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Welfare Reform on the Web (May 2012): Social security - UK

The bedsit brigade faces a curb on benefits

R. Mason

Daily Telegraph, Apr. 5th 2012, p. 1

This article reported that the government was considering cutting the costs of housing benefit by denying it to young unemployed people, forcing them to live with parents or other relatives. The proposal formed part of the drive to make sure that people were always better off working than on benefits.

Benefit ceiling will floor low-income households

Anon

Labour Research, Apr. 2012, p.13-15

Changes to Housing Benefit implemented in April 2012 include a ceiling on the Local Housing Allowance (LHA) rates used to calculate the amount of Housing Benefit that some 1.3m private sector tenants are entitled to. They also include a slashing of the LHA rates to the 30th percentile of local rents from the 50th percentile. The government has also removed the 15.00 'excess' that tenants could keep if they found a property cheaper than their LHA rate. Housing charities have expressed fears that large numbers of families will have to move and some households will become homeless. Unions have warned that the cuts will have a major impact on the education and well-being of children who are forced to change schools because their families have relocated.

Families 500 worse off as changes bite, says think tank

T. Ross

Daily Telegraph, Apr. 5th 2012, p. 10

The Institute for Fiscal Studies calculated that households with children would be worst affected by cuts to child tax credit, working tax credit and other reforms which came into effect in April 2012. It said that a typical family would lose 511 a year on average. Labour seized on the figures and claimed that the government was cutting taxes for the richest while hitting families with a 'tax credits bombshell'.

Families to lose 500 a year in tax changes

P. Wintour

The Guardian, Apr. 5th 2012, p. 9

Families with children stood to lose an average of 511 a year on what was being described as black Friday, according to figures compiled for Labour by the Institute for Fiscal Studies. In what was likely to be a key battleground in the local elections, the Treasury said the figures were partial and chose to highlight the impact of the lifting of the personal allowances for most basic rate taxpayers. The Labour analysis followed George Osborne's 2012 budget and was on top of tax increases already introduced, such as the 2011 VAT rise which was costing a family with children an average of 450 a year. The figures included the impact of raising the personal allowance. Labour said more than 850,000 families on modest and middle incomes would lose all their child tax credit, worth about 545 a year. Up to 212,000 working couples earning less than 17,000 a year would lose all of their working tax credit - worth up to 3,870 a year - if they could not increase their working hours. It was the first time the IFS had put these calculations in cash terms.

(See also The Guardian, Apr. 6th 2012, p. 12-13; The Independent, Apr. 5th 2012, p. 1, 6)

Legal aid bill 'puts most vulnerable at risk'

A. Gentleman

The Guardian, Apr. 17th 2012, p. 13

The Legal Aid Bill, which among other things aimed to abolish legal aid for welfare and benefit cases, returned to the Commons and there was speculation that the government could use the controversial 'financial privilege' rules to reject a Lords amendment that could mitigate some of its impact. Campaigners warned that if the bill was passed in its original form it would leave some of the country's most vulnerable people without recourse to advice if they faced a problem claiming state support. Citizens Advice believed that tens of thousands of people would be put at greater risk of homelessness and poverty without funding for their advisers. The timing of the legislation was particularly unfortunate, it added, given that the ongoing reform of incapacity and disability benefits had thrown up so many difficulties, and given that the government would introduce a wholesale transformation of the benefits system next year when it launched universal credit.

Tax reform project running into trouble, say experts

J. Kirkup

Daily Telegraph, Apr. 10th 2012, p. 14

The HMRC's Real Time Information project was designed to support the Coalition government's welfare reform programme by giving tax officials monthly financial readings. The system was intended to allow welfare claimants to keep more of their benefits payments, adjusting transfers as earnings changed instead of at the end of the year. Work on the project was reviewed early in 2012 by the Major Projects Authority, which identified potentially serious problems with the scheme, according to a leaked report seen by the newspaper.

Understanding Universal Credit

S. Royston

Journal of Poverty and Social Justice, vol. 20, 2012, p. 69-86

Universal Credit is intended to be introduced for new claimants in October 2013. Existing welfare claimants are expected to be moved onto the new system over the following four years. It will replace Income Support, income-based Job Seekers' Allowance, income-based Employment and Support Allowance, Housing Benefit and Working and Child Tax Credits. Many families will gain from a simplified system with progressive work incentives, but others will lose out. This article examines the new benefit, and addresses some of the key concerns around its introduction.

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