping individuals affected by the virus are yet to be released. One response that has been widely advocated is to extend Statutory Sick Pay (SSP) to include all workers, including low hours workers, and to increase the rate of the allowance from its current level of £94.25. For instance, Citizen’s Advice  has advocated extending eligibility to employees earning less than £118 a week, who are currently excluded because they earn less than the National Insurance ‘Lower Earnings Limit’. But whatever level of benefit is set for SSP, and however its rules are tweaked, how to deliver help to self-employed people is a major challenge. The issue is that there is no existing benefit for self-employed people that matches SSP for employees, in the way that Maternity Allowance provides a minimum income for self-employed women during and after pregnancy. The government’s current answer is to rely on the means-tested benefits system, which for new working-age claimants means claiming Universal Credit (UC). But even without the administration issues that have beset the benefit, it is difficult to make UC as generous as SSP, whatever rate of assistance is set. The reason is that UC is based on a household income test while SSP is given to the individual ‘as a right’, without a means test. Instead of using UC to provide relief it makes more sense to help self-employed people through the contributory benefits system. Because eligibility is not means-tested, and is for the individual rather than the household, it is inherently a more generous benefit. For instance, a couple would receive £148.70 a week if they both claimed a contribution-based benefit, compared to an entitlement of £115 a week for a couple on UC. If the government wanted to go further they could increase the rate of ‘new-style ESA’ to the higher ‘support’ rate, which would provide a couple with £223 a week. While there is certainly a case for increasing benefit rates for all claimants, focussing increases on contribution-based benefits could better target people who are no longer able to earn an income because of coronavirus and are making a new (and hopefully temporary) claim for benefit. The current conditions that claimants need to fulfil to qualify for contribution-based benefits are cumbersome (they are set out in full in our contribution based ESA and contribution based JSA guides). Instead they should be replaced by a looser and simpler condition that allows more self-employed people to qualify, relaxing the complex rules around needing to have paid National Insurance Contributions for particular lengths of time. Extending the reach of contribution-based benefits in this way of course runs counter to Beveridge’s original aim, which deliberately restricted entitlement to people who had contributed (via National Insurance) in the right way, at the right time and at a high enough level. But in current circumstances a more generous interpretation of contributions seems appropriate. Moreover, contribution-based benefits could allow benefit money to be delivered to individuals within 2 weeks of their claim – far quicker than the 5 week wait under UC – without a means-test and, for couples at least, at a higher rate. The current level of help provided by contributory benefits might provide sufficient support for homeowners, who will also benefit from the mortgage payment relief already announced by the government. But for self-employed people with extra needs or costs, because they have children or pay rent, this help will not be enough. That’s why means-tested benefits exist – so that a household’s needs are recognised as well as their income. It is also why many self-employed people with children or paying rent already claim benefits, some through UC but many more through the ‘legacy’ benefit systems of tax credits and Housing Benefit. The way the system works at the moment would mean that self-employed people with extra needs would have to claim UC on top of a contributory benefit, even if they are already claiming tax credits or Housing Benefit. That’s because existing claimants are gradually being migrated onto UC, with a change of circumstance being the trigger for moving from the ‘legacy’ benefit. The current change of circumstance rules are therefore bound to put massive pressure on administration of UC, as they mean both new and existing claimants have to claim it from scratch. It is an unnecessary hurdle for existing claimants and a recipe for poor administration, as the UC helpline will inevitably grind to a halt under the weight of new claims. Instead of heaping extra work on UC the government should suspend the rules around changes of circumstance for existing claimants. For people already claiming Housing Benefit or tax credits their claims should continue, so that help with rent and children can continue to be supplied (with the amount of support provided automatically adjusting to reflect the household’s reduced income). The tax credits helpline and online support still exist for the millions of people that remain on the benefit, and the elimination of appointments with members of the public may assist local authorities in their efforts to help claimants. So as well as keeping Housing Benefit for existing claimants and abandoning the change of circumstance rules, the government should re-open the scheme to new claimants. In terms of delivering assistance, reopening Housing Benefit is likely to be the most effective method to get help rapidly and effectively to private sector tenants. It also has two other advantages. First, it will make it easier for people to get help with Council Tax, as local support schemes are administered together and there is a single claim form for help with both rent and Council Tax. Second, Housing Benefit already has a built-in mechanism to provide extra help to private renters via the ‘13 week rule’. This allows new claimants who had previously been able to meet their rent without claiming benefit to have their rent met in full for three months, regardless of the restrictions set through the Local Housing Allowance rules. There is no such provision under UC, so the vast majority of new claimants would not get full help with their rent but instead would find assistance capped at the level of the cheapest 30% of private sector rental properties. In summary, reopening legacy benefits would help share administrative burdens between central and local government, reduce new claims from people already on tax credits and Housing Benefit, and facilitate expanding contribution-based benefits. But what about the government’s long term plans to abolish legacy benefits in favour of UC?  The truth is that the attempt to move everyone onto UC via ‘managed migration’ is already at least 5 years late and is only being trialled in one local authority. The effort required to move over existing claimants is simply not worth it, and a future where benefit rates are equalised between UC and legacy benefits, getting rid of the need for ‘transitional protection’, is a more likely outcome. If the challenge of coronavirus helps us get there more quickly it would at least be one good thing to come out of the current crisis. https://www.entitledto.co.uk/blog/2020/march/delivering-social-security-during-the-coronavirus-outbreak https://www.entitledto.co.uk/blog/2020/march/delivering-social-security-during-the-coronavirus-outbreak Thu, 19 March 2020 12:40:16 Budget update March 2020 Wendy Alcock https://www.entitledto.co.uk/blog/2020/march/budget-update-march-2020 After a cancellation due to dates clashing with last year’s snap election, and an uncomfortably close change of chancellor, I’m sure I wasn’t the only one to be wondering if yesterday’s budget would take place as planned. But take place it did. With coronavirus leading the headlines on a daily basis, it was a perfect opportunity for the government to answer many of the fiscal concerns the problematic pandemic has raised for people across the country. However, there were also a few other benefit-based announcements hidden away in the published reports. Read on for our summary of the welfare-based changes announced by the Chancellor, with dates and details known at the time of writing. Support for people affected by COVID-19 The budget confirmed a couple of areas we already knew were being put into place for people who are unable to work due to coronavirus and it also added a little more detail. The current situation is as follows: Statutory Sick Pay (SSP) will temporarily be extended so that people who are advised to self-isolate will be paid from the first day of sickness absence, rather than the fourth day. It will also be available for people caring for those within the same household who display COVID-19 symptoms and have been told to self-isolate. Employers are being advised to use their discretion not to require a GP fit note for COVID-19 related absences. The government will be introducing a temporary alternative to the fit note in the coming weeks which can be obtained by calling the NHS111 line rather than going to see a GP. Where someone isn’t working or isn’t eligible to claim SSP (for example the self-employed or people below the Lower Earnings Limit) they will be able to claim ‘new style’ Employment and Support Allowance (ESA) and Universal Credit (UC). To aid this process a few rules will be changed: The current eight waiting days before a new style ESA payment commences will become one day. When claiming UC people will not need to go into a job centre to get access to an advance payment. The minimum income floor will be temporarily relaxed for a period of time while someone is required to self-isolate or is ill as a result of COVID-19. New self-employed UC claimants who are required to self-isolate or are ill as a result of COVID-19 will be treated as having Limited Capability for Work and will not have a Minimum Income Floor applied. [Update 12 March: The Minister for Disabled People, Health and Work Justin Tomlinson confirmed today that everyone who is infected with COVID-19, or who is required to self-isolate, will be treated as having limited capability for work for both ESA and UC without the requirement for medical evidence or undergoing a Work Capability Assessment]. The government will also be providing Local Authorities in England with £500 million of new grant funding to support economically vulnerable people and households in their local area, which it expects will mostly be used to provide council tax relief. The Ministry of Housing, Communities and Local Government will be releasing more information on this fund shorty. We believe all of these changes will be included in the new COVID-19 Bill, which will be started next week, but have asked the DWP for confirmation. Universal Credit advances and deductions From October 2021, the period over which Universal Credit advances will be recovered will increase up to 24 months. This was due to be increased to 16 months on this date from the current 12. From the same date the maximum rate at which deductions can be made from a Universal Credit award will reduce from 30% to 25% of the standard allowance. Personal Independence Payments From June 2020, the frequency of health assessments required for people receiving Personal Independence Payment will be reduced and a minimum review award length of 18 months will be applied to claimants whose condition is unlikely to change. Extra help for parents of sick or premature babies From April 2023, a new entitlement to Neonatal Leave and Pay will be created for employees whose babies spend an extended period of time in neonatal care, providing up to 12 weeks paid leave so that parents do not have to choose between returning to work and taking care of their vulnerable newborn. Extending exemptions for the Shared Accommodation Rate From October 2023, exemptions to the shared accommodation rate for Housing Benefit and housing costs in Universal Credit will be extended to rough sleepers aged 16-24 (this currently covers 25-34 year olds), care leavers up to the age of 25 (currently this covers people aged under 22) and two new exemptions will apply to victims of domestic abuse and human trafficking Enhancing Housing Benefit compliance The Budget provides further investment of up to £12 million per year in local authority resource to maximise their capacity to tackle Housing Benefit fraud and error. National Living Wage The government has asked the Low Pay Commission (LPC) to make recommendations with the view of reaching a National Living Wage (NLW) of two-thirds of median earnings by 2024, provided economic conditions allow. The LPC are expected to report back in October 2020. Following recommendations already made by the LPC, the NLW will apply to workers aged 23 and over in April 2021, with a target for it to apply to workers aged 21 and over by 2024. Confirmation of a few changes we already knew about From January 2021, access to non-contributory benefits for EEA migrants arriving in the UK under the new immigration system will be aligned with those for non-EEA nationals. From January 2021, Child Benefit payments will be stopped for children living overseas for EEA migrants arriving in the UK under the new immigration system. From next month there will be a delay to the reduction of the Universal Credit surplus earnings threshold, so that only large income spikes above £2,500 will be taken into account. The threshold will be reduced to £300 in April 2021. Funding will be made available to ensure claimants do not experience a gap in their benefit entitlement when moving from Universal Credit to Pension Credit. Funding will be made available to increase the rate of transitional payments for claimants in receipt of Severe Disability Premium when they move to Universal Credit. Responsibility will be transferred to the Scottish Government for around £3 billion of disability benefits in April 2020. The 3-year sanction from Universal Credit and Jobseeker’s Allowance is being removed bringing the high-level sanction to 13 weeks for the first failure to comply with conditionality or work search requirements and 26 weeks for each subsequent failure, making 26 weeks the duration of the longest single sanction in Universal Credit and Jobseeker’s Allowance. --- We hope you found this a useful summary. Where needed, all our tools will be updated to factor in the changes and if we find more detail on any of the announcements we’ll post them on our social media channels, so please do follow us on Twitter , Facebook and LinkedIn . Sources: https://www.gov.uk/government/publications/budget-2020-documents/budget-2020 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/871948/Budget_2020_policy_costings.pdf   https://www.gov.uk/government/publications/support-for-those-affected-by-covid-19/support-for-those-affected-by-covid-19 https://www.entitledto.co.uk/blog/2020/march/budget-update-march-2020 https://www.entitledto.co.uk/blog/2020/march/budget-update-march-2020 Thu, 12 March 2020 10:45:50 How is the Move to Universal Credit ‘Who Knows Me’ pilot progressing? Wendy Alcock https://www.entitledto.co.uk/blog/2020/march/how-is-the-move-to-universal-credit-who-knows-me-pilot-progressing Last week the DWP ran one of its Universal Credit Stakeholder Update Events, where organisations involved in helping people access the new benefit are given an update on recent changes by the department. The main topic of this event was managed migration and how the Move to Universal Credit ‘Who Knows Me’ pilot is progressing in Harrogate, but a few other updates were covered at the same time. As I’m sure you can imagine the meeting was well-attended with around 100 people from organisations across the UK travelling to London. I managed to speak to several of our clients in the room – if you were there too sorry not to catch you – but in case you didn’t make it to the event here is a summary of the key updates provided. Migration numbers We first heard from Neil Couling, Senior Responsible Owner for Universal Credit, on the progress of Universal Credit migration to date. As covered in recent news reports, Neil started with a recap of the numbers of people expected to go through managed migration. Revised numbers now suggest this will be 2.8 million people, rather than the previously expected 1.9 million. This is due to lower numbers of people reporting a change of circumstance and going down the natural migration route. One expected change that has not been taking place is the number of people moving in and out of work, which has been lower than predicted. Neil stated he is not concerned at the slower pace of people moving as this allows the department to adapt and learn. As soon as migration speeds up the DWP will be less able to make changes to the policy. On that note, Neil was keen to stress during his presentation the department are still in listening mode. They have made some changes to the managed migration pilot based on previous feedback and so he encouraged organisations with views to share them. Move to Universal Credit ‘Who Knows Me’ Universal Credit Product Director Lara Sampson then gave an update on the planned process of the ‘Who Knows Me’ pilot which started in Harrogate in July 2019. Once testing has been completed in Harrogate two other jobcentre areas with different groups of residents will also be chosen to pilot the three models described below. This pilot work will be stage 1 of the managed migration plan and it was intentionally started small – in the same way the full service roll out was – so that changes could easily be applied during the pilot. There are three models being tested to see what works best for different audiences: a)      Working with DWP work coaches This strand has already started and some people have been through the ‘move’ process and are now claiming Universal Credit. By virtue of people in this group being in contact with the jobcentre this group is mainly made up of existing JSA claimants (there are some ESA claimants too) and so it is accepted this is not currently representative of all groups of people who will need to move. So far around 200 people in Harrogate have started the process. It begins with a leaflet explaining what Universal Credit is and what will happen during the ‘move’ process. This is followed by specific advice for each claimant based on their needs, for example, if someone says they are not very confident making an online claim they are told about the free Learn My Way website which gives help on using a computer, including a short intro to Universal Credit. https://www.learnmyway.com/courses/universal-credit-a-how-to-guide/ If you remember, last summer’s Managed Migration Regulations stated that people would be given a ‘deadline day’ that they needed to apply for Universal Credit before. And if they did not claim in time their legacy benefit(s) would be stopped. As you can imagine many concerns were raised about this approach. The DWP has said it has listened to these concerns and a key part of the pilot project so far has been that claims are not being closed if they are not completed in the given timeframe. While this policy is not guaranteed to carry through to all managed migrations it is positive to see it being tested. It is likely work in this strand will soon start with a second jobcentre (yet to be announced) followed by a third a few months later. b)      A partner-led approach working with Housing Associations This strand is due to commence in the next few weeks and initial work will take place with The Guinness Partnership in Harrogate. The two follow on jobcentres used for the strand above will also be used. The goal of this group is to carry out testing with some non-government agencies. c)       HRMC tax credit team The final group will work with tax credit claimants via HRMC. This strand will start in Harrogate this summer and it is expected to eventually move into the two follow on jobcentres, as above. Once all of these models have been tested and evaluated (more on this below) things will start to speed up. Stage 2 of the managed migration will be able to begin (expected to start towards the end of 2020) which will involve between 10,000 and 50,000 people being moved each month. And finally stage 3 (planned to be Oct 2022 to Sep 2024) will get quicker again with around 100,000 people being moved each month. It has not yet been decided how these stages will be rolled out, for example by different benefit or geographically, but we are sure to hear more about this in due course.  Other recent service improvements We also heard a little about other service improvements that have recently been applied for new Universal Credit claimants at the start of their claim. These include more details being given on someone’s initial statement, which they will receive as soon as they submit their Universal Credit claim. New information will include what the impact of any advances may be, a breakdown of any deductions they are likely to have applied, a breakdown of their housing costs (to help people see if their full rent is covered) and information for people who receive more frequent payment (as well as what this will mean for their Universal Credit amounts over the coming months).  There has been some work on helping vulnerable claimants at the start of their claim, for example getting the right ID for verification purposes and having access to a bank account to receive their Universal Credit payment. Procedures are also being improved for landlords with faster processing of APAs, so that landlords can be paid more quickly, and improvements are being put in place for private landlords too. Finally, in the afternoon, Universal Credit Lead Analyst Graeme Connor, spoke about the ‘Move to UC’ Evaluation Strategy. In groups we shared views on what we would like to see covered in the initial progress report into managed migration, expected this Autumn. There were too many suggestions to report on them all but a main theme was how the ‘Who Knows Me’ approach is going to impact on the resources of the wide range of partner organisations both in the room and not. I am sure these questions will continue to be raised and we look forward to hearing further answers from the department later this year. https://www.entitledto.co.uk/blog/2020/march/how-is-the-move-to-universal-credit-who-knows-me-pilot-progressing https://www.entitledto.co.uk/blog/2020/march/how-is-the-move-to-universal-credit-who-knows-me-pilot-progressing Mon, 09 March 2020 19:06:13 £16 billion remains unclaimed in means tested benefits each year entitledto https://www.entitledto.co.uk/blog/2020/february/16-billion-remains-unclaimed-in-means-tested-benefits-each-year Today sees the long awaited release of the DWP’s annual stats about the take-up of income-related benefits [1]. It usually releases this data in November each year but this year it was postponed to allow further time for quality assurance and to ensure the data meets the standards for the Code of Practice for Statistics. Now the numbers have been released we can see why they needed to delay publication, because the way the take-up estimates are produced has been changed for this year’s publication. However, dig a little deeper and you will see the changes have also been applied backwards for last year’s statistics for 2016/17 which explains DWP’s comment that “comparisons to earlier years should be treated with caution as these changes have only been applied to 2016/17 and 2017/18 data.”[2] We were also hopeful the delay would mean that numbers for Universal Credit would be included for the first time but, the DWP told us that, as in previous years, “Universal Credit take-up rates were unable to be estimated”. However, it also said “this situation is being monitored and changes will be made in future as required”. This lack of this data is already having an effect on how we compare take-up rates from one year to the next for the benefits it replaces, and the result is that they show an incomplete picture. We expect Universal Credit take-up to be relatively low, as the people who are moving on to it (people with a change of circumstance or making a new benefit claim) are from groups who usually have the lowest take-up. But until we get the full picture, showing both Universal Credit and ‘legacy’ benefits, it will be difficult to give an accurate overall picture of trends in benefit take-up. We really hope this situation is resolved for the next batch of stats. HMRC, usually the slightly slower of the two departments to publish its numbers, released its Child Benefit, Child Tax Credit and Working Tax Credit take-up rates back in December [3], as per its usual schedule. Alongside today’s number from the DWP this means, as the true take-up figure fans we are, we’re now in the position to merge the headline figures from both departments to provide an overall picture of unclaimed benefits across the UK. Sadly, as usual, it’s not the story we want to hear. Millions of low income households are still not getting the help they are entitled to and billions of pounds are going unclaimed by some of our poorest families each year. £16 billion in fact. £16 billion is indeed high but if you compare it to last year’s figure of £21 billion it looks like a boon for benefits being claimed – a huge drop of 25%. But those methodological changes we mentioned above have a lot to answer for here. The biggest effect of the new methodology is on Pension Credit take-up. The new methodology means that better account is taken of income from non-means-tested benefits, including the state pension. This in turn means the number of people failing to claim a benefit, as well as the amount unclaimed, are lower than estimates under the previous methodology and this has the effect of reducing DWP’s estimate for the amount of money lost through low take-up. However, they do not necessarily mean that the problem is getting better. We actually expect the effective cost of not taking up a Pension Credit entitlement to increase when the BBC licence fee is linked to Pension Credit receipt for over 75s. But I’m sure we will have more to say about that in a future blog. Where the total £16 billion figure comes from:     Benefit name Number of entitled families not claiming in 2017/18 Amount unclaimed Child Tax Credit 670,000 £2,490,000,000 Working Tax Credit 950,000 £2,540,000,000 Pension Credit 1,060,000 £2,160,000,000 Housing Benefit 920,000 £2,680,000,000 Job Seekers Allowance (Income Based) (a) 410,000 £1,380000,000 Income Support / Employment and Support Allowance (Income Related) 300,000 £1,240,000,000 Council Tax Support 2,770,000 (b) £2,595,000,000 (c) Child Benefit 513,000 £825,000,000 Universal Credit Figures not available Figures not available Total 7,593,000 (d) £15,910,000,000 All figures are based on central estimate figures for entitled non-recipients for 2017/18 unless noted below: (a) Figures for 2015/16 - the most recent data for this benefit. DWP stated “At this point in the UC rollout schedule, there is no practical way to distinguish between JSA and UC at entitlement level for the purposes of estimating take-up statistics. Therefore, the JSA data are not of a suitable quality to be published."