– Welfare Reform Bill

Welfare Reform Bill in Brief

Universal Credit is the single state-sponsored payment that will combine all current individual benefits. As a result the following benefits will be abolished when the bill comes into effect:

• income-based jobseeker’s allowance under the Jobseekers Act 1995;
• income-related employment and support allowance under Part 1 of the Welfare Reform Act 2007;
• income support under section 124 of the Social Security Contributions and Benefits Act 1992;
• housing benefit under section 130 of that Act;
• council tax benefit under section 131 of that Act;
• child tax credit and working tax credit under the Tax Credits Act 2002
• Disability Living allowance

Who’s entitled?

Both single people and couples are able to apply for the Universal Credit if they meet the basic and financial conditions, as an individual or jointly:

• Over 18
• Under 65
• Not receiving education
• Must accept the DWP Claimant Commitment (Section 62 explanatory notes)

The amount of credit entitlement depends on the claimant/claimants’ needs, including such factors as:

• the fact that a claimant has limited capability for work;
• the fact that a claimant has limited capability for work and work-related activity;
• the fact that a claimant has regular and substantial caring responsibilities for a severely disabled person (35)

Work-related requirements

Depending on personal circumstance, claimants for work-related benefit will be obliged to attend one or all the following (68-77):

• a work-focused interview requirement (see section 15 of Bill);
• a work preparation requirement (see section 16 of Bill);
• a work search requirement (see section 17 of Bill);
• a work availability requirement, i.e. willing immediately to take up paid work or more paid work or better-paid work (see section 18 of Bill)

The work-related requirements which may be imposed on a claimant depend on which of the following groups the claimant falls into:

• no work-related requirements (see section 19 of Bill);
• work-focused interview requirement only (see section 20 of Bill);
• work-focused interview and work preparation requirements only (see section 21 of Bill);
• all work-related requirements (see section 22 of Bill).

Sanctions (86-87) will be put in place should a claimant:

• fails for no good reason to comply with a requirement imposed by the
• Secretary of State under a work preparation requirement to undertake
• a work placement of a prescribed description;
• fails for no good reason to comply with a requirement imposed by the
• Secretary of State under a work search requirement to apply for a
• particular vacancy for paid work;
• fails for no good reason to comply with a work availability requirement
• by not taking up an offer of paid work;
• by reason of misconduct, or voluntarily and for no good reason, ceases
• paid work or loses pay. Universal credit and other benefits

Higher sanctions may cover up to three years of claims.

Those with a limited capacity to work (190) will have to undergo a work capability assessment the details of which are under review following Professor Harrington’s report. Depending on personal circumstance those currently claiming Employment Support Allowance will not have to be reassessed.

Disability Living Allowance

In addition to the Universal Credit, the DWP have also introduced the Personal Independence Payment (337), a non-means tested, non-taxable, cash benefit that will replace Disability Living allowance and mobility support when they are abolished. Claimants under the age of 65, will be able to apply for either or both the daily living component or mobility component. There will be a standard and enhanced rate for this provision which will be determined by medical assessments, details of which will be set out in secondary legislation but the medical examination will determine:

“Whether a person’s ability to carry out daily living activities is limited

a) by the person’s physical or mental condition;

b) whether a person’s ability to carry out daily living activities is severely limited by the person’s physical or mental condition;

c) whether a person’s ability to carry out mobility activities is limited by the person’s physical or mental condition;

d) whether a person’s ability to carry out mobility activities is severely limited by the person’s physical or mental condition” (section 878 of Bill)

The daily living component may fund services such as medical or other treatment which the person is undergoing as an inpatient, accommodation, board, personal care, such other services as may be prescribed (373). Inpatients and those in residential care homes will not be able to apply for the daily living component.

The Government estimates that the introduction of the Universal Credit will cost £2 billion but will result in £7340 million of savings in benefit expenditure between 2012 and 2015.