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Council grapples with changes to benefits system

June 26, 2012 11:26 PM

The introduction of 'Universal Credit' will affect most people in Wiltshire to some degree. UC is a single benefit payment which replaces Income Support, income-based Jobseekers Allowance, income-related Employment and Support Allowance (ESA), Housing Benefit, Child Tax Credit and Working Tax Credit. Disability Living Allowance will be replaced by Personal Independence Payment (PIP) for people over 16.

The changes have already started, with alterations to ESA beginning in April this year.

Council Tax Benefit (CTB), which is not really a benefit but is a rebate of council tax for poorer residents, will be 'localised'. This means instead of the rules being set nationally each council will set up its own scheme, which has to be in place by January 2013. The government is looking for an overall 10% reduction in CTB expenditure.

Changes to Housing Benefit kick in in April 2013. All benefit will be paid directly to tenants - at present it can go to the tenant or the landlord. Tighter rules mean most claimants will get less than they do at the moment. Administratively the system becomes much more complex: currently most claimants are with Housing Associations and Wiltshire Council has been able to make payments directly to the HAs. Now the DWP will make each payment individually.

Government wants the transition from DLA to PIP to include a 20% reduction in expenditure, and it's difficult to see how they will achieve this without causing hardship to many disabled people. The council expects a couple of thousand Wiltshire residents to lose their entitlement to disability benefit, with a consequent loss of carers' allowance.

The benefits bill will also be cut in future years by being tied to the Consumer Prices Index, which rises less than private sector rents. WC officers state that unless that changes, the entire private rental sector will be unaffordable for people on housing benefit within 25 years.

The reduction in disposable income for thousands of residents will have an effect on business in the county. People on benefits usually spend the money they receive locally, so the chances of Wiltshire's economy moving out of recession will be reduced.

Other effects could be more difficult to predict. Many of the people affected live in areas of high deprivation. Educational attainment, health and crime rates could vary. There may be an increase in homelessness. Because of the overall cap on benefits there could be a migration of unemployed people from the London area. More people will be needing advice on finances and debt management, so the work of the Citizens Advice Bureau will increase.

Universal Credit itself begins in October 2013 for new claimants, with existing claimants moving across in stages, to be completed by 2017.

Welfare Reform Act

Updates from DWP

Wiltshire CAB