[4] (b) Figures based on the last available take-up statistics for support to pay Council Tax from the financial year 2009/10. (c) Using the mid-point of the total amount of Council Tax Benefit unclaimed in 2009/10 (between £1.7 billion and £2.42 billion [5]) this figure has been inflated to 2018 prices using the Bank of England Inflation Calculator. (d) Not unique families as some may be entitled to more than one benefit.   It’s not as simple as dividing the number of entitled non-recipient families by the total amount unclaimed, as many families could be entitled to more than one benefit, but if we did over simplify the system in this way it would mean a typical amount of £2,000 a year should be in these families pockets. And eventually being spent in their local shops or on their local services all serving to boost their local, and ultimately our national economy. Help us encourage everyone to check if they are entitled, now! Even for those with no knowledge of the benefits system – and let’s face it the complex rules and regulations are enough to put many off - our free tools help people quickly work out what they may be entitled to. Please share them with friends and family to see what help they may be able to claim.   Sources: [1] https://www.gov.uk/government/statistics/announcements/income-related-benefits-estimates-of-take-up-financial-year-2017-to-2018 [2] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/867983/income-related-benefits-background-information-and-methodology-2017-2018.pdf [3] https://www.gov.uk/government/statistics/announcements/child-benefit-child-tax-credit-ctc-and-working-tax-credit-wtc-take-up-rates-2017-to-2018 [4] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/867983/income-related-benefits-background-information-and-methodology-2017-2018.pdf [5] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/222914/tkup_first_release_0910.pdf https://www.entitledto.co.uk/blog/2020/february/16-billion-remains-unclaimed-in-means-tested-benefits-each-year https://www.entitledto.co.uk/blog/2020/february/16-billion-remains-unclaimed-in-means-tested-benefits-each-year Thu, 27 February 2020 14:07:49 entitledto and Team Netsol respond to the Scottish Parliament benefit take-up inquiry entitledto https://www.entitledto.co.uk/blog/2020/january/entitledto-and-team-netsol-respond-to-the-scottish-parliament-benefit-take-up-inquiry The following was submitted as a joint response by Malcolm Gardner from Team Netsol Ltd and entitledto Director Phil Agulnik to the Scottish Parliament's Social Security Committee take-up inquiry in November 2019. Both Phil and Malcolm will also be giving evidence to the committee tomorrow - 9am, Thursday 23 January - which can be viewed live on the Scottish Parliament TV website.   There are many factors behind low take-up of benefits, as detailed in other submissions to the enquiry. However, a persistent theme is that the hassle of applying for benefits put some people off, particularly as it often involves filling out multiple forms. For people who are unable or unwilling to use the internet then the existence of multiple paper forms, and complicated rules, is a difficult issue to resolve without investing significant amounts in benefits advice (instead of, for instance, increasing benefit levels). But for an increasing proportion of the population the issue is principally about how they access benefits via the internet. Even people who are happy with, and in some cases prefer, digital channels, still face a system where many do not know their entitlements or are put off by the difficulty of application process. The approach adopted by some LAs is in combining forms (see for instance the submission from Highland Council about their single application form). But because different benefits are administered by different agencies there will always be limits in terms of how far this approach can go. The limits are: inconsistencies in the requirements and the intentions of different benefit schemes, and rigid interpretation of data protection rules, agency and organisational reluctance to share data (in the case of private sector companies to share anything that could undermine their market share), and a failure to ensure that there is a golden thread running from data collection through assessment to outcomes. This combination of limits means that most analytical assessments used to identify potential impacts on current claimants can only superficially indicate potential take-up. Most welfare Impact assessments have not really been more than data matching exercises that are reactive to known events. To create successful take-up four processes are required: 1) Simplified application form that utilises known data (from a range of data sources) and elements of AI and machine learning to identify citizen’s needs. 2) Real time analysis of conditions that can not only react to changing situations but also predict both actual and likely changes to circumstance. This form of analytics goes beyond data matching and data filtering by making deductions through techniques such as statistical inference and hypotheses utilising machine learning algorithms that automatically apply complex mathematical calculations to big data. 3) More ambitious is data interoperability [1] which would allow policy makers and administrators to target, not only those citizens who we know are need of support but critically those that are hidden from us. 4) A communications platform that utilises direct communication with the citizen, focusing on information, and prompted (email, SMS, push) notifications to helping applicants and claimants to ensure that changes to their circumstances are maintained–thus avoiding overpayments./p> Data interoperability can be supported by a range of appropriate data sources, such as, data owned by the Scottish Government, Local Councils and through Open Banking, HMRC tax data, DWP data. GDPR permissions should be incorporated into the data collection and the single application form to safeguard personal data. One of the biggest blockers to take-up is data protectionism, whereby data owners create pseudo data protection rules that places blockers on the appropriate sharing of data. A recent report by HMRC ' Customer Experiences of Tax Credit Overpayments ' highlights that customers are unclear about what details they have to report and to who. There is an expectation that information reported to one agency will be shared with another. While this may not be treated as carte blanche sharing, it is expected that data should be shared where it is in the best interest to do so. It is clear, that the citizen would be more inclined to take up benefits if they were assured that the application is simple and appropriate data is reused and shared where it prevents a detrimental impact on another benefit or support. As a Benefits Manager for a large urban town, I was often asked by elected members to run take-up campaigns. The key issue for any of my campaigns was communication and simplifying the application process. Any campaign will achieve improvement in take-up. The inherent difficulties are, for a short period of time, alleviated by the additional resources allowing that assistance is given in completing claim forms. And where communication is targeted to selected groups or cohorts, and resources are made available to ensure quicker assessments. But for take-up to be successful then it must be a living and continuous process. We believe that new technology and modern direct media allows for the process of take-up and claiming to be streamlined and automated. We would not do this alone. Both Team Netsol and entitledto would see that to architect a quick and efficient welfare system does not need to merge benefits but to manage data flows, machine learning and communication so that support can act as a hive resource interacting directly with the citizen. As providers of entitlement calculators and claim forms we want to play our part in reducing the difficulty of finding out what you are entitled to and then applying for it and ensuring that your claim is properly and efficiently assessed, awarded and maintained. We partner with other providers for the range of skills and services needed for modern technological solutions. Whether that is AI and Machine learning from the likes of XpertRule Ltd or telephony and push services suppliers or data sources such as Ascendant Solutions Limited or Experian. Equally, we believe that the technology is the tool to deliver policy and strategy and not in itself the driver of better services. Therefore, we always see our primary partner is regional and local government. Team Netsol Ltd ran the electronic Scottish census in 2011, the most successful online census in Europe. It also has 20 years’ experience in collecting data and managing sophisticated multi-benefit electronic applications forms. entitledto is one of the most trusted providers of an award-winning multi-benefits calculator, used by local authorities, social housing providers and welfare advice agencies. Both Malcolm and Phil have long experience in social policy. Malcolm started his career in ICT but spent the last 25 years running revenues and benefits departments, counter-fraud teams and the Welfare Reform Club. He has now returned to his technological roots as business analyst for Team Netsol. Phil is a foremost expert in benefit policy and its application, and this knowledge has ensured that entitledto has remained the best calculator of its kind. Between the two companies we cover 75% of Scottish Households.   Notes [1]  Data interoperability addresses the ability of systems and services that create, exchange and consume data to have clear, shared expectations for the contents, context and meaning of that data . https://www.entitledto.co.uk/blog/2020/january/entitledto-and-team-netsol-respond-to-the-scottish-parliament-benefit-take-up-inquiry https://www.entitledto.co.uk/blog/2020/january/entitledto-and-team-netsol-respond-to-the-scottish-parliament-benefit-take-up-inquiry Wed, 22 January 2020 14:42:56 entitledto welcomes Scotland’s new child payment Phil Agulnik https://www.entitledto.co.uk/blog/2019/july/entitledto-welcomes-scotland-s-new-child-payment Last week the Scottish Government announced it would be introducing a new benefit for low income families in Scotland, the Scottish Child Payment. The new payment will be introduced in stages, first, from March 2021 for children under 6 and then expanding to under 16s by the end of 2022. From these dates each eligible child in families receiving a qualifying benefit will receive £10 per week, i.e. there is no cap on the  number of children that can receive the payment in each family. The aim of the new benefit is to reduce levels of child poverty in Scotland. Accordingly, rather than being universal, is it targeted at families living in poverty. After considering several policy options the Scottish Government settled on making the payment a ‘passported’ benefit, where eligibility is deduced from entitlement to other benefits. The new payment is undoubtedly good news and so it seems churlish to quibble about the people who will miss out, who are relatively few in comparison with the estimated 410,000 who will eventually gain. But due to the cliff-edge nature of eligibility for the new payment there will be some families who won’t receive the annual amount of £520 per child due to their earnings being just a few pounds above the eligibility level. Equivalently, they would have qualified for the full amount with a small reduction in their earnings. Reading the policy document it seems unlikely this is an intention of the scheme, especially because it means the group of households who earn just too much to qualify for the new benefit include some who would have qualified but for cuts to welfare. In effect these families will lose twice over. Maybe changes can be made to the Scottish Child Payment in the future to alleviate the issue. Though Social Security Scotland would be wary of changes that slowed down implementation, it seems inevitable that some kind of income test will be introduced after the policy is rolled-out. Once income can be measured it would then be possible to design a ‘tapered’ system to withdraw benefit gradually. Quibbles notwithstanding, we join the welcome party for the new benefit. We have already added signposting of eligibility to the Other Entitlements section of the results page of our calculator (example below) ready for when the scheme opens for claimants next year. Let us know what you think. https://www.entitledto.co.uk/blog/2019/july/entitledto-welcomes-scotland-s-new-child-payment https://www.entitledto.co.uk/blog/2019/july/entitledto-welcomes-scotland-s-new-child-payment Tue, 02 July 2019 18:36:25 How to means-test free TV licences: entitledto's response to BBC consultation entitledto https://www.entitledto.co.uk/blog/2019/june/how-to-means-test-free-tv-licences-entitledtos-response-to-bbc-consultation The following was submitted as a response to the BBC's consultation on licence fees for older people in February 2019. In June 2020 the existing scheme to provide free TV licences for people over 75 will come to end. The BBC are consulting on what sort of help, if any, should replace the scheme. This consultation response does not look at the arguments for and against the various schemes put forward for consultation. Rather it looks at issues around benefit take-up and the problem that any scheme targeted on poorer households misses out those who are not claiming their entitlements. It suggests that, should the BBC choose to go down the route of means-testing, it should do this in the context of an ambition to increase benefit take-up. Means-testing and benefit take-up The BBC-commissioned report from Frontier Economics sets out some of the arguments for means-testing. In particular, it highlights the changing relationship between pensioner and working-age poverty, where the reversal of fortunes over the last 20 years is remarkable. The report comments that “in 1999/2000, approaching half (46%) of households with someone aged 75 or more were amongst the poorest in terms of incomes. By 2016/17, that proportion had fallen to fewer than one in three (32%). This has come about because incomes of over-75 households have grown much more rapidly than average.” Accordingly, it suggests, the balance of argument between universal and targeted support has moved in favour of means-testing since free TV licences were first introduced. In economic terms, the efficiency of targeting is greater now, as poverty among over 75s is less prevalent than was the case 20 years ago. And in financial terms the argument for targeting is stronger, as reduced poverty among over 75s means more would be expected to pay the licence fee now, and hence the additional administrative costs of means-testing are more worthwhile as the extra income generated is larger. However, Frontier’s analysis concedes that one of the major arguments against means-tested schemes is the issue of incomplete benefit take-up. Overall around £20 billion a year goes unclaimed by people in the UK who are entitled to extra help through income-related benefits and tax credits [1]. It’s not a minor problem for any group, but take-up of benefits is worst for low-earning working-age tenants and for pensioners, particularly those with disabilities or who do not get the full rate of basic state pension. For Pension Credit as a whole official estimates suggest four in ten households fail to claim the benefit even though they are entitled, with over 75s slightly less likely to claim than younger households. The result is that, according to DWP estimates, a means-tested TV licence scheme for over 75s could miss out 41% of the people it is intended to help, with 650,000 households who should get a free TV licence (if they claimed their entitlements) mistakenly paying the fee. An opportunity to promote benefit take-up The means-tested scheme outlined in the consultation looks at how the BBC could verify who is eligible for a free TV licence by using data on existing Pension Credit recipients provided by the Department for Work and Pensions (DWP). In this view the BBC’s role is confined to ensuring people who already claim Pension Credit receive their free TV licence entitlement efficiently. The fact that many over 75s who could benefit from the concession will not receive it is unfortunate, but essentially a problem for the DWP not the BBC. The alternative view, which this consultation response aims to promote, is that any move to means-testing free TV licences should be seen as an opportunity to increase benefit take-up by over 75s. Indeed, the one-off and time-limited nature of such a change means that it presents an unrivalled opportunity to increase take-up among this group. Accordingly the BBC should commit to designing a process for determining eligibility for free TV licences with the express purpose of increasing benefit take-up, not only for Pension Credit (and therefore the TV licence) but for other income-related benefits too. Just as there are a number of reasons why benefit take-up is a problem, there are a number of interventions that can be used to increase it. The government’s take-up statistics provide a nice summary of the reasons for partial take-up of benefits: “Take-up may be affected by factors such as the attractiveness of the benefit, lack of awareness of the benefit or application procedure, lack of awareness of entitlement, the perceived stigma of receiving a benefit or other factors”. Equivalently, recent EU guidance suggests a range of potential measures to improve benefits take-up, including proactive use of data to tell people of a potential entitlement, dedicated help for excluded groups and information campaigns [2]. As the BBC is well over a year away from implementing a scheme, it would be possible to pilot different approaches to increasing take-up. In particular, in the run up to the new scheme starting in June 2020 there will be a cohort of TV licence applications from 74 year olds seeking information about what will happen when they turn 75. In effect this group could be treated as a testing ground, with different approaches to see what works in terms of increasing take-up. It is possible that simply telling them that two in five people who could get a free licence do not claim it will be enough to trigger interest in checking eligibility. But if information provision turns out to have little effect – as the barriers to claiming Pension credit are too high (or perceived to be too high) – more radical approaches to increasing take-up may be worth experimenting with, such as: providing form-filling assistance with the application for Pension Credit, either directly by TV licensing staff or through working with partner organisations to provide such help giving a temporary free TV licence to applicants on the basis of their self-declared income, so that they do not need to buy a licence while their Pension Credit application is processed encouraging over 75s applying for a licence to check their eligibility through giving away a number of ‘golden ticket’ free TV licences to users who complete a benefits check. Fortunately there is time before June 2020 to experiment with different approaches and to evaluate what works best. Increase in take-up needed to compensate over 75s The effect of means-testing the scheme will be to take an extra approx. £500 million from over 75s as a group, in the form of additional TV licence fees paid by households who are either ineligible for Pension Credit because of their income or savings (63% of over 75s, 2.73 million households) or eligible and not claiming (15% of over 75s, 0.65 million households) [3]. The argument made here is that, by designing its scheme in a way that helps to increase benefit take-up, the BBC can in effect increase their licence fee income without making over 75s poorer as a group. By increasing take-up the additional income from extra DWP benefits compensates over 75s for the loss from paying more to the BBC. How much would take-up need to increase? The average amount lost by eligible non-recipients of Pension Credit is around £2,500 a year, according to the government’s take-up estimates. To this can be added the benefit of not paying the TV licence, extra help with Council Tax and the Warm Homes Discount that is available to most Pension Credit recipients. Table 1. Average loss for entitled non-recipients Benefit Value of average loss Unclaimed Pension Credit £2,496 (a) TV licence £145.5 (b) Unclaimed Council Tax Support £728 (c) Warm Homes Discount £140 (d) Total loss £ 3,510 (a) Pension Credit tables: PC10   (b)  https://www.tvlicensing.co.uk/faqs/FAQ23 (c) Estimate uses 2009/10 figure for average amount of Council Tax Benefit unclaimed – see Table 7   (d)  https://www.gov.uk/the-warm-home-discount-scheme The overall extra income generated per additional benefit claimant is therefore taken as £3,500 per year in total. This means that, to break-even for over 75s as a group, an extra 140,000 households that are eligible for but not claiming Pension Credit would have to start claiming. This represents getting 1 in 5 of those households who are entitled to Pension Credit but not claiming it to take up their entitlement. In other words, if successful it would mean the proportion of over 75s claiming their entitlement increasing from 59% to 68% of eligible households. As shown by the chart below, while such an increase in take-up is undoubtedly large, it is by no means unprecedented. How to increase take-up As discussed above, any move to make the free TV licence scheme means-tested represents an unprecedented opportunity to increase benefit take-up. The fact that the TV licence would no longer be free should in itself increase the motivation for people to claim their entitlements, but by working with experts in the field, including entitledto, a more substantial campaign to increase take-up could be developed. At a minimum, the move to a means-tested scheme would require substantial communication with over 75s, including explaining to them who is and who is not eligible for a free TV licence. While information and help should not be solely online, the BBC will naturally want to encourage people to access information via cost efficient means, including the internet. The online tools provided by entitledto allow our clients to help their audiences work out their individual entitlements, with a self-service calculator often acting as an entry point for benefit information and applications from an organisation’s website. The introduction of a means-tested scheme would require major revisions to the content at https://www.tvlicensing.co.uk/check-if-you-need-one/for-your-home/aged-74-and-over-aud3 . We believe a key part of the new user journey should be a benefits calculator, so that over 75s applying for the licence can quickly and easily find out if they qualify for Pension Credit and hence be protected from the change. It will, of course, also be important to raise awareness via social media and other communication activity. The recent change in policy for ‘mixed-age’ couples, which in effect creates another deadline for taking up benefit entitlements, could provide a template [4]. Ultimately, whether through supporting take-up campaigns by others, or through promoting take-up directly in the way the scheme is administered, we believe the BBC has a responsibility to aim to increase benefit take-up by over 75s should it choose to adopt a means-tested scheme. Sources: [1] See https://www.entitledto.co.uk/blog/2018/december/over-20-billion-still-unclaimed-in-means-tested-benefits/ for more information and data sources for official take-up estimates. [2] The EU’s study represents the most comprehensive recent survey of measures taken in the UK and internationally to increase benefit take-up. As well as looking at the success of various interventions that have been evaluated, it also reviews the opportunities presented by new technology, such as Open Banking, to automate online benefit claims. See ttps://www.eurofound.europa.eu/sites/default/files/ef_publication/field_ef_document/ef1536en.pdf [3] ONS household population estimates and https://www.gov.uk/government/statistics/income-related-benefits-estimates-of-take-up-financial-year-2016-to-2017 . Note that the figures presented here cannot be read across directly to the Frontier report. As well as ignoring administrations costs and growth in the cost of the TV licence fee, in these estimates households are defined using the ONS definition while the BBC use TV licence fee paying units. These estimates also assume that each household only has one Pension Credit claimant. [4] For more information about the change please see our blog post at https://www.entitledto.co.uk/blog/2019/january/older-mixed-age-couples-need-to-check-their-benefit-entitlement-now/ https://www.entitledto.co.uk/blog/2019/june/how-to-means-test-free-tv-licences-entitledtos-response-to-bbc-consultation https://www.entitledto.co.uk/blog/2019/june/how-to-means-test-free-tv-licences-entitledtos-response-to-bbc-consultation Mon, 10 June 2019 15:28:47 Income banded CTS: scheme details entitledto https://www.entitledto.co.uk/blog/2019/june/income-banded-cts-scheme-details Every year we research and record the range of Council Tax Support/Reduction (CTS) schemes being used by councils across the UK, so that users of our calculators can get accurate and up-to-date information about their entitlement to this benefit. As more and more claimants are moving to Universal Credit many authorities around the country are reviewing their scheme details to make them easier to administer and fairer for their residents. As a result, recent years have seen an increase in income banded schemes being put into place. Income banded schemes for 2019/20 After reviewing the most up to date details available for CTS schemes for all 317 Local Authorities in England we have found that 28 are running income banded schemes for 2019/20. Five of these authorities run their income banded schemes for Universal Credit claimants only. The three main types of income banded scheme The majority of income banded schemes fit into one of three formats. 1. One set of income bands and associated reduction percentages which applies to all claimants. Example Cotswolds . 2. Four different sets of income bands and associated reduction percentages to cover four different household types; Single, Couple, Households with one child, Households with two or more children. Example Rother . 3. Six different sets of income bands and associated reduction percentages to cover six different household types; Single, Couple, Single with one child, Couple with one child, Single with two or more children, Couple with two or more children. Example Somerset West and Taunton . The exceptions There are two main exceptions to the above, Luton and South Cambridgeshire. Luton’s scheme includes disabled people and carers within their household types and makes a distinction between passported and non passported claims ( source ). South Cambridgeshire’s scheme has two household types; Single with or without children and Couple with or without children. However, there are nine sets of income bands and associated reduction percentages for each household type, determined by Council Tax band ( source ). A few other exceptions include: St Albans - although running a scheme with one set of income bands, St Albans uses them to identify the contribution a claimant should make towards their Council Tax liability, rather than identifying a reduction percentage. As such, claimants with the same income will pay the same contribution towards their Council Tax, even if their Council Tax liability differs.  It also only takes net earnings into account. Those without earnings will be placed in the lowest band. Bexley, Luton and Manchester - these authorities stand apart in that their income bands are actually excess income bands, so their schemes retain the concept of applicable amounts. Claimants without excess income will be placed in the lowest band. Other variances For Universal Credit (UC) claimants there are variances in how much of the UC award itself is treated as income. Most Local Authorities are taking the UC award into account in full but some are disregarding an amount determined to be in relation to housing costs. This approach introduces the issue of creating a method in which to determine the amount of a UC award related to housing costs if the claimant isn’t receiving the maximum amount of UC. Other notable variances lie in the treatment of non-dependant deductions and earnings disregards/additional earnings disregards, with many taking a blanket policy approach to these, either removing them completely or setting a flat rate. Some schemes retain policy options common within ‘standard’ schemes such as band caps and capital limits and others have stripped the schemes right back to let the income bands do the work. This blog provides an overview of the types of income banded schemes now in use. You can also watch a video of our webinar , recorded on 18 June 2019 and run in conjunction with the New Policy Institute. Do get in touch if you have any follow on questions about our research. https://www.entitledto.co.uk/blog/2019/june/income-banded-cts-scheme-details https://www.entitledto.co.uk/blog/2019/june/income-banded-cts-scheme-details Mon, 03 June 2019 15:32:55 New entitledto tool launched for benefits advisers entitledto https://www.entitledto.co.uk/blog/2019/march/new-entitledto-tool-launched-for-benefits-advisers Providing benefits advice in the UK is a tough job with constantly changing rules and regulations and increasingly stretched resources. At entitledto we know benefits advisers do an incredible job of helping people to improve their financial situation by providing entitlement advice and we want to help you help more people out of poverty. The poverty statistics do not make for comfortable reading. Millions of people in the UK are  struggling to make ends-meet and it’s likely many  of them are not claiming the benefits they are entitled to (see our Over £20 billion still unclaimed in means tested benefits blog). 13.5 million people in the UK are living in poverty. This includes 7.9 million working age adults, 3.9 million children and 1.9 million pensioners.  1.5 million people are classified as destitute. 650,000 of these have  physical or mental health problems and 365,000 are children.   39% of people in poverty are disabled. 67% are renting. 35% are lone parents. 67% have someone in paid work.   Figures from IncomeMax How can the adviser calculator help to bridge this gap? Our new tool has been created to help professionals easily provide accurate and reliable benefit calculations for their clients. It includes all of the existing features you are used to seeing in the free version of our calculator and introduces several more to help you provide individual advice.  To find out more about the differences between the free calculator and this adviser calculator see this comparison guide . Here are five ways the new tool aims to assist advisers to improve their client’s income: 1. Scenario planning Changes in circumstances such as moving house, having a baby or gaining a new partner can significantly impact a household’s income. Understanding and planning for these changes is easy with the new scenarios option within the adviser calculator.  This premium feature (not found on free calculators) helps advisers to easily model, save and compare unlimited changes of circumstances for clients. See our introduction to scenarios guide for more information on how scenarios can help planning for a change in entitlement. 2.  Highlighting the benefits of being in work    Explaining and calculating work changes can get quite complicated but it's really important that people can understand how changes will impact their finances before making work decisions. The unlimited better off calculation functionality within the adviser calculator can help you guide your clients through the transition from claiming benefits to being in work. Simple graphical comparisons between on-benefit and in-work situations will help clients understand the benefits of moving into work and plan accordingly so that their finances aren't adversely affected. 3. Comparing income under current system and Universal Credit The adviser calculator makes it really easy to understand how people will be impacted by natural and managed migration and what will trigger a move onto Universal Credit. You can switch between entitlements under the current system and Universal Credit to provide timely advice about what a move to UC may mean for each individual you are assisting.  4. Forecasting possible varying Universal Credit payments  People that have varying earnings, can find they have reduced and fluctuating payments under Universal Credit.  By checking payment dates against assessment periods the UC calendar within the adviser calculator clearly illustrates how weekly or 4 weekly earnings (or monthly earners that are paid on a different date each month) could  affect someone’s  UC payments.  5. Helping you stay ahead of the game All adviser calculator clients can stay ahead of the game with free webinars and policy updates specifically written for advisers. This will ensure that you are always up-to-date with the latest rules and regulations and can help reduce the impact of financial hardship and poverty amongst your clients.   Interested in finding out more about the calculator? Find out more and upgrade at  http://entitledto.co.uk/organisations/upgrade https://www.entitledto.co.uk/blog/2019/march/new-entitledto-tool-launched-for-benefits-advisers https://www.entitledto.co.uk/blog/2019/march/new-entitledto-tool-launched-for-benefits-advisers Wed, 27 March 2019 14:32:26 Evidence to the DWP committee on Universal Credit natural migration entitledto https://www.entitledto.co.uk/blog/2019/march/evidence-to-the-dwp-committee-on-universal-credit-natural-migration The following note was submitted to the DWP committee alongside our oral evidence this morning. A link to view the session on parliamentlive.tv can be found at the end of the article.    The evidence to the select committee on 26 th February set out a range of problems experienced by claimants ‘naturally’ migrating onto Universal Credit (UC). This note explores these problems further, showing why it is difficult to identify when claiming UC is in an individual’s best interests and why it is difficult to explain (to claimants or advisers) how natural migration works. It concludes that, unfortunately, complexity is baked into the current way in which UC is being rolled-out. Aligning benefit rates between UC and legacy benefits will help a lot, but in the short term the main way to limit the damage is to reduce the number of people affected by natural migration. Various ways of doing this are explored at the end of this note. It’s useful to divide the various problems presented to the committee into three groups: - First, are problems with the way UC is administered which, it is argued, make it unsuitable for some claimants, particularly if they are vulnerable or have experienced an adverse life event. - Second, are problems for people whose entitlement is lower under UC, who miss out on transitional protection and are treated unfairly relative to if they had been part of ‘managed’ migration. - Third, are problems associated with using natural migration as the mechanism for rolling out UC, where poor understanding of who is affected reflects the fact that it is a very complex way of changing benefit regimes. Administration of UC The administrative problems associated with UC have been recorded extensively in various select committee reports. They include: Delays before the first UC payment is received which can tip people into debt, even if they are ‘only’ waiting 5 weeks. Evidence suggests that rent arrears and other forms of debt are higher (on average) among UC claimants. Monthly earnings for UC are measured over a fixed period that may not match pay dates, resulting in UC payments varying even when earnings don’t. Where a user’s benefit calculation is affected we provide a payment date facility that allows users to see how their UC varies from month-to-month, but it further emphasises the need for some households to be able to budget well under UC. The fact that by putting all payments into one award households are more vulnerable to poor administration, and the fact that housing costs are included in the award makes an income shock more likely to lead to homelessness. It has also been argued that maintaining income if a household splits because of domestic violence is more of an issue in UC than legacy benefits. The need to make a separate claim for Council Tax Support increases complexity and reduces take-up for this benefit. Under the legacy system Local Authorities are able to complete applications for people at the same time as they are applying for Housing Benefit, but under UC there is no contact with the local authority. The extra conditionality that applies to UC claims, particularly where both members of a couple have conditions, increases the ‘cost’ of claiming in terms of the time and psychological-stress of maintaining a claim (filling in job-search journals, etc). These problems are fundamentally about whether UC represents an improvement on the current ‘legacy’ benefits system. They need to be set against an equivalent list of advantages in UC, where it improves on the current way benefits and tax credits are administered. For instance, the fact that support is provided in-work and out-of-work without the need to change benefits is generally agreed to be an improvement. Other advantages claimed for UC, such as preparing claimants for work by making payments monthly and encouraging them to seek extra work if they have low earnings, are subject to greater debate. On an aggregate level the balance between the pros and cons depends on the weight given to each of the issues above. At an individual level the balance of pros and cons depends on their personal circumstances and attitudes – some people may be well suited to the way UC works while, for whatever reason, others are not. However, this does not help in terms of giving advice about whether moving to UC is in a claimant’s best interests, as it means that working out whether they are better or worse off under UC is only part of the puzzle. Even when a claimant’s income is unaffected by UC there are still very strong views among advisers about whether moving on to UC is best advice or not. Winners and losers under UC The second group of issues with UC relates to people who lose out relative to the income they would get under legacy benefits. It should though be noted that from April 2019 (when the level of the work allowance increases) there will be around the same number of winners as losers from UC. Most people who have lower entitlements under UC do so because rates of benefit are different under UC (though changes in benefit rules are also significant for some). These reduced benefit rates affect three main groups: low earning homeowners (where the work allowance is still lower) severely disabled adults disabled children The reduction in the work allowance is where pressure to reduce losses under UC has had most effect. The original reduction in the work allowance came from George Osborne’s July 2015 Budget, though it has been scaled back considerably by the 2018 Budget. The result is that the cut in the work allowance has been reversed for tenants with children or disabilities, but for homeowners who only receive tax credits entitlements under UC are often still much lower. Unlike the reduction in the work allowance, the cut to the severe disability premium has always been built into the structure of UC, as part of its ‘benefits simplification’ objective. In the legacy system there are a number of additions that disabled people can get – a lower and higher premium in Employment and Support Allowance and three disability rates in Housing Benefit. In UC, however, there is just one addition to reflect disability. For many disabled people this means a reduction in their benefit entitlement, losing the enhanced disability and severe disability premiums (worth around £80 a week). The other part of the change to disability premiums is the reduction in the child disability premium. While the higher rate for disabled children under Child Tax Credit and UC is almost identical, the lower premium is £35 a week less under UC. Unlike the issue with the severe disability premium, there is no ‘gateway’ that prevents these cases from going on to UC. There are also large numbers of households whose entitlements are higher under UC. In particular, people working very low hours are often better-off under UC, because rather than a big jump in income at 16, 24 or 30 hours when tax credits kicks-in (and £ for £ benefit withdrawal below 16 hours), under UC the ‘earnings taper’ is gradual. Low earning tenants with children or disabilities are also often better off under UC, particularly from April when the work allowance increases. For a wide variety of reasons (taper rates, non-dependent rules, etc), many other households are also better off under UC. However, the fact that the net effect of UC is now approximately neutral, with winners and losers roughly balancing, is neither here nor there. Averages that look at the aggregate effect of UC do not help in terms of how it is experienced by particular households. In terms of giving advice to claimants, we highlight calculations where there is a significant difference between entitlements under UC and legacy benefits. For losers we also highlight the fact that they could qualify for transitional protection under managed migration. However, it’s not possible to tell the extent to which claimants understand why their income is lower under UC or how managed migration could make a difference. For advisers the issue is simply that it is unfair to cut benefit entitlements for these households. For ‘winners’ we similarly highlight benefit calculations where the user’s entitlements are higher under UC. As the national rollout is now complete, it would in fact be possible for all (2 million plus) households who stand to gain to make a claim for UC. If they all did so they would collectively be over £4 billion a year better off. The fact that, as best we can tell, few households are voluntarily leaving legacy benefits to go on to UC, even when they are better off, again points to the difficulty of using the difference in benefit entitlements as a guide to what their best interests are. The trouble with transitional protection One objection to the fact that many households are worse off under UC is that it is unfair to reduce benefit rates for these groups, particularly as the cuts predominantly affect disabled people. A slightly different kind of objection is that, while it is reasonable to make cuts, it is not fair for some households to get transitional protection while others don’t. It is the distinction between ‘natural’ and ‘managed’ migration that creates this second problem. The fact that transitional protection is afforded to some claimants but not others has been the basis for legal challenges to the policy. In particular, while the courts have rejected the argument that UC discriminates against disabled claimants (judgment on 01/03/2019 by Justice May, which may be subject to appeal), there has been a successful challenge to the postcode effect in natural migration (judgement on 14/06/2018 by Justice Lewis). It appears the legal position is currently that the idea of there being ‘triggers’ that initiate natural migration on to UC is reasonable in so far as they relate to changes in circumstances around work, partnership, etc., but that simply moving house to a new borough is not a sufficient trigger or, at least, does not justify failing to provide transitional protection. Justice Lewis summed up the position in his judgement that DWP had erred when a severely disabled claimant suffered a large fall in income when they ‘naturally’ migrated on to UC due to moving into another borough:  “A change in housing circumstances may provide an explanation as to why it was appropriate to require them at that point to switch to universal credit. It does not explain why they should do so without any apparent consideration of whether any element of transitional protection should be provided in those circumstances in relation to the income related element of universal credit. ” It is highly likely the legality of natural migration will continue to be questioned. The committee heard how CPAG have developed an “early warning system” to help provide test cases on which to mount legal challenges (among other objectives), and there will probably be more legal challenges to the circumstances when transitional protection should be awarded. One response to this would be to extend transitional protection to ‘natural’ as well as ‘managed’ migration. But as the committee’s report on managed migration  concluded, transitional protection is itself very unsatisfactory: Working out the amount of temporary protection due will either be very complex or won’t actually be the difference between the claimant’s entitlement under legacy benefits and under UC. So the idea that ‘no one will lose out’ won’t be true, or will only be true in a way that is far too complicated to explain. As hinted in the name, people who get transitional protection will in time lose it as their circumstances change. This means that households with severely disabled adults or disabled children moved under ‘managed’ migration will get a respite through transitional protection but in time will revert to being losers. It is worth bearing in mind that DWP has a long and unhappy history in failing to migrate households between benefit regimes, even when there has not been an attempt to cut entitlements at the same time. Moreover, in previous migrations that have changed entitlements the majority of the leg work in ‘grandfathering out’ transitional protection has been done by inflation, with main benefit rates catching up with frozen protected rates. Low inflation, without frozen benefit rates, mean that changes of circumstance will continue to be a focus for attention as transitional protection starts to be lost. The conclusion is that selecting people to have their benefits reduced via a change of circumstance, which is how natural migration works for losers, is a very bad way to cut benefits. Most people would see it as unfair, it’s very difficult to understand as it requires a knowledge of the legacy benefit systems as well as Universal Credit, and it has been subject to successful legal challenge. These problems are likely to continue as long as anyone receives transitional protection, which could be a very long time. What DWP can do: align benefit rates Instead of relying on natural migration to slowly distribute a new structure for benefits, it makes more sense to try to separate out the changes to benefit rates that are part of UC from the changes to administration that the policy is also trying to achieve. For the reasons set out above, creating losers while moving people onto a new benefit is a strategy that is not working. Instead of transitional protection DWP should aim to align benefit rates across UC and legacy benefits. One outcome of aligning benefit rates across the two benefit regimes might be to confirm the reduced entitlements for some groups under UC. If so rates could be reduced through one of the tried and tested methods of cutting benefits: - reductions that affect everyone from a given date, such as the bedroom tax, - reductions that affect new claims (or new births) from a given date, such as the two child limit, - ratchet reductions through benefit freezes. At the other end of the spectrum aligning benefit rates might lead to a ‘best of both’ system, with rates in legacy benefits increasing to match those in UC and vice-versa. This would mean the government accepting that the savings built into UC are not in fact achievable and that, in effect, the savings offered up in 2012 were always offered in the expectation that the policy would be reversed before coming to pass. In any event, if savings are to be made they have to be done in one of the ways outlined above: cushioning income falls via transitional protection seems like a good idea, but it is less generous than it sounds and comes at the cost of complexity, unfairness and endless legal challenge. What DWP can do: slow down natural migration Reducing the number of people who are part of the natural migration process would not tackle all the problems above but would reduce the scale of the problem.  In order of their impact on the number of people migrating, options are: Extending the existing gateway in UC that stops people entitled to the severe disability premium from claiming UC to all households with any level of disability, including children with disabilities. As well as reducing the number of people naturally migrating onto UC this would also make the gateway condition far easier to understand and explain. Only migrating ‘winners’ to UC, or giving individuals the choice whether to claim UC or to remain on legacy benefits. Pausing the natural migration roll-out entirely and re-opening applications for ‘legacy’ benefits until people are moved to UC via managed migration. The second two options would eradicate the need for transitional protection, but might also be seen as reducing the roll out to an unacceptable extent. In contrast, extending the gateway to all disabled households would still leave very large numbers migrating onto UC, with all the pros and cons outlined above but with a majority of households being winners (because a large group of the losers are disabled adults and children). An issue would then remain about existing UC claims from households where someone is disabled. Given that we know that transitioning between benefits is by itself a stressful event for claimants, and the point where administrative problems occur, it probably makes more sense to leave them on UC and provide transitional protection for this group. If DWP are capable of devising and administering a transitional protection scheme for these households then it might be worth re-opening the gateway in the future, but there is no need to expand the experiment by migrating over more households with disabilities.   Watch Phil's response on parliamentlive.tv (from 10:28) via the image below. https://www.entitledto.co.uk/blog/2019/march/evidence-to-the-dwp-committee-on-universal-credit-natural-migration https://www.entitledto.co.uk/blog/2019/march/evidence-to-the-dwp-committee-on-universal-credit-natural-migration Wed, 06 March 2019 14:32:26 Band aid for Council Tax Reduction? Phil Agulnik https://www.entitledto.co.uk/blog/2019/january/band-aid-for-council-tax-reduction This article originally appear in the Institute of Revenues Rating and Valuation's Benefits Advisory Service magazine February 2019 issue.  The growth in the number of people on Universal Credit (UC), and greater understanding of its effects, means many local authorities have decided to change their Council Tax Reduction (CTR) scheme this April. The problem: administration costs under UC The most pressing effect of UC on CTR schemes is that it means administration costs become a much more significant burden than was the case under legacy benefits.  The reasons are largely technical, as detailed below, but the result is that local authorities need to ‘delink’ their CTR scheme from UC to keep administration costs down to sensible levels. There are two reasons why CTR administration costs are more significant under UC. The first is that because Housing Benefit and CTR are no longer co-administered, arithmetically it is bound to be the case that administration costs become a higher proportion of the total. In other words, because the value of Council Tax is substantially lower than the cost of rent, fixed administration costs are spread over a lower benefit spend and so rise as a percentage. In effect, an unintended consequences of UC is that it has left help with Council Tax orphaned, no longer able to ‘piggy-back’ on Housing Benefit. The second reason is that, unless a way is found to untie the CTR scheme’s income assessment from UC, costs per claim are likely to be higher for UC cases. The reason is that, where a claimant is receiving UC, income for CTR is determined by UC’s monthly assessment system. However, as has been well documented, UC relies on a monthly earnings period that does not allow for any form of averaging from month-to-month. This often has the effect of creating variations in earnings (as measured for UC/CTR) as an artefact of UC’s measurement period.  For instance, monthly earnings for UC systematically vary for anyone who is paid weekly, owing to the fact that some months have 5 weeks and some have 4 weeks. As there is no averaging provision in UC, this therefore creates automatically-generated variations in reported earnings from month to month for everyone paid weekly, even when their actual earnings are constant. As the issue also affects people who are paid monthly at a date that does not synchronise with UC, such as people who are paid on the last Friday of the month, this problem of artificial earnings variation under UC is far from trivial. There is also an issue with the administration system DWP uses to communicate changes of circumstance. Wolverhampton’s consultation on changes to their scheme made the following comment that neatly sums up the problem: “ If we do nothing, there would be a significant increase in workload from recalculating council tax support every time UC changes…..Every change in income or circumstance of any member of the household triggers a reassessment of council tax support, regardless of whether it leads to a change in entitlement. Any change in entitlement, regardless of how small, triggers a revised council tax bill and potentially resetting of recovery action. ” However, DWP have recognised this issue and claim that the problem of redundant change of circumstance notifications being sent out will be dealt with through an imminent software change. Are income-banded CTR schemes the solution? The key idea behind income-banded CTR schemes is that they create an easier way of administering help for people who are in work. As we have seen, the problem is that UC creates too many occasions where an intervention has to be made to alter the CTR assessment that is either completely irrelevant or too small to be worth administering. To get round this, income-banded schemes replace the benefit withdrawal taper with income bands so that gradual changes in entitlement, as earnings change, are replaced by a series of plateaus and cliff-edges. Variations in earnings that do not cause the claimant to cross an income band can therefore be ignored, hence reducing the cost of administering in-work CTR claims. Clearly income-banded CTR schemes are one way of dealing with the issues created by UC, but there are numerous alternatives. One change that focuses on the problem of there being too many changes of circumstance notifications is to introduce a de minimis rule, as Wolverhampton have done.  This deals with administrative burden of UC through making it easier to ignore notifications from DWP, with local CTR policy making it possible for staff to use common-sense when assessing whether they need to reassess an award. Another way of dealing with the issues created by UC is to change the basis for measuring earnings. Rather than measuring claimant earnings through the information coming from UC, earnings could instead by defined by the CTR scheme itself. This allows administrators to use longstanding mechanisms for averaging earnings, which have been lost under UC, to avoid constant re-adjustments for in-work claimants. More radically, earnings could be measured over a longer period, at the extreme moving to an annual assessment using HMRC definitions for income and earnings. A final way of dealing with the issues created by UC would be to get rid of the earnings taper altogether and just make CTR a passported benefit, like free school meals or the NHS low income scheme. The problem facing CTR schemes under UC is that they are not really big enough to merit a full-blown means-test. As the amount of Council Tax relieved by CTR is generally below £20 a week, the same amount as the value of free school meals for two children, it is not difficult to argue that the benefit is small enough to be passported. In the end the simplest income-banded scheme could just involve a single earnings cut-off set at the same level as free school meals, £7,400 a year in England. Certainly it would be unfair to people just over the cut-off, and would do nothing for work incentives, but it would at least be simple to understand and cheap to run. https://www.entitledto.co.uk/blog/2019/january/band-aid-for-council-tax-reduction https://www.entitledto.co.uk/blog/2019/january/band-aid-for-council-tax-reduction Tue, 29 January 2019 21:34:43 Older mixed age couples need to check their benefit entitlement now entitledto https://www.entitledto.co.uk/blog/2019/january/older-mixed-age-couples-need-to-check-their-benefit-entitlement-now The government’s decision to change the benefit rules for mixed age couples will have massive implications for households where one person is over pension age and one under. Currently couples can claim Pension Credit as long as one partner has reached pension age (65 at the moment, though this is gradually increasing). However, the Welfare Reform Act that introduced Universal Credit changed the age criteria so that couples will only be able to claim Pension Credit when both have reached pension age. This change was not implemented when the Act was passed in 2012 but the government announced yesterday it will introduce the new rule from 15 May 2019. The change means that all couples where one person is over 65 should check their benefit entitlement before 15 May. If they are entitled to Pension Credit and claim it before 15th May they won’t be affected by the change. But if they try to claim after the deadline they will be too late and will have to claim Universal Credit instead. It’s vitally important any couple who can claim Pension Credit claim it now, and we know that 4 in 10 households who qualify fail to make a claim. As well as all of the conditions attached to working-age benefits, the amounts available are very different. For working age couples the level of Universal Credit is £114.85 a week, as it has been for the past few years owing to the benefit freeze. In contrast the level of Pension Credit is £255.25 a week (from April 2019), up from a current £248.80. So for a couple with no other income Pension Credit is worth over £140 a week - £7,280 a year - more than Universal Credit. The key point though is that the effect will last for as long as one of the couple remains under pension age, so if the younger person still has 10 years until they become pension age (i.e. they are now age 56) the total loss would be £72,800. Finally, as well as Pension Credit, qualifying couples who fail to take up Pension Credit before 15th May will become affected by other working age benefit rules. So they could also be made worse off by the bedroom tax, which pension age claims are exempt from, and from changes to help with Council Tax. The example below illustrates the effect for a couple in April 2019 where one is over pension age and receives a full state pension (£168.60 a week), they pay rent of £500 a month (in a two bed flat, one of which is considered spare for working age cases) and Band D Council Tax. As shown, in this case the loss could be £700 a month, or £8,400 a year, and the loss will continue for as many years as there are left until the youngest person reaches pension age.   Working age benefits / month Pension age benefits / month State Pension for older partner £731.47 £731.47 Help with living costs Universal Credit £197.43 Pension Credit £374.62 Help with housing Housing Benefit £500 Help with Council Tax Council Tax Support £92.13 Council Tax Support £114.88 Total per month £1021.03 £1720.97   We think around 50,000 low income couples could gain benefits worth up to £350 million a year. Like most things benefit related it’s never straight forward working out how many people might be impacted by this change but we estimate it could be around 50,000 couples, based on the following two sources. First, the government said on 29 Jan 2019 an estimated 115,000 couples are in receipt of either Pension Credit or pension-age Housing Benefit where one partner has reached state pension age and the other has not [1]. This number is made up of those claiming Pension Credit only (34,000), Housing Benefit only (25,000) and both Pension Credit and Housing Benefit (55,000). Second, the most recent DWP statistics on the take-up of Income-related benefits [2] says that 50% of those eligible for Pension Credit do not claim and 16% of those eligible for Housing Benefit do not claim. There is no figure for those claiming both benefits, but if we use a potential best case of 16% for this group we are able to estimate the following:   Number households claiming [1] Estimated take-up [2] Number households eligible Number households not claiming Pension Credit (PC) 34,000 50%  68,000 34,000 Housing Benefit (HB) 25,000 84% 29,762 4,762 Both PC and HB 55,000 84% 65,476 10,476 Total mixed age couples 115,000     49,238   If 50,000 extra couples were to take-up their entitlement, and they were each around £7,000 a year better off, that would mean an extra £350 million in benefits being paid out this year. And because couples who claim before 15 May are protected, these extra benefits will continue for many years to come. Read the government's announcement on gov.uk .    Sources: [1]  https://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2019-01-24/212389 [2] Central estimates in tables PC3 in Pension Credit: tables and HB1 Housing Benefit: tables https://www.gov.uk/government/statistics/income-related-benefits-estimates-of-take-up-financial-year-2016-to-2017 https://www.entitledto.co.uk/blog/2019/january/older-mixed-age-couples-need-to-check-their-benefit-entitlement-now https://www.entitledto.co.uk/blog/2019/january/older-mixed-age-couples-need-to-check-their-benefit-entitlement-now Tue, 15 January 2019 10:30:47 Over £20 billion still unclaimed in means tested benefits entitledto https://www.entitledto.co.uk/blog/2018/december/over-20-billion-still-unclaimed-in-means-tested-benefits A year ago we crunched the numbers on the amounts of people who are entitled to claim means tested benefits but don’t. Following today’s release of HMRC’s most recent Child Benefit, Child Tax Credit and Working Tax Credit take-up rates 1 alongside the DWP’s recent take-up of income-related benefits 2 we’ve updated the stats. The latest picture allows us to look at the number of entitled non-recipient families and the amount of available expenditure which is unclaimed at the end of the 2016/17 financial year but, be warned, it’s not pretty reading for those of us in the benefit sector who want everyone to be claiming everything they are entitled to. Families in the UK are missing out on £21+ billion a year Comparing these numbers to last year some areas have become a little worse (less people are claiming tax credits) and some a little better (more are claiming Housing Benefit and Pension Credit). We have added Child Benefit to our table this year, as families where one person’s income is over £50,000 are no longer entitled to receive it, making it a means tested benefit. Even after factoring in this change the overall message we can take from these latest statistics is that a similar amount of money remains unclaimed - around £20 billion. Over the next few years we will have to watch what happen as Universal Credit takes the place of many of these benefits. At the moment there are no take-up stats for the new benefit but eventually the government expects that take-up rates in some areas will improve 4 as several of the existing benefits are rolled into one. This doesn’t touch the sides of the current levels of unclaimed assistance, but you can help solve this. Help us encourage everyone to check if they are entitled, now! Millions are still missing out on £1000’s of support that is rightfully theirs and it needn’t be the case. Even for those with no knowledge of the benefits system – and let’s face it the complex rules and regulations are enough to put many off - our free tools help people quickly work out what they may be entitled to . Please share it near and far.   Sources: 1 https://www.gov.uk/government/statistics/child-benefit-child-tax-credit-ctc-and-working-tax-credit-wtc-take-up-rates-2016-to-2017 2 https://www.gov.uk/government/statistics/income-related-benefits-estimates-of-take-up-financial-year-2016-to-2017 3  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/222914/tkup_first_release_0910.pdf 4 https://obr.uk/docs/dlm_uploads/WelfareTrends2018cm9562.pdf https://www.entitledto.co.uk/blog/2018/december/over-20-billion-still-unclaimed-in-means-tested-benefits https://www.entitledto.co.uk/blog/2018/december/over-20-billion-still-unclaimed-in-means-tested-benefits Wed, 12 December 2018 13:11:49 Should parliament pass the managed migration regulations? Phil Agulnik https://www.entitledto.co.uk/blog/2018/november/should-parliament-pass-the-managed-migration-regulations The managed migration regulations released earlier this week put into place a new ‘transitional protection’ system, the mechanism designed to protect households who will be worse off under Universal Credit (UC). The vote on the regulations, however, is likely to be tight. Some Tory rebels are promising to vote against, joining Labour and other opposition parties in arguing that, given all the problems associated with UC, the rollout should be paused. But is pausing UC the worst option of all? The government’s argument is that passing the regulations can only be beneficial as they provide an extra benefit to millions of people. As well those  households that will gain from higher benefit rates under UC,  transitional protection means that those who will lose out get a top-up to maintain the cash value of their benefits. As set out in detail in my blog on UC winners and losers , before the Budget around £5.5 billion was taken from losers (households with lower benefit rates under UC) and an extra £4 billion was given to winning households (those gaining from higher benefit rates under UC). Losing groups include low earners affected by the reduced work allowance, people with a severe disability and disabled children. Winners include people working less than 16 hours a week, people with high childcare costs and low earners aged under 25. The announcement to increase the value of the work allowance in the Budget acts to reduce the problem of low earners losing out (though the allowances were not returned to their previous level for all, see our blog on the Budget ). However, there was no action to help the other two main losing groups, people with a severe disability and disabled children. Unlike the reduction in the work allowance these cuts to disability premiums have always been built into the structure of UC, as part of the original compromise between George Osborne and Ian Duncan-Smith where extra costs for some people were balanced by savings from others. Right from the start, the plan was always that transitional protection would stop people in these losing groups from suffering cash losses. As hinted in the name though, the problem with transitional protection is that it does not last: not only is it unavailable to people who ‘naturally’ migrate onto UC through a change of circumstance, it is also expected that people who get transitional protection will in time lose it as their circumstances change. Indeed, without people leaving transitional protection the government’s numbers do not add up, as there would be reduced savings not only in the short run but in the long run too. Ultimately this means severely disabled people and disabled children will always be losers from UC. Those lucky enough to be moved under managed migration will get a brief respite through transitional protection, but as soon as they experience a change of circumstances they will revert to being losers. So, how does that leave the politics of the forthcoming vote on the managed migration regulations? On the one hand, voting for the regulations to be passed progresses a scheme that will see many winning households become eligible for more help and introduces new protections for losing households. Against this, voting for the regulations endorses a scheme that penalises severely disabled adults and disabled children, albeit with the temporary respite of transitional protection for some. Even if the various delays and re-assurances convince Tory rebels that UC can deliver operationally, and it is worth extending the benefits of UC to winning households who would otherwise remain on legacy benefits, in the current climate convincing them to vote to take thousands of pounds from millions of vulnerable households will be a big ask. I can see two ways out for the government if it looks like they will lose the vote. One direction is to pause the roll-out entirely, including stopping people moving onto UC through natural migration or new claims and re-opening applications for legacy benefits. This means no new UC losers would be created, but such a large U-turn does not seem very likely. More possible, just, is that the government will concede that the cuts affecting severely disabled people and disabled children will be permanently reversed, and benefit rates in UC for these groups brought up to their current levels. In the same way as the cuts to the work allowance were reversed (to some extent), the cuts to disability premiums could similarly be reversed. Given the ongoing legal challenge to these cuts, and the chance the government will lose in court, then it may make sense for them to swallow the pill (and cost for the resulting increased spending) in order to get the regulations passed and accept that creating losers while moving people onto a new benefit is a strategy that was never going to work. https://www.entitledto.co.uk/blog/2018/november/should-parliament-pass-the-managed-migration-regulations https://www.entitledto.co.uk/blog/2018/november/should-parliament-pass-the-managed-migration-regulations Wed, 07 November 2018 10:48:57 Budget Update October 2018 Wendy Alcock https://www.entitledto.co.uk/blog/2018/october/budget-update-october-2018 The Chancellor of the Exchequer made the statement that “Austerity is coming to an end” early on in his budget speech yesterday. In comparison to the Prime Minister’s quote a few weeks ago that “Austerity is over” this was probably a warning we were unlikely to see a wide range of measures being put into place to fix the many problems being reported with Universal Credit. And so when Philip Hammond finally sat down and commended his Budget to the House it wasn’t too much of a surprise the changes in the world of welfare reform were few and far between. So you don’t need to dig through the documents here are the changes announced, with dates and details know at the time of writing.  From April 2019 The biggest announcement was that the Universal Credit work allowance will be increased by £1,000 a year for those with kids or disabilities. Importantly though, for many people this is not enough to cover the value of the cuts made by the then Chancellor George Osborne in the 2015 Budget. Nor are they as high as the allowance under tax credits. If we take a look at the work allowances in April 2015.…   Legacy System Universal Credit   Tax Credits Housing Benefit No rent Inc. rent Single £6,420 £260 £1,330 £1,330 Couple £6,420 £520 £1,330 £1,330 Lone parent £6,420 £1,300 £8,812 £3,159 Couple with children £6,420 £520 £6,429 £2,660 Disabled, single or couple £6,420 £1,040 £7,759 £2,304   And what they will be from April 2019…   Legacy system Universal Credit   Tax Credits Housing Benefit No rent Inc. rent Single £6,420 £260 £0 £0 Couple £6,420 £520 £0 £0 Lone parent £6,420 £1,300 £5,908 £3,376 Couple with children £6,420 £520 £5,908 £3,376 Disabled, single or couple £6,420 £1,040 £5,908 £3,376   We can see, as with most things UC related, there are some winners and some losers. First, the help via Universal Credit...   UC before July 2015 UC after October 2018 Difference   No rent Inc. rent No rent Inc. rent No rent Inc. rent Single £1,330 £1,330 £0 £0 -£1,330 -£1,330 Couple £1,330 £1,330 £0 £0 -£1,330 -£1,330 Lone parent £8,812 £3,159 £5,908 £3,376 -£2,904 £217 Couple with children £6,429 £2,660 £5,908 £3,376 -£521 £716 Disabled, single or couple £7,759 £2,304 £5,908 £3,376 -£1,851 £1,072   And second, the help via the old and new systems...   Legacy system Universal Credit Difference   Tax Credits Housing Benefit No rent Inc. rent No rent Inc. rent Single £6,420 £260 £0 £0 -£6,420 -£260 Couple £6,420 £520 £0 £0 -£6,420 -£520 Lone parent £6,420 £1,300 £5,908 £3,376 -£512 £2,076 Couple with children £6,420 £520 £5,908 £3,376 -£512 £2,856 Disabled, single or couple £6,420 £1,040 £5,908 £3,376 -£512 £2,336   In both tables, the winners – coloured blue – are those with children and/or disabilities if they are renting. While everyone else – coloured in red – continues to get less help both in relation to the existing legacy benefits and the original design of UC. The Chancellor said in his Budget speech this change means 2.4 million households will keep an extra £630 of income each year. But before this change the OBR estimated 2.7 million households were set to lose £2,100 a year on average. So, while an extra £630 for some of these people will help, it is very far from eradicating the problem that UC makes millions of people worse-off. July 2019 (for managed migration) and September 2020 (for natural migration) All self-employed people will get 12 months grace before the Minimum Income Floor rules applies. This help is currently only available to those who have started their business within the last 12 months. This measure, along with a few others that were already known and the two measures below, together make up the package of extra support announced by the Chancellor for people moving over to Universal Credit. This support will total £1 billion over 5 years. The measures that were already known include the change for those receiving SDP who won’t be moved to UC (from January 2019) until they can get transitional protection and Tax Credits claimants with savings over £16,000 who will get transitional protection for 12 months (from July 2019). October 2019 Maximum deductions from the standard allowance of Universal Credit for things such as fines and arrears drops from 40% to 30%. July 2020 Those moving on to Universal Credit from income-related benefits Jobseeker’s Allowance, Employment and Support Allowance and Income Support will receive two weeks extra payment (affecting 1.1 million people). From October 2021 Universal Credit advances can be repaid over a maximum of 16 months (now 12 months). And what does all this mean for the roll out schedule? Interestingly, the Budget’s Red Book still says the managed migration will begin in July 2019, as planned, and will end in December 2023. Whereas the supporting files state that, including a 6 month contingency assumed by the Office for Budget Responsibility, it is now expected to start in January 2020 and end in June 2024. We’re not sure either target will be met but that’s a blog for another day. We hope you found this a useful summary. Where needed, all our tools will be updated to factor in the changes and if we find more detail on any of the announcements we’ll post them on our social media channels, so please do follow us on Twitter , Facebook and LinkedIn .   Sources: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/752202/Budget_2018_red_web.pdf https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/752208/Budget_2018_policy_costings_PDF.pdf https://obr.uk/wtr/welfare-trends-report-january-2018/ https://www.entitledto.co.uk/blog/2018/october/budget-update-october-2018 https://www.entitledto.co.uk/blog/2018/october/budget-update-october-2018 Tue, 30 October 2018 15:31:57 Winners and losers under Universal Credit: a bit more detail Phil Agulnik https://www.entitledto.co.uk/blog/2018/october/winners-and-losers-under-universal-credit-a-bit-more-detail The fact that many households will be worse off under Universal Credit (UC) has seen increasing media attention in the last few weeks. The attention reflects, in part, the Prime Minister’s announcement at Tory Party conference that “ austerity is over ”, creating speculation that something will be announced in next week’s Budget to help those who will be worse off under UC. In addition, new regulations on the next ‘managed migration’ phase of UC will be released soon after the Budget, setting out how some people will be protected (temporarily) from losses. Both events provide an opportunity for the government to think again about the future of UC and, in particular, the wisdom of cutting entitlements while trying to roll out a new benefit. Using figures from a recent Office for Budget Responsibility (OBR) report (1), the overall expenditure saving from UC is relatively modest, a reduction of about £2.5 billion out of total spending of £63 billion a year. The important point though is that the net figure disguises much larger winners and losers. The OBR report suggests there will be about £10 billion of savings from the introduction of UC against £7.5 billion in extra costs. Within these gross cost and savings estimates are £5.5 billion less for ‘losers’, owing to lower benefit rates under UC,  and an extra £4 billion for ‘winning’ households benefitting from higher benefit rates under UC. The remaining £1 billion comes from other changes such as an expected reduction in fraud, limits for the self-employed and higher anticipated take-up of benefits (2). Who are the losers under UC? When we look more closely at the figures we can see that most of the £5.5bn of lower entitlements under UC come from changes that affect three main groups: low earners affected by the reduction in the work allowance under UC severely disabled adults disabled children It is worth discussing each of these in turn. The reduction in the work allowance in UC is a policy hangover from George Osborne’s July 2015 Budget, where a parliamentary revolt meant that he backtracked on equivalent changes due to be made to tax credits. This means that in tax credits people can earn more than £6,000 a year before they start to lose money, whereas the figure in UC is half that for some and zero for many. That U-turn effectively delayed the pain of the cut, as very few people claimed UC at the time. But delaying does not reduce the pain of the cut when its time comes. Cutting benefits through one-off reductions is always far more difficult than a slow ratchet of benefit freezes. And cutting amounts while people are being moved to a new benefit is riven with practical and political difficulties. Moreover, if George Osborne could not implement the cut in 2015 with a working majority in parliament it should not be surprising that the current government, struggling for a majority, would similarly fight-shy of inflicting pain on low earning households. Unlike the reduction in the work allowance, the cut to severe disability premium has always been built into the structure of UC, as part of its ‘benefits simplification’ objective. At the moment there are a number of additions that disabled people can get – a lower and higher premium in Employment and Support Allowance and three rates in Housing Benefit. In UC, however, there is just now one addition to reflect disability. For many disabled people this means a reduction in their benefit entitlement, losing the enhanced disability premium (worth an extra £16.40 a week for single people) and also, for most, the severe disability premium (worth £64.30 a week for single people). Working disabled people may, of course, be impacted by both this and the cuts to the work allowance mentioned above. The other part of the change to disability premiums is the reduction in the child disability premium. Here there is no simplification objective to reduce the number of premiums, and the qualification criteria are identical in Child Tax Credit and UC. The difference occurs in the benefit amounts available. While the higher rate under Tax Credits and UC is almost identical the lower premium is £146.81 per month less under UC. In addition, the OBR forecasts that the self-employed will lose a further £1.3 billion owing to the Minimum Income Floor, the system whereby UC assumes that self-employed people earn the minimum wage even if their business does not support this level of earnings. There are then a further £2.8bn of savings from smaller measures, as set out in Table 1. Table 1: Savings from Universal Credit Gross saving areas £billion Less generous work allowances -2.4 Removal of severe disability child disability premia -2.2 Wider application of capital limits -0.2 Other (including interactions, NDDs, permitted work, etc) -0.8 Gross saving from lower entitlement rates -5.6 Minimum Income Floor for self employed in UC -1.3 Take up falls because of difficulty of claiming UC -0.4 Change in disregards for income changes, principally £2,500 allowance in tax credits -0.9 Reduction in fraud under UC  -expected but no evidence yet -1.5 Gross saving other changes -4.1 Gross savings from Universal Credit -9.7 Source: https://obr.uk/docs/dlm_uploads/WelfareTrends2018cm9562.pdf   Who are the winners under UC? As with the losers, most of the £4bn of higher entitlements under UC come from changes that affect three main groups: people who work less than 16 hours a week   low earning under 25s families with high childcare costs The first group, people working very low hours, are better-off for two reasons. First, they are eligible regardless of hours worked rather than the big jump at 16, 24 or 30 hours when tax credits kicks-in. Second, out-of-work benefits have a £ for £ withdrawal rate below 16 hours, whereas under UC the ‘earnings taper’ is gradual. The second group, under 25s without children but on low earnings, gain under UC for a simple reason – they were excluded from help under Working Tax Credit but are now eligible for support under UC. And the final group, those with high childcare costs, can be better off as UC covers 85% of the costs incurred on childcare, whereas Working Tax Credit only covers 70%. However, as the recent Work and Pensions Committee inquiry into childcare support under UC has highlighted this does not necessarily make the new benefit more appealing to parents, mainly due to the need to pay for childcare fees in advance (3). Table 2: Costs of Universal Credit Gross spending areas £billion Newly entitled, eg under 25 low earners 0.3 Gains to those working less than 16 hours 1.4 Child-limiting support 0.5 More generous childcare support 0.3 Other (including interactions) 1.5 Gross cost from higher entitlement rates 3.9 Take up extra benefits as well as tax credits (outweighs effect of any entitlement rule losses) 2.6 Take up benefits for first time 0.3 Miscellaneous changes not mentioned already 0.5 Gross cost from take-up and other changes 3.4 Gross cost of Universal Credit 7.3 Source: https://obr.uk/docs/dlm_uploads/WelfareTrends2018cm9562.pdf   Work incentives These winners and losers have not been evenly spread during the rollout of UC around the UK. Instead, by design, early recipients of UC were proportionately far more likely to be winners, with high numbers of under 25 year olds who became eligible for in-work support for the first time. This was due to the initial ‘live’ service being limited to simple cases, whereas difficult cases (including all losing groups) were explicitly excluded. The government has used evaluations of the labour market impact of UC from the early part of the roll-out to argue that UC gets more people into work (4). But in terms of evaluating the effect of UC on the labour market when fully rolled-out this is a poor guide. The OBR state: “ Simple cases are unlikely to be representative of the overall caseload: the evaluation compares single, unemployed claims across UC and jobseeker’s allowance. Most cases will have more complex circumstances. The extent to which observed effects on simple cases will be replicated in more complex ones is subject to considerable uncertainty ”(5). Moreover, these evaluations do not take into account the effect of the work allowance cut. As the NAO conclude, the labour market benefits of UC are, at best, not yet proven, and at worst impossible to prove (6). What might happen next? The claim from defenders of UC is that its current problems stem solely from the cuts to the work allowance imposed by George Osborne (7). However, creating millions of losing households was always built-in to UC, as these savings were needed to balance the costs of the policy. The fact that the net effect of UC was approximately neutral in its original design, with winners and losers approximately balancing, is neither here nor there. Creating winners, as occurred in the early stages of roll-out is easy. As the government is learning, the hard bit is implementing cuts. In each losing case the policy position seems unlikely to endure in its current form. In the case of severely disabled adults the policy has already been partially reversed due to a successful legal challenge this summer, and I would not be surprised if the continuing challenge to this case and that of disabled children succeeds in reversing the policy completely (8). There has always been a question about whether the savings from UC would in fact be achievable. As with previous social security reforms there is an extent to which savings have been offered in the expectation that the policy will be reversed before it comes to pass. Whether this applies to UC remains to be seen but my prediction is for various slow and steady changes that will end up eating at least the predicted £2.5 billion of savings, starting during the Budget next week. Sources: (1) https://obr.uk/wtr/welfare-trends-report-january-2018/ (2) Note that this analysis ignores ‘transitional protection’, the process by which claimants moving from legacy benefits to UC are ensured they will be no worse off, as long as their circumstance do not change. As its name implies, this protection is not meant to be a permanent part of the system and the effect of UC is looked at when it is fully rolled out, after transitional protection is no longer relevant. (3) https://www.parliament.uk/business/committees/committees-a-z/commons-select/work-and-pensions-committee/inquiries/parliament-2017/inquiry/ (4) https://assets.publishing.service.gov.uk/government/uploads/system/ uploads/attachment_data/file/714858/understanding-the-impact-of-universal-credit-on-the-labour-market.pdf (5) https://obr.uk/docs/dlm_uploads/WelfareTrends2018cm9562.pdf (6) https://www.nao.org.uk/wp-content/uploads/2018/06/Rolling-out-Universal-Credit.pdf (7) http://welfarereformclub.net/2018/10/16/further-further-delays-to-universal-credit/ (8) http://cpag.org.uk/content/universal-credit-disability-and-transitional-protection https://www.entitledto.co.uk/blog/2018/october/winners-and-losers-under-universal-credit-a-bit-more-detail https://www.entitledto.co.uk/blog/2018/october/winners-and-losers-under-universal-credit-a-bit-more-detail Fri, 26 October 2018 11:30:33 How can entitledto's affordability calculator help your organisation? entitledto https://www.entitledto.co.uk/blog/2017/november/how-can-entitledtos-affordability-calculator-help-your-organisation Not sure on why or how our affordability calculator can help your business? We've listed some of the ways the tool will help you to support your tenants and while doing so protect your rental income. By using the affordability calculator businesses can reduce tenancy failures, encourage tenant retention, improve tenant satisfaction and maximise rental income.  "entitledto were able to build on the concept and design, to create a system which is easy to use, functional and useful."   - Ellen Salkeld, Viridian Housing Developed in partnership with  Optivo  the calculator includes many features designed to help organisations, carry out accurate, independent and reliable calculations, including: New UX design  The affordability calculator has been designed with UX in mind to help users navigate through complicated calculations in the simplest way possible. Responsiveness It's responsive in UX sense but also in relation to the content. Pages appear if they are relevant to the user but we don't ask them if they don't apply. User journey From the responsive intelligent questioning to in-built look-up facilities such as Council Tax bands, we try to help users complete the calculation as quickly as possible. Trigger figures These allow us to simplify the journey and provide tailored support. For example, we input standard amounts for fixed costs for things like a TV licence. We can also set expected amounts for expenditure so that you can provide personal budgeting support where tenants have an under (or over) spend.  Income maximisation and welfare reform See if tenants have any unclaimed benefits and ensure tenancies are sustainable in the long-term as welfare reform changes take effect. Highly configurable The text, emails and affordability criteria are customisable to your requirements. We have a number of housing associations (large and small) using the affordability calculator with various affordability schemes. Powerful management information The tool comes with an in-built administration area so you can manage applications, look at trends and ensure you protect your rental income.  Additional key features: Streamline your tenancy applications Create sustainable tenancies Evidence tenancy support Accessible & easy Intuitive to use Time saving Get access to the affordability calculator completely free for 30 days.  Contact us to find out how. https://www.entitledto.co.uk/blog/2017/november/how-can-entitledtos-affordability-calculator-help-your-organisation https://www.entitledto.co.uk/blog/2017/november/how-can-entitledtos-affordability-calculator-help-your-organisation Fri, 24 November 2017 10:26:33 Budget Update November 2017 Wendy Alcock https://www.entitledto.co.uk/blog/2017/november/budget-update-november-2017 Don’t worry, benefits fans, we’ve ploughed through the announcements about benefits in yesterday’s budget so you don’t have to. Here’s a summary of the details behind the headlines: (UPDATES have been added below with additional information announced by the Secretary on 23 Novembe r). Removal of Universal Credit seven day waiting period   From February 2018 the government will remove the seven-day waiting period so that entitlement to Universal Credit will start on the first day of application.   The current seven-day wait has been in place since Osborne changed it from three days in the Summer of 2013. Advance payments available within five days From January 2018 anyone who is entitled to Universal Credit will be able to access up to a month’s worth of their estimated Universal Credit within five days via an interest-free advance. Until yesterday’s announcement, the maximum advance was for half of the estimated Universal Credit payment.  The government will also extend the amount of time the advance can be repaid from six months to twelve months if people need a little longer to pay back their loan. As it doesn’t kick in until the new year anyone making a new claim in December will be able to receive an advance of 50% of their monthly entitlement at the beginning of their claim and a second advance to take it up to 100% in the new year, before their first payment date. Some claimants have already been able to repay over 12 months (if they are transferring from another benefit to Universal Credit) or in exceptional circumstances ask for a delay in repayments for up to three months but these changes will even out the process for all claimants.   UPDATE - From Spring 2018 it will be possible for people to apply for an advance online. Delay in the rollout schedule   Unsurprisingly this one didn’t make it into the Chancellor’s speech but the red book explains there will be a more gradual rollout of Universal Credit between February 2018 and April 2018 and it will be complete in all job centres by December 2018 instead of the planned end of September 2018.  UPDATE - A revised transition schedule has been published which shows a reduction in jobcentres being rolled out for three months from February 2018 to 10 jobcentres a month (was 50), so you can check if your jobcentre date has moved. However, please do note, this does not always mean all postcodes in a JCP area are due to roll out at the same time.  The schedules are sometimes superseded by commencement orders so these are the best place to check for the latest dates. Taper rate unchanged but further reductions not ruled out There were no changes to the taper rate this time around, so it remains at the rate of 63p introduced in the Autumn Statement last year. However, the government did say yesterday that the taper rate will be kept under review and they will continue to consider the case for further changes, so watch this space! Two weeks extra payment for housing benefit recipients From April 2018 those already on Housing Benefit will continue to receive their award for the first two weeks of their Universal Credit claim. This will hopefully make it easier for anyone migrating over to Universal Credit to pay their rent during the now five-week wait and help to limit rent arrears. UPDATE - The government has added the two weeks extra rent will be an unrecoverable automatic payment that will be available to 2.3 million people. The advance is intended to be additional support and will not reduce what people are entitled to under Universal Credit.  Some Local Housing Allowance rates to be increased To support Housing Benefit and Universal Credit claimants living in areas where private rents have been rising fastest, the government will increase some Local Housing Allowance rates. Details have not yet been released on which areas this will apply to but they say it will increase the housing benefit awards of approximately 140,000 claimants in 2018-19, by an average of £280, in areas where affordability pressures are greatest. This goes alongside the LHA change we already knew about; that it won’t be introduced to the social rented sector, a measure that was previously scheduled to start in April 2019. Easier to make rent payments direct to landlords Another one with more details to come but they announced it will be easier for claimants to have the housing element of their award paid directly to their landlord. A good move for people (or landlords) worried about getting behind with their rent.  UPDATE - Next month, new guidance will be issued to ensure that claimants in the private rented sector who have their housing benefit paid directly to landlords are offered that option when they join Universal Credit.   UPDATE - Three child families remain on legacy benefits until Feb 2019 Currently, any new claim for Universal Credit from a family with three or more children was being routed back to tax credits until November 2018. With the extension to the roll-out plan that will now shift to the end of January 2019. UPDATE – Live service claims to stop at the end of December 2017 Currently, no matter where they live, most single unemployed people without children making a new benefit claim are asked to claim Universal Credit instead of legacy benefits. This will stop happening on 31 December 2017 as the live service is being closed to new claims. This means that, during 2018, until an area becomes full service, single unemployed people without children will be reverted back to legacy benefits. Existing live service claimants will not be affected until their area moves to full service.   We hope you found this a useful summary. Where needed, all our tools will be updated to factor in the changes and if we find more detail on any of the announcements we’ll post them on our social media channels, so please do follow us on Twitter , Facebook and LinkedIn . Sources: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/661480/autumn_budget_2017_web.pdf https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/661428/Autumn_Budget_Policy_costings_document_web.pdf https://hansard.parliament.uk/commons/2017-11-23/debates/36ef5fee-7fb1-4841-a242-7625ed73fca0/universalcredit https://www.gov.uk/guidance/claiming-benefits-for-2-or-more-children https://www.entitledto.co.uk/blog/2017/november/budget-update-november-2017 https://www.entitledto.co.uk/blog/2017/november/budget-update-november-2017 Thu, 23 November 2017 10:07:47 Our top 5 online resources for organisations that help people in financial need entitledto https://www.entitledto.co.uk/blog/2017/november/our-top-5-online-resources-for-organisations-that-help-people-in-financial-need We are relied upon by Local Government, Housing Associations and Charities to help people in their communities maximise their entitlements and see how they are affected by welfare reform, which is why we've put together a list of our top 5 tools that we believe every organisation may need when it comes to calculating these entitlements. 1) Affordability calculator The affordability calculator is transforming the way that housing providers manage their allocations. By investing in the affordability calculator you can streamline your processes while ensuring that your tenancies are sustainable both at the time housing applicants apply and also as various welfare reforms come into force.  Key features and unique benefits: Highly configurable to your branding and style Highly configurable to your affordability criteria Assess vulnerability as part of your pre-tenancy assessment Trigger figures and standard amounts of functionality for quick and accurate calculations Identifies unclaimed benefits for income maximisation Ensures tenancies are sustainable as welfare reforms take place 2) Budgeting tool Why is the budgeting tool in the top 5? Well, just like many of our other tools, the budgeting tool is important for your organisation as it allows you to help people budget more effectively, which is becoming more and more essential for housing associations, local authorities and advice organisations. Direct monthly payments under Universal Credit represent a significant new risk for both landlords and tenants. The budgeting tool is a cost-effective solution that promotes good financial management.  Key features and unique benefits: A comprehensive budgeting form with entries all on one page Highly configurable budget and results Trigger figures and standard amounts for quick & accurate budgeting Create multiple budgets, save and retrieve results in minutes 3) Better off calculator The better off calculator is an online solution designed for advisers helping clients into work. With both advisers and self-serve views, the better off calculator can significantly improve the performance of your advisers at a low incremental cost.  Key features and unique benefits: Simple graphical comparisons between on-benefit and in-work situations  Responsive UX design of new self-serve interface Advisers and clients can carry out quick and accurate benefits calculations Help benefit claimants understand the consequences of moving into workSeamless integration with your CRM system 4) Adviser Just like many of our other tools, adviser is just as important as it is a calculator designed for professionals so that they can provide accurate, independent & authoritative calculations. It has been designed for advisers to complete calculations in the quickest way possible. Like all entitledto products, it is responsive and dynamic and only asks questions that are relevant to the particular calculation being carried out. Key features and unique benefits: Advisers without subject matter expertise can provide quick, accurate and reliable calculations Detailed breakdown of the calculations underlying estimates, including numbers 'what ifs' Detailed help information to help professionals complete calculations Use adviser to manage user accounts and configure help pages to your requirements 5) Public benefits calculator The public benefits calculator calculates entitlements for all welfare reforms including Universal Credit. The new UX design of the public benefits calculator ensures users have the best possible experience whether they are accessing the calculator from a mobile, tablet or desktop. Key features and unique benefits: Labelled to your organisational branding Includes full functionality and enhanced features Highly configurable with a sophisticated administration interface Always up-to-date with the latest rules and legislation If you would like a free demonstration of our tools, please get in touch. Contact us https://www.entitledto.co.uk/blog/2017/november/our-top-5-online-resources-for-organisations-that-help-people-in-financial-need https://www.entitledto.co.uk/blog/2017/november/our-top-5-online-resources-for-organisations-that-help-people-in-financial-need Tue, 14 November 2017 19:01:17 What is Universal Credit? entitledto https://www.entitledto.co.uk/blog/2017/october/what-is-universal-credit Universal Credit is the new benefit for working-age people by merging all six benefits into one single payment and was designed to make claiming benefits easier. Over a number of years the following benefits and tax credits will be abolished as Universal Credit replaces them: Income support Income-based jobseeker's allowance Income-related employment and support allowance Housing benefit Child tax credit Working tax credit How does Universal Credit work? Whether claimants are in or out of work they can still claim Universal Credit. The amount of credit claimants can receive depends entirely depends on their circumstances and how much other income they are getting. If a claimant has low earnings and is still in work, they are eligible to receive Universal Credit.  Find out how Universal Credit is calculated . Universal Credit is also different because it is administered by one benefit department; the DWP, whereas other benefits are paid by a range of different departments. Most people claim Universal Credit online. For information, visit our help guide to online claims. Who can claim Universal Credit? Universal Credit is payable to individuals between the ages of 18 and Pension Credit qualifying age. Is is available to people who are out of work, including those looking for work and people who are out of work due to illness, disability or childcare commitments and to those caring for disabled people or those in work and on low incomes. The government is slowly rolling out Universal Credit in stages. For more information on where Universal Credit is currently available and who can claim, visit our Universal Credit roll out  guide. Will claimants still need to look for work? Receipt of Universal Credit is dependent on claimants signing a commitment and being placed into a group that determines what you have to do in order to continue receiving the benefit.   For information on which group your claimant would be placed in, please visit our Claimant Commitment page.   If you’re interested in learning about our new benefits calculator that covers all means-tested and contribution based benefits, including Council Tax and Universal Credit, visit our benefits calculator page. https://www.entitledto.co.uk/blog/2017/october/what-is-universal-credit https://www.entitledto.co.uk/blog/2017/october/what-is-universal-credit Thu, 12 October 2017 14:35:04 Download our new product brochure entitledto https://www.entitledto.co.uk/blog/2017/october/download-our-new-product-brochure Did you know, as part of entitledto’s services we are relied upon by the Local Government, Housing Associations and Charities to help people in their communities maximise their entitlements and see how they are affected by welfare reform? On top of this, we also cover all means-tested benefits and our products are updated for new legislation, including Universal Credit. As part of our business it’s within our best interest to help organisations support people who are in financial need and as always, we do our best to deliver your services in the most cost-effective way. That’s why we recently designed our new brochure to keep our services current and offer services that can hopefully meet your needs…  and if you haven't read it yet, well you’re in for a treat! Before we send you off to download the new brochure, here are a few things to note:   Our products are used by companies such as Optivo, Wandle, Age UK, Money Saving Expert and so much more! In fact, we work with over 190 companies across the UK. We offer online solutions that will drive digital efficiencies in your organisation Over 71% of users are accessing the calculators from mobile or tablet We don’t like to waste time...  You’ll be set up with our product(s) in less than 4 weeks, and you’re not tied into any contract!   Our professional tools include:   Benefits calculator Claim form Affordability calculator Budgeting tool Adviser Better off calculator Council Tax Support calculator ...and much, much more!   Download product brochure https://www.entitledto.co.uk/blog/2017/october/download-our-new-product-brochure https://www.entitledto.co.uk/blog/2017/october/download-our-new-product-brochure Thu, 05 October 2017 15:09:56 Over £20 billion remains unclaimed in means tested benefits entitledto https://www.entitledto.co.uk/blog/2017/september/over-20-billion-remains-unclaimed-in-means-tested-benefits As several of us at entitledto are numbers nerds we always like to look at new government stats about benefits. In an ideal world everyone would claim everything they are entitled to – after all that’s what our company is named after – but in reality, there are millions of people who could claim but don’t. Today’s official statistics on income-related benefits from the DWP show the latest picture. Its annually updated data was released this morning and it’s bound to make worrying reading for benefits advisors around the UK. We’ve done some number crunching and the figures paint a picture of a country where some of our poorest families are not getting the help they are due – to the tune of over £20 billion a year. Help us encourage everyone to check if they are entitled, now! These figures show millions are missing out on £1000’s of support that is rightfully theirs and it needn’t be the case. Even for those with no knowledge of the benefits system – and let’s face it the complex rules and regulations are enough to put many off - our free tools help people quickly work out what they may be entitled to. Encourage your users to carry out a quick benefit check today and they could soon have a boost in income – especially if Universal Credit is about to roll out in their area. But don’t get me started on Universal Credit today (aside from the fact there are very limited stats available about it at the moment) that’s a blog for another day! Amounts of unclaimed means tested benefits How we worked it out Using the key data from today’s report about non-takeup of the main income-related benefits we have added the most recent data about tax credits takeup along with an estimation about current takeup of Council Tax Support (CTS). The CTS estimations are based on the last available take-up statistics for support to pay Council Tax from the financial year 2019/10 . We used the mid-point of the total amount of Council Tax Benefit unclaimed of between £1.70 billion and £2.42 billion. Using the Bank of England Inflation Calculator we then scaled this value to 2016 prices. Sources:  https://www.gov.uk/government/statistics/income-related-benefits-estimates-of-take-up-financial-year-201516 https://www.gov.uk/government/statistics/child-benefit-child-tax-credit-ctc-and-working-tax-credit-wtc-take-up-rates-2014-to-2015 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/222914/tkup_first_release_0910.pdf https://www.entitledto.co.uk/blog/2017/september/over-20-billion-remains-unclaimed-in-means-tested-benefits https://www.entitledto.co.uk/blog/2017/september/over-20-billion-remains-unclaimed-in-means-tested-benefits Thu, 14 September 2017 14:57:05 Encourage tax credit take-up now entitledto https://www.entitledto.co.uk/blog/2016/encourage-tax-credit-take-up-now In the February edition of Benefit magazine I discussed the effect of the cut in the Universal Credit (UC) ‘work allowance’ on incentives to enter work, compared to the original incentive structure 
of the benefit, and the effect of the cut on the comparison between UC and tax credits. In terms of incentives, the effect of the cut
 is that the amount of in-work support for low earners under UC will now be significantly lower than it would otherwise have been
– there is a smaller ‘top-up’ for people on
low pay. This is the policy intention, and the introduction of the higher ‘living wage’ is meant to compensate. However, until the living wage rises significantly more, better-off-in-work calculations for UC now show smaller gains than under the benefit’s original structure. The effect of the cut in the work allowance on the comparison with tax credits is more important in terms of its implications for local authorities. As discussed in February, the cut to the work allowance, combined with
the reprieve for tax credits announced in the Autumn Statement, means that for low earners who are eligible the amount of help received through Working Tax Credit is higher than 
UC. The table below uses a low earning lone parent as an example of how large the effect can be in some cases. Another way of looking at the effect of the cut is where it leaves the overall picture of whether people are better or worse off under UC. When UC was introduced, the government estimated that there would be roughly 
equal numbers of winners and losers from 
its introduction. However, according to the Institute for Fiscal Studies1, the work allowance cut means that more than a million extra people will be worse off under UC, compared to those who gain. Well over 40% of people will now lose out under UC, relative to their current benefit entitlement. The fact that low income workers are generally better off claiming tax credits than UC should in any case provide a powerful reason for local authorities promoting tax credit take-up. But it has particularly important implications for those councils that are part of the roll-out out of the UC ‘digital service’, the new computer system for delivering UC piloted in Sutton and now being rolled out nationally. Unlike the previous extension of 
UC to clearly identified groups (in most areas single, unemployed people making a new benefit claim), the digital service means all new claims and changes of circumstance must be made to UC. This means that once the digital service is rolled out in your area, your working age residents will no longer be able
 to apply for tax credits. It is therefore essential that residents are encouraged to make new claims to tax credits now before it is too late. Nationally, around one million people entitled to Working Tax Credit do not claim it and on average they lose £1,600 per year2. If everyone who is entitled were to receive that £1,600 average award, the effect would be an extra £1.5 billion per year coming into the economy. As well as increasing their income now, people on tax credits could also preserve those higher incomes for years to come, even after moving on to UC. This is because of transitional protection, the government’s commitment that “no-one will be worse off under UC” , which applies as long as claimants don’t have a significant change of circumstance. Transitional protection could amount to more than £300 a month in some cases and this protection could last many years. It is not just individual residents who
stand to gain from applying for tax credits now. For councils, the introduction of local council tax reduction (CTR) schemes gives
a vested interest in ensuring the highest possible incomes for the greatest number
of your residents. As any increased income for individuals means lower CTR, so the imperative for increasing take up of tax credits is great. As we have already seen, tax credit awards can be substantial, which means significantly lower expenditure on CTR. And with transitional protection in place, this lower expenditure could remain for a substantial period once they are migrated on to UC.   The content in this blog was published in the June 2016 edition of Benefit magazine. https://www.entitledto.co.uk/blog/2016/encourage-tax-credit-take-up-now https://www.entitledto.co.uk/blog/2016/encourage-tax-credit-take-up-now Wed, 01 June 2016 16:18:51 Tax credits saved! For now entitledto https://www.entitledto.co.uk/blog/2015/november/25/tax-credits-saved-for-now Chancellor announces short term reprieve but cuts will bite in the end “Tax credit cuts reversed!” That’s the headline we’ll be seeing across tomorrow’s newspapers and on the news tonight. In the face of public uproar, and unexpectedly good Government revenues, George Osborne has been able to throw out his incredibly unpopular tax credits policy and protect the incomes of those in low paid or low hours work. But is this the full extent of the story? At the start of his Autumn Statement, Osborne said that “the £12 billion of welfare savings we committed to at the election, will be delivered in full”. How can this be true if the cuts to tax credits have been reversed? To understand how these savings are made, we need to look at the figures more closely. The £12 billion annual saving is due to be made by the year 2020. Even with the tax credit cuts in full force, the Government “only” planned to save £5 billion from welfare benefits next year. By scrapping the harshest measures in those cuts, the Chancellor is cutting that saving back to £2 billion. This is a genuine and significant reversal of policy in the short term. As we look further ahead though, the reversal of that policy becomes less significant to the overall spending levels. By 2020 the policies announced today cut the welfare bill by even more than those announced in the summer. There have been a few small changes to the benefits system. Some will have major impacts on selected individuals and families (we’ll talk about those in a moment) but they don’t get close to the amount of savings that the tax credits cuts would have made. The reason? Universal credit. Universal credit is as big a cut as tax credits would have been Tax credits are a significant addition to the incomes of people with children and/or in low paid work. Universal credit is replacing tax credits (along with housing benefit and working age out-of-work benefits) over the next few years and is due to be fully rolled out by 2021. Tax credits have, in effect, already been abolished. The important thing to note here is that universal credit is far less generous to workers, especially full time workers, than tax credits are. Without having to cut tax credits, the Government is expecting to save £2.5 billion as people move off them onto universal credit. It’s a varied system and many people will not lose out as they move onto universal credit, but many workers will. In a comparison with tax credits, Universal credit will leave many people as badly off, or worse, than they would have been if these cuts had not been scrapped ( I wrote about this previously ). In effect, the cuts are just being phased in over time, not abandoned. Changes to housing benefit and pension credit There are other changes though that it is important to mention. Around about £1 billion extra savings are going to be found through smaller cuts announced today. Many of these are administrative changes but a few significantly reduce the incomes of those affected. Perhaps most immediate is the change to the maximum housing benefit for those in the social sector. At the moment this is fixed at the amount of the rent, unless it is unreasonably high or the tenant has one or more spare bedrooms. From April 2018, this maximum rent will instead be fixed for people who start new tenancies after April 2016 at the local housing allowance rate – a figure based on local private market rents. Now, this is not going to affect the majority of social housing which is well below the market rent. The most important group affected are single people aged under 35 who have no children. Up until now they would have been entitled to a one bedroom flat. Instead, their housing benefit will now be limited to the rate for a room in a shared property, no matter what property they are actually living in. As an example, where I live in Birmingham the maximum housing benefit on a one bedroom flat is £98.87 a week. For a shared property it is £57.34 a week. This is a significant drop and will put social housing out of the reach of many young single people. While in general pensioners are protected from welfare cuts, an exception has been made in the past for pensioners receiving the savings credit element of pension credit – the extra top-up that that goes to pensioners with small savings or private pension income. The Autumn Statement performs the same trick, and pensioners receiving the savings credit element of pension credit will lose out. The government’s long term aim is to phase out this help altogether, as the new flat-rate basic pension grows, so the savings credit has been squeezed repeatedly. In effect this cut claws-back 40% of the increase in the basic pension for affected groups. So for pensioners receiving savings credit – about 1.5 million households – the £3.35 increase in the basic pension will become a £2 increase once the reduction in other benefits is taken into account. A further change that directly affects the amount of benefit people can claim relates to the amount of time people can be abroad and still remain entitled to housing benefit or pension credit. Currently, claimants can be absent from their home for up to 13 weeks for any reason without it affecting their claim. From April 2016, if the reason for absence is that the claimant has gone overseas that time will be limited to 4 weeks. This brings these rules partially in line with universal credit which has a one month time limit for absence of any reason. So, today’s budget offers a short term reprieve for people on tax credits. Over the next four years though, we will see similar cuts being applied through Universal Credit. There will be more tinkering and small changes along the way, but significant cuts will be coming over the next few years regardless of announcements today. If you think you may be affected, look at entitledto’s benefit calculators to see what Universal Credit might mean for you and what protection you might receive. This guest blog was written by Dan Rust a freelance consultant and trainer from Turquoise Training . https://www.entitledto.co.uk/blog/2015/november/25/tax-credits-saved-for-now https://www.entitledto.co.uk/blog/2015/november/25/tax-credits-saved-for-now Wed, 25 November 2015 14:39:56 Universal Credit - we're not sure where but we might know when entitledto https://www.entitledto.co.uk/blog/2014/december/02/universal-credit-were-not-sure-where-but-we-might-know-when Universal Credit has a basic premise, to be a benefit which helps unemployed to become employed and to support the under-employed to become full time employed. To do this the benefit is paid monthly like a wage, it includes help for housing costs as a wage would. Further it is administered by one department, the DWP, who will have limited communication with other agencies such as social landlords. In other words it gives the claimant a lump sum once a month to manage themselves. Under current practices, housing benefit departments have exceptional relationships with social landlords all over the country. There is an enormous amount of data sharing and cooperative working to help vulnerable claimants receive their correct housing benefit awards and prevent homelessness. It appears that until recently the DWP had no idea about the extent of this data sharing. The danger in writing an article about the timetable for Universal Credit (UC) is that by the time it is published it will almost certainly be out of date. So it is important to start by acknowledging that any forecast for the rollout schedule is, at best, an educated guess, and that the timetable will doubtless change again. Nevertheless, I’m going to indulge in a bit of futurology and put in my tuppence worth as to the key dates for bringing in the new benefit. My starting point is Iain Duncan-Smith’s (IDS) ministerial statement of 13th October 2014, in which he announced that expansion of UC “will progress from February 2015 to all remaining jobcentres and local authorities for new single claimants previously eligible for Jobseeker’s Allowance, including those with existing housing benefit and tax credit claims”. Further, the announcement also appears to set an end date to this stage of the rollout, talking about, “national expansion through 2015/16 and secure delivery of Universal Credit across Great Britain”. Assuming that Hansard uses standard notation for financial years, this means UC will be available in all GB jobcentres by April 2016. For the UC programme, this is about as close as it gets to a clear timetable.  The statement also seems fairly clear that, outside of the north west and the six other existing pilot jobcentre areas, UC will only be available to single jobseekers. It is worth appreciating how unrepresentative this target group is. Experience from the pilots gives a good guide to the kind of people likely to claim, as until July this year UC was only available to this group. The latest statistics (for September 2014) show that, of the 16,590 people that had started a UC claim, 68% were male and, more importantly, 62% were under age 25. So relative to average benefit claimants, they have lower entitlements, are more likely to be active in the labour market and are less likely to have housing costs. Most importantly, childless people under 25 are one of the key gainers from the introduction of UC, as they now qualify for in-work support, whereas they do not currently qualify for working tax credit. It should therefore be unsurprising that incentives to work are improved, with Department for Work and Pensions (DWP) analysis finding that 60% of UC claimants would have left Jobseeker’s Allowance after 90 days, compared with 54% of Jobseeker’s Allowance claimants who leave benefit after 90 days. The UC programme acknowledges that national rollout to single jobseekers will still leave them far short of their goal of replacing the six ‘legacy’ benefits (Jobseeker’s Allowance, employment support allowance, income support, child and working tax credits and housing benefit). But given the speed of accumulation of new claimants in the first eighteen months of the rollout, which averaged something like a thousand a month, it will feel like an acceleration. The current inflow rate of new UC claimants is around 3,500 people per month, so scaling up to national rollout might mean over 50,000 starts a month across GB. And in terms of jobcentres affected, rather than rolling out 50 new UC jobcentres over three months, the speed of the autumn 2014 phase of the rollout, DWP will need to put 50 live a month. According to the ‘Universal Credit at work’ publication, released on 22nd.October 2014, the current ‘planning assumption’ is that there will be roughly half a million households on UC by May 2016. This phase of the rollout therefore stands a decent chance of reaching its objective of national coverage. But even if it reaches this point on time (by assumption, April 2016) the rollout will be less than one tenth complete, as the government estimates that 7.7 million households (containing roughly 12 million individuals) are expected to receive UC when it is fully rolled out. So what about the timetable for the remaining people affected by UC? There are two distinct groups to consider – people who flow on to UC due to a change of circumstances (‘natural migration’) and people who move on to UC through an administrative process imposed on them (‘managed migration’).  In his ministerial statement, IDS announced there would be “expansion to all claimant groups from 2016”. So assuming all goes well in the existing pilot areas, where new claimant groups are already being brought into the scheme, eligibility will be extended from April 2016 in other areas. Given the UC programme’s understandable bias towards groups who are likely to do best from the new benefit (relative to existing benefits), rollout might be expected to progress to, in order, couples, families, owner occupiers, in-work tax credit claimants and finally disabled people. Increasingly, this will mean extending eligibility for UC to groups where there are more people who will lose (relative to current entitlement rules), such as people who would currently receive a severe disability premium. It will also mean far more people on UC with substantial housing costs to budget for. Notwithstanding these factors, ‘Universal Credit at work’ states that ‘legacy benefits [will] close to new claims from 2016, beginning with Jobseeker’s Allowance claims from singles’, with the end date for closing legacy benefits to new claimants set as ‘before the end of 2017’. My guess is that this will mean another three million households will be on UC by the end of 2017, bringing the total to around half the 7.7 million households eventually expected to be on the benefit. That leaves the timetable for ‘managed migration’ – how to deal with the stock of people who have not flowed onto UC naturally. One approach to this group is simply to ignore them and wait for everyone to flow on to UC through changes of circumstance. Certainly this has attractions, and ‘Universal Credit at work’ discusses these extensively. But waiting for natural migration to gradually work its way through the stock of claimants could be a very long process, in particular because a large proportion of the remaining people will have a lower entitlement under UC. While transitional protection means there will not be a fall in cash incomes for affected people, there is still an incentive to delay moving over to the last possible date to get one last annual uprating – even if benefits only increase by 1%. If transitional protection lasts ten years, that could be equivalent to a 10% rise. So relying on natural migration alone does not seem very realistic. To be effective, therefore, the managed migration process must have an end date. Moreover, without an end date legacy benefit, systems cannot be closed to existing as well as new claims. So what end date to choose? When first announced, the idea was that managed migration would take three and a half years, starting in April 2014 and ending in October 2017 and run alongside natural migration. However, three and a half years may be pessimistic, given that the natural migration period will have started earlier and lasted longer than originally envisaged, hence numbers will be smaller. So my final guess is that people will be moved on to UC (via managed migration) from early 2018, with the whole process ending in October 2020. That end date puts the programme three years behind schedule, which feels about right. More importantly, this end date would mean narrowly avoiding the ten year anniversary of the publication of the original White Paper ‘Universal Credit: welfare that works’ in November 2010. If they’re lucky! Housing benefit sends award letters for every claimant to their social landlord explaining how much they will be paid each week and when these payments will appear in the rent account. The letters do not detail any personal information about the claimant such as how the calculation has been done or what their income is. The information is used by landlords to explain to their tenants what their shortfalls are and how and when to pay. Good practice, although some would argue this is a breach of data protection rules and also cumbersome and expensive for the tax payer to communicate on paper this way. Under Universal Credit claimants alone will receive this information and will need to assess how much they pay each month for their rent. This poses a number of difficulties: Many social landlords charge a weekly rent and the new benefit is paid monthly. Many claimants believe there are four weeks in a month and will therefore under pay their rent. Other problems arise when you take social landlords out of the equation, such as rent increases. Until recently the DWP believed that rent increases only happened in April, in fact they occur at all different times of the year with some landlords having multiple rent increases cycles across their properties. At present this information is sent electronically to Housing Benefit to be processed. Under Universal Credit the DWP expects each claimant to declare their rent increase individually and they believe they can process these one by one by the time the next payment is due. For over 12million claimants that’s no mean feat. Some claimants will not pay their rent, they will use their housing cost money for other debts or other urgent expenses. If the claimant has been sanctioned they may use their housing costs as living costs. Of course DWP have put in place safeguards to prevent homelessness and rent arrears. Namely Alternative Payment Arrangements (APA). These should be put in place when the claim begins if the claimant has rent arrears, other money troubles or certain vulnerabilities. They can also be activated as soon as a claimant reaches eight weeks arrears alongside a third party deduction which claws back the money owed at 5% of the standard allowance (or £15.70 a month for a single person). If you live in West London in a one bedroom flat you may have £1640 of rent arrears by eight weeks and it will take eight years to pay these back at £15.70 a month, but then again under the UC system you shouldn’t be out of work for eight years and be able to pay the debt back at a higher rate once you are employed. It can also be difficult to get an APA in place at time of claim, the Job Centre staff rely solely on the claimant knowing how much their rent arrears are and then disclosing this. Aside from the obvious difficulties of having housing costs paid directly to the claimant landlords will have to manage their rent accounts differently. Under the current system the national insurance number is the reference for a claim and when an APA is in place the only information a landlord has to go by is the NINO, amount of money paid and dates the money covers. If the landlord doesn’t have the NINO for their tenant or it is kept somewhere they have to manually access then it can take a long time to allocate the payment to the rent account. This isn’t too much of a problem now when landlords only have a handful of claimants but if they have thousands, or tens of thousands claimants then they will need to ensure their housing management systems can allocate payments automatically. The DWP have announced that the reference number for UC will not be the NINO from the February 2015 nationwide rollout, yet UC is live now and the NINo remains the reference. DWP also haven’t announced what they propose to replace it with. Landlords are calling out for a UC reference number in the same way a HB reference number is used. However DWP are looking into using existing tenancy references which leads to problems such as two different associations having the same reference for two different tenants. It also doesn’t account for the difference in the format of the tenancy reference, some landlords use eight digits, some ten, some use mixtures of numbers and letters, how will the UC IT system cope with this? Universal Credit is fundamentally an excellent idea. It replaces three different benefit offices who all work out their benefits differently. Housing benefit is worked out weekly, tax credits are worked out annually and income replacement benefits are paid fortnightly. The DWP are right that this drip of money which comes in weekly, fortnightly and four weekly makes it harder for people to budget when they start work and are paid monthly. Universal Credit also has the major advantage that it allows real time information to be used so claimants who’s work hours change weekly and monthly don’t have to trudge to their local benefit office every fortnight wage slip in hand to have their benefits suspended, readjusted, paid and clawed back. DWP have simply underestimated how complex the benefits system is and the many players involved, not just claimants and administrators. Social landlords are the key to the success of this brilliant idea, they need to be worked with, listened to and consulted. It does appear that DWP are finally receiving this message, they are working with housing providers, employing housing staff for projects and sending out regulations for consultation. If the communication between DWP and landlords continues to grow as it is now, then UC will not just be the biggest change to the benefits system since its inception it will also be the greatest. Download Phil's article in IRRV Benefit magazine  (December 2014 edition). For further information on entitledto visit  www.entitledto.co.uk  or contact  info@entitledto.co.uk https://www.entitledto.co.uk/blog/2014/december/02/universal-credit-were-not-sure-where-but-we-might-know-when https://www.entitledto.co.uk/blog/2014/december/02/universal-credit-were-not-sure-where-but-we-might-know-when Tue, 02 December 2014 17:43:58 The effect of Universal Credit on landlords entitledto https://www.entitledto.co.uk/blog/2014/november/03/the-effect-of-universal-credit-on-landlords Universal Credit has a basic premise, to be a benefit which helps unemployed to become employed and to support the under-employed to become full time employed. To do this the benefit is paid monthly like a wage, it includes help for housing costs as a wage would. Further it is administered by one department, the DWP, who will have limited communication with other agencies such as social landlords. In other words it gives the claimant a lump sum once a month to manage themselves. Under current practices, housing benefit departments have exceptional relationships with social landlords all over the country. There is an enormous amount of data sharing and cooperative working to help vulnerable claimants receive their correct housing benefit awards and prevent homelessness. It appears that until recently the DWP had no idea about the extent of this data sharing. Housing benefit sends award letters for every claimant to their social landlord explaining how much they will be paid each week and when these payments will appear in the rent account. The letters do not detail any personal information about the claimant such as how the calculation has been done or what their income is. The information is used by landlords to explain to their tenants what their shortfalls are and how and when to pay. Good practice, although some would argue this is a breach of data protection rules and also cumbersome and expensive for the tax payer to communicate on paper this way. Under Universal Credit claimants alone will receive this information and will need to assess how much they pay each month for their rent. This poses a number of difficulties: Many social landlords charge a weekly rent and the new benefit is paid monthly. Many claimants believe there are four weeks in a month and will therefore under pay their rent. Other problems arise when you take social landlords out of the equation, such as rent increases. Until recently the DWP believed that rent increases only happened in April, in fact they occur at all different times of the year with some landlords having multiple rent increases cycles across their properties. At present this information is sent electronically to Housing Benefit to be processed. Under Universal Credit the DWP expects each claimant to declare their rent increase individually and they believe they can process these one by one by the time the next payment is due. For over 12million claimants that’s no mean feat. Some claimants will not pay their rent, they will use their housing cost money for other debts or other urgent expenses. If the claimant has been sanctioned they may use their housing costs as living costs. Of course DWP have put in place safeguards to prevent homelessness and rent arrears. Namely Alternative Payment Arrangements (APA). These should be put in place when the claim begins if the claimant has rent arrears, other money troubles or certain vulnerabilities. They can also be activated as soon as a claimant reaches eight weeks arrears alongside a third party deduction which claws back the money owed at 5% of the standard allowance (or £15.70 a month for a single person). If you live in West London in a one bedroom flat you may have £1640 of rent arrears by eight weeks and it will take eight years to pay these back at £15.70 a month, but then again under the UC system you shouldn’t be out of work for eight years and be able to pay the debt back at a higher rate once you are employed. It can also be difficult to get an APA in place at time of claim, the Job Centre staff rely solely on the claimant knowing how much their rent arrears are and then disclosing this. Aside from the obvious difficulties of having housing costs paid directly to the claimant landlords will have to manage their rent accounts differently. Under the current system the national insurance number is the reference for a claim and when an APA is in place the only information a landlord has to go by is the NINO, amount of money paid and dates the money covers. If the landlord doesn’t have the NINO for their tenant or it is kept somewhere they have to manually access then it can take a long time to allocate the payment to the rent account. This isn’t too much of a problem now when landlords only have a handful of claimants but if they have thousands, or tens of thousands claimants then they will need to ensure their housing management systems can allocate payments automatically. The DWP have announced that the reference number for UC will not be the NINO from the February 2015 nationwide rollout, yet UC is live now and the NINo remains the reference. DWP also haven’t announced what they propose to replace it with. Landlords are calling out for a UC reference number in the same way a HB reference number is used. However DWP are looking into using existing tenancy references which leads to problems such as two different associations having the same reference for two different tenants. It also doesn’t account for the difference in the format of the tenancy reference, some landlords use eight digits, some ten, some use mixtures of numbers and letters, how will the UC IT system cope with this? Universal Credit is fundamentally an excellent idea. It replaces three different benefit offices who all work out their benefits differently. Housing benefit is worked out weekly, tax credits are worked out annually and income replacement benefits are paid fortnightly. The DWP are right that this drip of money which comes in weekly, fortnightly and four weekly makes it harder for people to budget when they start work and are paid monthly. Universal Credit also has the major advantage that it allows real time information to be used so claimants who’s work hours change weekly and monthly don’t have to trudge to their local benefit office every fortnight wage slip in hand to have their benefits suspended, readjusted, paid and clawed back. DWP have simply underestimated how complex the benefits system is and the many players involved, not just claimants and administrators. Social landlords are the key to the success of this brilliant idea, they need to be worked with, listened to and consulted. It does appear that DWP are finally receiving this message, they are working with housing providers, employing housing staff for projects and sending out regulations for consultation. If the communication between DWP and landlords continues to grow as it is now, then UC will not just be the biggest change to the benefits system since its inception it will also be the greatest. https://www.entitledto.co.uk/blog/2014/november/03/the-effect-of-universal-credit-on-landlords https://www.entitledto.co.uk/blog/2014/november/03/the-effect-of-universal-credit-on-landlords Mon, 03 November 2014 17:39:57 Bringing budgeting into the spotlight entitledto https://www.entitledto.co.uk/blog/2014/october/03/bringing-budgeting-into-the-spotlight In this blog (also published as an article in Benefit magazine) entitledto Director, Phil Agulnik explains why helping customers manage their money has become increasingly important for local authorities. There is a new emphasis in local authorities on helping customers manage their money. As well as paying out benefits, increasingly local authorities are proactively getting involved in helping people on benefits budget more effectively. A number of factors have brought the issue of budgeting into the spotlight. Perhaps foremost is the growth of debt during the recession and the increasing number of individuals struggling with payday loans. It is only natural that local authorities will be concerned to ameliorate the impact of debt on their communities, and assisting people on a low income to manage money better is part of an approach to help individuals help themselves. As such, budgeting support sits alongside other services to improve citizens’ social and financial inclusion. A second factor is the effect of April 2013’s welfare reforms, with the spare room subsidy restriction and localisation of council tax benefit creating a gap between outgoings and benefit income. Clearly these changes have added pressure on household budgets which were previously having their rent and council tax paid in full. In turn this has meant growing arrears and knock-on impacts on housing associations’ and local authorities’ income, and the services they can provide. Third, the greatly increased use of Discretionary Housing Payments (DHP) creates a need to assess applicants more systematically, and many local authorities now require customers to provide income and expenditure details in order to have their DHP considered. Even if the only reason that customers start a budget is so that they can apply for a DHP, this still creates an opportunity to work with them on how to manage money better and what opportunities there may be to reduce spending or increase income. The last factor is the introduction of Universal Credit (UC). Arguably it is the change in how benefits are administered under UC, with claimants receiving one monthly payment including rent, which is more significant than the various changes in benefit rules contained in the legislation. Though the number of people so far affected by UC is very small, it is becoming increasingly apparent from the pilot areas that many people will struggle with managing the single monthly payment. Early evidence suggests that a third or more of recipients are likely to fall into arrears with their rent. Providing extra support to this group, helping them budget on a monthly basis and pay rent themselves, is one of the roles envisaged for local authorities under the UC local services support framework. For all these reasons, it is necessary to invest in new  budgeting tools . Not only do these have to be ready for the introduction of UC, but they need to help right now with existing demand for money advice, help in dealing with rent and council tax arrears, and in applying for DHPs. The new budgeting tools should have a simple design, with users able to enter a quick budget in a couple of minutes, using only basic headers such as ‘bills’, or to create a more detailed budget that drills down to individual items. The idea should be to provide flexibility for the user, accommodating individual preferences rather than forcing a particular kind of data entry structure. For many of the people with the most need to budget, using such a tool will be the first time they have thought about where their money goes. Hence the emphasis is on finding a quick and easy way to start the process, with the ability to add detail later in the process. Our version presents a graphical illustration of the user’s spending and targeted messages and budgeting tips, with supporting text set by the provider organisation. This means people can be pointed towards local sources of help and advice. Where a customer wants to, they can save a number of budgets, perhaps to look at the effect of alternative scenarios such as going into work or moving home. The entitledto budgeting tool also includes the facility to pre-populate the budget using a benefit calculation. The idea is to provide a comprehensive income maximisation and budgeting service in one responsive, easy-to-use service. Finally, a range of features is included to help people move between adviser-led and self-service budgeting. As well as a ‘find an adviser’ feature, for people who start a budget themselves but then find they need help, there is also the facility to share budgets with clients so that they can take ownership of the process. Advisers also have access to an outcomes and next steps page, which can be used to triage customers or to identify those where direct payment of rent (so called ‘Alternative Payment Arrangements’) are most likely to be needed. Download Phil's article in IRRV Benefit magazine  (August 2014 edition). For further information on the budgeting tool visit  www.entitledto.co.uk/budget  or contact  info@entitledto.co.uk https://www.entitledto.co.uk/blog/2014/october/03/bringing-budgeting-into-the-spotlight https://www.entitledto.co.uk/blog/2014/october/03/bringing-budgeting-into-the-spotlight Fri, 03 October 2014 17:37:43 Council Tax Support - one year on entitledto https://www.entitledto.co.uk/blog/2014/may/02/council-tax-support-one-year-on Which residents needed help and how much help they would be given was mostly left to the council to decide with a few exceptions: 1. The Government decided that no pensioner should lose out under these new schemes and issued regulations that kept pensioners entitlements to approximately the same levels of the old benefit scheme. 2. Councils had to consider whether any residents were vulnerable and whether their scheme provided an incentive to work, but they were not required by law to make any particular rules about those issues. 3. The amount of money the Government gave to councils to provide this help was around 10% lower than under the old benefit scheme meaning councils had to cut the amount of help they provided or finding the money for the scheme from elsewhere. In many councils, including all of Wales and Scotland, the local scheme closely mirrored Council Tax Benefit and most people saw little change in the amount of Council Tax they had to pay. However, in around 80% of English councils the local scheme had new rules in place. These rules ranged from allowing people who are working to keep more of the money they earn, to increasing the amount of money that other adults in the home are expected to pay towards the council tax, to only paying support to those who had lived in the borough for a certain period of time. The most common change was requiring everyone in the district to pay a proportion of their council tax, no matter what their income. This change was implemented by more two thirds of English local authorities. This ranged from some boroughs requiring everyone to pay at least 5% of their total council tax bill to others demanding at least 35%. How things have changed in year two Councils are required to review their local schemes every year. As long as they adequately consult their residents they can make as changes as they like each April. Pensioners’ entitlement is still protected by the Government and in Wales and Scotland there is still no change to the old scheme. In almost a third of English local authorities though, the scheme has been changed in its second year. Of the approximately one in five councils that previously protected their residents from the cut in funding only one in seven do now. Most councils that changed their schemes in the second year have increased the amount that their residents have to pay. However, a very small minority have rolled back some of the cuts they previously put in place with more generous schemes than the first year. What we can see from the developing schemes is that they are becoming more varied and more local. Councils are refining the scheme in their area, looking at the schemes put in place by their neighbours and others but adjusting new ideas to fit the needs of their residents and their own finances. Some councils are starting to develop radical ideas that reject the old system entirely, creating new local schemes from scratch rather than tinkering with the rules as they have stood for years. What this shows is that, as councils settle into their new role as scheme designers, rather than simply administrators, they are growing more bold and decisive. Next year we may see more radical changes than we have seen yet which will affect local people in greater numbers. To see how the changes council in your area has made affect you go to our benefits calculator and put in your post code or select your council. We cover all but  16 schemes  in our calculator at  www.entitledto.co.uk/benefits-calculator https://www.entitledto.co.uk/blog/2014/may/02/council-tax-support-one-year-on https://www.entitledto.co.uk/blog/2014/may/02/council-tax-support-one-year-on Fri, 02 May 2014 10:35:48 Under occupancy (aka the Bedroom Tax) - key information about this reform for entitledto users entitledto https://www.entitledto.co.uk/blog/2014/april/04/under-occupancy-aka-the-bedroom-tax-key-information-about-this-reform-for-entitledto-users At entitledto we provide hundreds of help pages and information on benefits and entitlements. We've been getting asked about under-occupancy (aka the Bedroom Tax) and so this weeks blog explains the key factors about this reform and how it works. Only working-age people are affected by the reform. What counts as working age? If you or your partner were born before 5 October 1951 you will be classed as pension age when the changes occur in April 2013 and you won’t be affected. This is because the under occupation rules will only apply to tenants who are ‘working age’, which means tenants who do not qualify for Pension Credit. The minimum age for Pension Credit (and other pension age benefits) is changing. For both men and women the minimum age increases in line with women’s state pension age. From 6th April 2012 the minimum age is 61 and reach roughly 61 and a half by April 2013. If you are in a couple your eligibility for Pension Credit is currently determined by the age of the oldest person in the couple, even if the oldest person in the couple is male. However, please be aware that under Universal Credit, which is being introduced from October 2013, this rule will be reversed and the age of the youngest person will determine whether they qualify for Pension Credit. I am a working age claimant with a joint tenant who is pension age. How will I be affected? The reduction will be applied to the eligible rent before the Council apportions the share of the rent for benefit purposes. For example, Mr and Mrs Freestone are an elderly mother and adult son who share the tenancy of a 3 bed Council house. The rent for the property is £80.00 per week. According to the government's rules they need a 2 bed house, so their eligible rent will reduce to £68.80 because a 14% reduction will apply as Mr Freestone is over accommodated. The restriction does not apply to Mrs Freestone, so her Housing Benefit will be based on £40pw. Mr Freestone will, therefore, have his benefit based on a restricted rent of £24.80. When will the changes come into effect? The changes came into effect in April 2013 for all working age Housing Benefit claimants, including existing claimants. After October 2013 the new size criteria was absorbed into Universal Credit, with the element of the credit for housing costs incorporating any deduction for the additional bedroom(s). How will the number of bedrooms I need be worked out? Housing Benefit will calculate how many bedrooms you need as follows:   One bedroom for each couple or named tenant if you are not a couple One bedroom for up to two dependent children under 10 regardless of gender One bedroom for up to two dependent children under 16 of the same gender One bedroom for any couple or single person aged 16 or over One bedroom for an overnight carer to provide care to a disabled tenant or their partner The number of bedrooms a household can be increased in certain circumstances. The rules in this area are complicated and you may need to take advice on your individual situation. Are there any exemptions? Special rules affect the following groups: Disabled children Disabled adults who need overnight care Children in the armed forces Foster Carers For more information see  exemptions from the under occupation rules . However, you are not affected by the under-occupation penalty (bedroom tax) if you have been receiving Housing Benefit continuously at the same address since before 1 January 1996.  In order to qualify for this exemption, you must not have had a break in your claim or lived anywhere except at your current address in that time (except for any period where a fire, flood, explosion or natural catastrophe meant it was not possible to live in the property).  You may also qualify if you have lived at your current property since before 1 January 1996, even if you were not the tenant if you inherited your tenancy from a family member. This rule was only made clear in January 2014, following a court ruling. Some people may have already been affected by the under-occupation penalty and had their Housing Benefit reduced since April 2013. If you have had money taken off your Housing Benefit because you have a spare room, you should contact your local council or housing officer. The government have removed this exemption from March 2014. This means that anyone who was exempt from the under-occupation penalty because of this rule will have to pay extra towards their rent in the future. What counts as a bedroom? There is no centrally determined definition of what counts as a bedroom. However, in setting the rent for your home your landlord will normally have to define the number of bedrooms you have and this should be stated in your tenancy agreement. How much will my Housing Benefit be reduced? If you live in a property that is under occupied then the ‘eligible rent’ (the amount you pay minus any ineligible service charges) used to calculate your Housing Benefit will be reduced by a percentage: One bedroom too many: 14% reduction Two or more bedrooms too many: 25% reduction If you currently receive Housing Benefit but get less than the maximum amount (for instance because you have some earnings) then you should work out the cash amount of the restriction by multiplying your eligible rent by the percentage reduction. The amount of Housing Benefit you receive will be reduced by the cash amount of the rent restriction if you claim after April 2013. https://www.entitledto.co.uk/blog/2014/april/04/under-occupancy-aka-the-bedroom-tax-key-information-about-this-reform-for-entitledto-users https://www.entitledto.co.uk/blog/2014/april/04/under-occupancy-aka-the-bedroom-tax-key-information-about-this-reform-for-entitledto-users Fri, 04 April 2014 17:32:55 Our new customisable budgeting tool entitledto https://www.entitledto.co.uk/blog/2014/march/25/our-new-customisable-budgeting-tool Do you need a simple, effective budgeting solution to help support good financial management? If so, we have an exciting new product that can help promote good financial choices and protect revenue streams. Helping our users to manage their finances more effectively is a key objective for entitledto and we want to ensure that our users are fully supported to manage their income and finances. With Universal Credit payments being paid as one lump sum and housing costs being paid direct to claimants, budgeting skills and making good financial choices will become increasingly essential. We want to ensure that organisations can address these challenges and have the tools to support those in financial need, particularly before Universal Credit is fully rolled out. Budgeting and financial management is not always an exciting topic, but it is an essential activity. For various reasons budget planners can be notoriously tedious and time-consuming and it’s hard to keep people focused on the sums or engaged to complete the exercise effectively.  We know there are other budgeting tools out there, but we are really pleased with our offer. Why? Because it’s quicker, easier to use and you can get results in minutes.  We want to ensure that both the adviser and the user experience is a good one, which is why we have created a simple, holistic solution. Use our budgeting tool with our calculator taking you seamlessly, from benefits, to in work ‘better off’ calculations, to budgeting.  Its fast, it’s simple and its customisable pages mean that organisations can develop their own tailored support, advice or triage solutions. Advisers can save, track and manage multiple budgets and reports can be generated to analyse patterns and budget trends.  Subscribe to our budgeting tool as a standalone product or integrate it with our range of calculators. Key features of the budgeting tool include: A quick & comprehensive budget all on one page  Adjustable to suit weekly or monthly spending  Promote your services or signpost with customised content  Analyse pattern & trends and track budget outcomes across the organisation  Branded to match your corporate style  Integration with the benefits calculator for a one-stop financial planner  For further information on the budgeting tool visit  www.entitledto.co.uk/budget  or contact  hello@entitledto.co.uk https://www.entitledto.co.uk/blog/2014/march/25/our-new-customisable-budgeting-tool https://www.entitledto.co.uk/blog/2014/march/25/our-new-customisable-budgeting-tool Tue, 25 March 2014 17:30:18 How can entitledto's adviser tool help you to help your clients in financial need? entitledto https://www.entitledto.co.uk/blog/2014/march/11/how-can-entitledtos-adviser-tool-help-you-to-help-your-clients-in-financial-need About adviser We’ve enhanced adviser with the intention of supporting professionals who work to help people in financial need. We've improved the functionality and management information and statistics and we’ve also included the facility for advisers to complete multiple calculations for clients and carry out 'better-off' and ‘what if’ comparisons.  Features of the adviser calculator We’ve produced a  short promotional video on adviser  which gives a summary of how adviser works and how it might help you if you are a professional working to help people in financial need.   Accessing adviser All you need to access adviser is a simple browser and internet access. https://www.entitledto.co.uk/blog/2014/march/11/how-can-entitledtos-adviser-tool-help-you-to-help-your-clients-in-financial-need https://www.entitledto.co.uk/blog/2014/march/11/how-can-entitledtos-adviser-tool-help-you-to-help-your-clients-in-financial-need Tue, 11 March 2014 18:14:55 Benefit changes in 2014 entitledto https://www.entitledto.co.uk/blog/2014/february/04/benefit-changes-in-2014 To help you understand what changes are happening to benefits in 2014 we have put together a guide which summarises changes throughout the year. Changes to Jobseekers Allowance (JSA) With effect from April 1, 2014 (in addition to the right to reside requirement) a  Jobseekers Allowance  (JSA) Income based (IB) claimant (who is not in the exempt group) cannot be treated as habitually resident in the UK, the Channel Islands, the Isle of Man or the Republic of Ireland unless that claimant has been living in any of those places for the past three months  (“the three month rule”). Where this condition is not met, such a claimant will be a person from abroad and not entitled to JSA(IB). Where the three month rule condition is met and the claimant has a qualifying right to reside, the Jobcentre Plus will need to go on to consider whether the claimant is actually habitually resident, in accordance with the guidance. Changes to spare room subsidy for disabled children In April 2013 the Government made changes to Housing Benefit to ensure that it covered households for those bedrooms that people actually need. The new regulation, which comes into force from 4 December 2013, means that disabled children can be considered for a room of their own if: They are entitled to the highest or middle rate care component of Disability Living Allowance (DLA); Their local authority is also satisfied that sharing a bedroom would pose either a risk of physical harm or cause frequent and significant disruption to either the disabled child or the child with whom they would normally be expected to share. The new Regulations will also: Provide for an extra bedroom where a joint tenant or their partner needs overnight care or is a qualifying parent or carer; Change the definition of a ‘young individual’ to exclude those who are approved foster carers – in Scotland, approved foster carers or kinship carers. This is to prevent the shared accommodation rate from applying to single claimants under 35 who are approved foster carers. Council Tax Support schemes From April 2013 Council Tax Benefit as it existed was replaced by local  Council Tax Support  schemes.  Many local councils stayed with a similar scheme to Council Tax benefit and others decided on their own scheme which is reflected in the calculator. From April 2014 local councils may be changing their schemes again as all councils are receiving less money from the Government to fund these schemes.  The Scottish and Welsh schemes will remain the same as 2013. Universal Credit (UC) in 2014 Universal Credit  is one of the biggest changes to the benefits system in the Government’s welfare reform programme. Universal Credit changes the way people receive help with living and housing costs. It affects the amount of benefit paid to customers, the conditions of receiving that benefit and the way payments are made. Universal Credit is being introduced in stages. In 2013 it was introduced in Tameside, Wigan, Warrington, Oldham, Hammersmith, Rugby, Inverness, Harrogate, Bath and Shotton. The Claimant Commitment was rolled out to all Jobcentres from October with all Jobcentres moving to the new universal commitment regime. The rest of the timetable for the rollout of Universal Credit is not clear at the moment. The original government timetable for 2014 onwards is below. However, it is likely to be subject to review. Please check back here for updates on the rollout timetable: From April 2014 it will affect new claims for tax credits From April 2014 it will begin to affect existing benefit claimants By 2017 every claim will have been moved onto UC If you’d like to find out more about the changes see the full  Benefits changes in 2014  help page and for previous changes to benefits see our  Benefits changes in 2013  guide. https://www.entitledto.co.uk/blog/2014/february/04/benefit-changes-in-2014 https://www.entitledto.co.uk/blog/2014/february/04/benefit-changes-in-2014 Tue, 04 February 2014 17:28:28 Benefit changes in 2013 entitledto https://www.entitledto.co.uk/blog/2013/september/30/benefit-changes-in-2013 These benefit changes affect working age people. If you were born before 5 th  October 1951 then you are counted as pension age and are not affected by these changes. For more information  see what counts as pension age . Under occupation From April 1, no matter where you live in the country, if you rent from your council or from a Housing Association, your Housing Benefit will be cut if you have a ‘spare’ bedroom. The Government works out how many rooms you need depending on how many people live with you and compares this to how many bedrooms you have in your home. If you have more rooms than the Government thinks you need, your Housing Benefit will be cut by 14% of your rent if you have one spare room or 25% if you have two or more. According to the Government, you are allowed one room each for the following people in your household: Each single adult Each adult couple Each child aged 16 or over Two girls or two boys under the age of 16 Two children of either gender under the age of ten A carer who stays overnight This is an area that has captured significant media attention, with the popular press dubbing this change "the bedroom tax". Benefits cap Starting from April in four London authorities, for people who receive Housing Benefit, and later Universal Credit, the benefits cap will start to be phased in. By the end of the September 2013, every part of Great Britain will be affected. The cap sets a limit on how much one household can receive in certain benefits. A single person can receive up to £350 per week and a couple or a lone parent can receive up to £500. Any amount over this will be stopped from their Housing Benefit or Universal Credit. Most people affected will either live in an area with high rents or will have large families. Some people are exempt from the cap, such as those who are in work or who receive certain disability benefits. For more information see our  guide to the benefits cap . Council Tax Benefit From April 1 Council Tax Benefit as it existed in Great Britain ended. It has been replaced by new schemes decided by the local council in your area or by the Scottish Parliament or Welsh Assembly if you live outside England. The amount of local support available varies considerably in different parts of the country. However, as all councils are receiving less money from the Government to fund these schemes, many people will receive less help as a result. For more information on how the new system works see our  guide to Council Tax Benefit changes . Universal Credit The biggest changes to the benefits system will start in October 2013, when Universal Credit is due to start across Great Britain (some people will already be affected if they live in pilot areas). The introduction of Universal Credit replaces a series of benefits which will gradually be abolished. These benefits include: Income Support Income-based Jobseeker’s Allowance Income-related Employment and Support Allowance Housing Benefit Child Tax Credit Working Tax Credit As the transition starts, new claims for any of these benefits will become claims for Universal Credit. People already receiving one these benefits will start to move across to the new system from 2014. This will not happen all at once, but the Government hopes that no-one will be receiving any of these benefits by 2017. All people receiving Universal Credit will have to fulfil certain conditions in order to receive the benefit. These conditions are usually to do with work, work-seeking or being unable to work. To find out more on who is affected and when, who can receive transitional protection and what conditions you may have to meet, see our  Universal Credit factsheet. Personal Independence Payments From June 2013 Great Britain, new claims to Disability Living Allowance (DLA) will become new claims for Personal Independence Payments (PIP). From October 2013 renewal claims for people receiving DLA for a fixed period will be for PIP and from 2015 existing claimants of DLA will start to be transferred onto PIP. People aged below 16 or over 64 will not be affected by these changes and will continue to receive DLA. Personal Independence Payments can consist of two parts – a daily living element and a mobility element and each one can be at the standard rate or the enhanced rate if extra assistance is needed. Most people will have a face to face consultation with a health professional to assess their needs as part of their claim. The person’s circumstances are compared with a set of criteria to determine if they are entitled to help. Successful claims will then be reviewed at intervals depending on how likely it is that the person’s circumstances will change. For more information see our  guide to Personal Independence Payments. Keep up to date Almost every day the Government or one of the key agencies involved alter the Welfare Reform policies. They call it "bedding down". We call it confusing! However, as changes arrive we will continue to make that information available to our  subscribers , and to let people understand how the changes impact their personal finances, by building them into our calculators.  It's free to subscribe and we think you should. Here's why. These are the largest changes that the benefits system has seen for decades. entitledto is here to help. In order for you to: Understand what the changes are. Understand how they will impact on your personal finances, housing and other benefits. Understand when the changes will come about; and Understand what you can do if the changes negatively impact you. You need to keep up to date. The very best way to do that is to  sign up for updates  today. We promise to respect your privacy. We will never resell your information. It doesn't cost anything. You can unsubscribe at any point. https://www.entitledto.co.uk/blog/2013/september/30/benefit-changes-in-2013 https://www.entitledto.co.uk/blog/2013/september/30/benefit-changes-in-2013 Mon, 30 September 2013 18:02:50 What is Universal Credit? entitledto https://www.entitledto.co.uk/blog/2013/september/26/what-is-universal-credit Universal Credit will be gradually rolled out across the country so that it is fully in place by 2017. People who are currently receiving benefits will not be affected until April 2014 at the earliest. In the first year, April 2013 to March 2014, you must be newly unemployed and living in a selected area to claim Universal Credit. In April 2013 Universal Credit started in Tameside, Greater Manchester. It has expanded to parts of Wigan, Warrington and Oldham. From October it will be rolled out to Hammersmith, in November to Inverness and Rugby and in February to Bath and Harrogate. In March it will be rolled out to Shotton and then it will gradually cover more parts of the country, eventually affecting all of the United Kingdom. What is Universal Credit? Universal Credit (UC) is a means-tested benefit for working age people that replaces a number of existing benefits and tax credits. It is designed to support people who have a low (or no) income with their basic living expenses and housing costs. Each claim is assessed based on a number of elements including allowances for living expenses, for children, childcare expenses, and housing costs (for rent or mortgage payments). Additional elements for carers and for people with disabilities or certain health conditions can also be added to the maximum amount of benefit payable. For more information see our  guide to how Universal Credit is worked out. What is Universal Credit replacing? Over a number of years the following benefits and tax credits will be abolished as UC replaces them: Income Support Income-based Jobseeker’s Allowance Income-related Employment and Support Allowance Housing Benefit Child Tax Credit Working Tax Credit Other benefits that are not means-tested will continue including some types of Jobseeker’s Allowance and Employment and Support Allowance. Disability benefits that are not means tested will not be affected by this change for example Disability Living Allowance or Personal Independence payments (PIP - See our guide to Personal Independence Payments for more information on changes to disability benefits). Council Tax Benefit was replaced with Council tax Support from April 2013 and is not part of UC. See our  guide to Council Tax Support . Who can get Universal Credit? Universal Credit is payable to people out of work, including people looking for work and people unable to work due to illness, disability or childcare commitments and to people in work on low incomes. Most people will claim Universal Credit online. For more information, see our  guide to online claims . Receipt of UC comes with a claimant commitment. This means that everyone who claims is placed into a group that determines what they have to do in order to continue receiving the benefit. For more information see our  guide to the Claimant Commitment . Payments of Universal Credit For most people, Universal Credit will be paid every month into their bank account. The Government says this is to make benefit payments more like payments from a job. This is a significant change from many benefits which are paid weekly. For people whose Housing Benefit is currently paid to their landlord (such as many people who rent from a council or housing association), they will now receive the payments themselves and must arrange to pay their rent themselves. Although UC is made up of different elements for living expenses, for rent and childcare, it will be paid as one big payment every month. The customer will have to decide how much to put aside for each of their different expenses. When will Universal Credit start? Universal Credit is being introduced in stages. The timetable is as follows: From 29 April 2013 it will be introduced in Tameside From July 2013 it will be introduced in Wigan, Warrington and Oldham From October 2013 it will be introduced in Hammersmith From November 2013 it will be introduced in Rugby and Inverness From February 2014 it will be introduced in Harrogate and Bath From March 2014 it will be introduced in Shotton The Claimant Commitment will also roll out to all Jobcentres from October with all Jobcentres moving to the new universal commitment regime. From April 2014 it will affect new claims for tax credits From April 2014 it will begin to affect existing benefit claimants By 2017 every claim will have been moved onto UC How will you be affected under Universal Credit? We have a Universal Credit calculator that is fully integrated into our benefits calculator. This allows users to see how they will be affected under universal credit at the end of a calculation. To find out how Universal Credit will affect you use our benefits calculator at  www.entitledto.co.uk . https://www.entitledto.co.uk/blog/2013/september/26/what-is-universal-credit https://www.entitledto.co.uk/blog/2013/september/26/what-is-universal-credit Thu, 26 September 2013 17:53:55 Energy price rises warned - claim the Warm Homes Discount if you are eligible entitledto https://www.entitledto.co.uk/blog/2013/august/01/energy-price-rises-warned-claim-the-warm-homes-discount-if-you-are-eligible What is it? The Warm Homes Discount provides a rebate on your energy bills. The amount of the rebate for 2012/13 was £130 and the amount of the rebate for 2013/14 is £135. Can you get it? If you claim the guarantee element of Pension Credit only (without any savings credit element) you should automatically receive the rebate from your energy supplier. There is no need to make a claim. If you are over 80 and claim the guarantee element of Pension Credit (either with or without a savings credit element) you should also automatically receive the rebate. If you are under 80 then you must receive only the guarantee element of Pension Credit, without any savings credit element. More information is available on  automatic rebates on your energy bill . Other people can also get the rebate (these people are known as the 'broader group'). The Warm Homes Discount is administered by individual energy companies and they set their own rules. Please click on the links below to find out about the rules for your energy company. How do I claim? To see if you qualify and to claim your discount click on the energy company that supplies you: Atlantic  - 0800 300 111 British Gas  - 0800 072 8625 EDF Energy  - 0800 015 0960 E.ON  - 0800 051 1480 Npower  - 0800 172 6999 Scottish Hydro  - 0800 300 111 Southern Electric  - 0800 300 111 SSE   - 0800 300 111 Swalec  - 0800 300 111 Other options: reducing your bill You can often reduce your energy bills by switching supplier or moving to a better tariff with you current supplier. To find out if you could save use the  UK Power comparison tool .        More information Director, Phil Agulnik appeared on BBC Radio 5 live yesterday talking about the Warm Homes Discount. If you'd like to listen to the show the recording is  available online . https://www.entitledto.co.uk/blog/2013/august/01/energy-price-rises-warned-claim-the-warm-homes-discount-if-you-are-eligible https://www.entitledto.co.uk/blog/2013/august/01/energy-price-rises-warned-claim-the-warm-homes-discount-if-you-are-eligible Thu, 01 August 2013 17:52:43 Housing Benefit - eligibility and how to claim entitledto https://www.entitledto.co.uk/blog/2013/july/26/housing-benefit-eligibility-and-how-to-claim Housing Benefit - what is it? If you're on a low income, whether you're working or not, and need financial help to pay all or part of your rent, you may be able to get Housing Benefit to help you cover the cost. How much will I get? If you rent a property or room from a private landlord, your maximum Housing Benefit will be calculated with the Local Housing Allowance rules, for more information see  local housing allowance . If you live in council accommodation or other social housing, the most Housing Benefit you can normally get is the same as your 'eligible' rent. However, if you have a spare room, you may be affected by the rules on  under occupation . Our  online calculator  at  www.entitledto.co.uk/calculator/  will help you find out how much benefit you would be entitled to. Eligible rent includes: rent for the accommodation charges for some services, such as lifts, communal laundry facilities or play areas.  Even if it's included in your rent, you won't get any Housing Benefit for:  water charges charges for heating, hot water, lighting, or cooking payments for food or fuel in board and lodgings or hostels The amount of Housing Benefit you may get also depends on your personal and financial circumstances. Can I get it? If you go through the  benefits calculator  we will work out whether you are entitled to Housing Benefit and how much you might be able to claim. How do I claim? If you’re looking for work You can claim Housing Benefit with your claim for Employment and Support Allowance, Income Support or Jobseeker's Allowance. You can call the Jobcentre Plus on 0800 055 6688. Lines are open Monday to Friday 8.00 am to 6.00 pm. Jobcentre Plus will send details of your claims for Housing Benefit to your local council. If you’re claiming Pension Credit You can claim Housing Benefit with your claim for Pension Credit. You can call The Pension Service on 0800 991 234. If you can’t speak or hear clearly, call the textphone 0800 169 0133. Lines are open Monday to Friday 8.00 am to 8.00 pm, Saturday 9.00 am to 1.00 pm. The Pensions service will send details of your claims for Housing Benefit to your local council. If you're not claiming other benefits If you’re not claiming Pension Credit, Income Support, Employment and Support Allowance or Jobseeker's Allowance you can get a form for Housing Benefit and Council Tax Support from your local council. However, you can also  download the national HBCTB1  form from the Department for Work and Pension's website and send this to your council. It is important to return your application form quickly as you will usually only be entitled from the date your form is received. If your circumstances are likely to change you can make a claim for Housing Benefit up to 13 weeks in advance. Even if you get Housing Benefit you may not be able to meet your housing costs. If you are a private tenant you can apply for extra money called a Discretionary Housing Payment which can help with rent. Find out now if you can claim housing benefit by using our  online benefits calculator  at  www.entitledto.co.uk/calculator/ . It takes on average around 8 minutes to complete a calculation. Next blog: In a blog next week our in-house benefits expert, Dan Rust will be blogging about Universal Credit which, over the next four years, will be replacing a number of existing benefits and tax credits including Housing Benefit. https://www.entitledto.co.uk/blog/2013/july/26/housing-benefit-eligibility-and-how-to-claim https://www.entitledto.co.uk/blog/2013/july/26/housing-benefit-eligibility-and-how-to-claim Fri, 26 July 2013 17:51:25 Benefits cap - key information entitledto https://www.entitledto.co.uk/blog/2013/july/16/benefits-cap-key-information The government have set a limit on the total amount of benefit a household can receive. For working-age households, total household welfare payments will be limited to £500 per week for couple and lone parent households, and to £350 per week for single person households where no children are present. The benefits cap is being phased in gradually across the country. It was introduced in Bromley, Croydon, Enfield and Haringey in April 2013 and is being introduced in other parts of Great Britain between 15th July and 30th September 2013. The cap will be administered by your local council through reduced Housing Benefit payments and councils may be able to provide some compensation through a Discretionary Housing Payment for those affected. Benefits included in the cap Most benefits are included except for disability benefits. The cap includes: Housing Benefit Child Benefit & Guardian's Allowance Child Tax Credit Jobseeker's Allowance Income Support Employment and Support Allowance (except when in the support group) Industrial Injuries Disablement Benefit (except when also getting Constant Attendance Allowance) Carer's Allowance Maternity Allowance Reduced Earnings Allowance & Severe Disablement Allowance Widowed Parent's Allowance & Bereavement Allowance Council Tax Support and one-off payments like the social fund are not included. Exemptions You will not be affected by the cap if: you are in work and entitled to Working Tax Credit you have recently been in work you, your partner or a child receives a disability benefit you live in supported exempt accommodation Exemptions for disability Disability benefits that qualify to make you exempt from the cap are: Disability Living Allowance Constant Attendance Allowance Attendance Allowance Industrial Injuries Benefit (and equivalent payments made as part of a War Disablement Pension or the Armed Forces Compensation Scheme) Employment and Support Allowance with a support component. War widows and widowers will also be exempt. Exemptions for current or recent work The benefit cap is intended to increase work incentives so there is an exemption for households that are considered to be "in-work." You will be considered in-work and be exempt from the benefit cap if you are entitled to Working Tax Credit. In addition, from the benefit cap’s introduction there will be a grace period of 39 weeks for those claimants who have been in work for the previous 12 months and find that their circumstances have changed because their job has ended. The grace period will apply equally to those whose job finishes before or after the introduction of the cap. Exemption if you live in Supported exempt accommodation The benefit cap does not apply to people who live in supported exempt accommodation. More information The benefits calculator and our online resources are updated as the changes come into force but if you'd like more information entitledto Director, Phil Agulnik was interviewed on various radio stations on roll-out day and the recordings are  available online . https://www.entitledto.co.uk/blog/2013/july/16/benefits-cap-key-information https://www.entitledto.co.uk/blog/2013/july/16/benefits-cap-key-information Tue, 16 July 2013 17:47:25 Payment of Universal Credit direct to landlords entitledto https://www.entitledto.co.uk/blog/2013/july/05/payment-of-universal-credit-direct-to-landlords It will normally be up to the recipient to work out how much they need to pay to their landlord and to arrange to make that payment. For people renting from their council or a housing association this is different to the existing system. At present people normally receive payments for living expenses (such as Income Support, Jobseeker’s Allowance or Child Tax Credit) themselves and a separate payment of Housing Benefit, intended specifically for their rent, straight to their landlord. For private renters, Housing Benefit is mostly paid direct to them but can be paid straight to their landlord. The Government’s announcement means that, in some circumstances, it might be decided that the amount of Universal Credit that is intended for rent should be paid directly to the landlord. This could be because the tenant is in arrears and owes money to the landlord, or it might be that it is not in the tenant’s best interests to pay the money to cover housing costs straight to them. A decision maker from the Department for Work and Pensions (DWP) will decide whether this should happen. It will not happen automatically. The tenant, or sometimes the landlord, will have to let the DWP know that they want this to happen. They will then consider the case individually and decide who should receive the payments. When are payments made directly to the landlord? If the tenant is more than two months in arrears with their rent, payments will be made directly to their landlord until the amount that they owe is cleared. The payments will then normally switch back to the tenant. If the DWP decide that it is not in the tenant’s best interests to pay them the money for rent they might pay the amount for rent direct to the landlord every month, even if they are not in arrears. The tenant will then receive what is left of their Universal Credit themselves, to pay for living costs. Sometimes they might have to top up their rent payments if their rent is especially high. Although each case is looked at individually, some reasons why it might be decided that it is in the tenant’s best interests to have their rent paid directly to their landlord include: The tenant has a history of rent arrears They have severe debt problems They are unable to manage your affairs due to a disability or illness They have an alcohol, drug or gambling dependency https://www.entitledto.co.uk/blog/2013/july/05/payment-of-universal-credit-direct-to-landlords https://www.entitledto.co.uk/blog/2013/july/05/payment-of-universal-credit-direct-to-landlords Fri, 05 July 2013 17:45:56