Government plans for the benefit system

1
Government plans for the benefit systemcurrent
benefit rules for people trying work

• Judy Scott
• independent consultant

2
Take care!

• The Benefit system is extremely complex.
• If Social Enterprise members have a problem with
  getting their benefits because of work they must
  get independent professional Welfare Rights
  Advice and representation.
• (i.e. Citizens Advice Bureau)
• The benefit system can and does stop peoples
  benefits wrongly by mistake.

3
The Green PaperA New Deal for welfare
Empowering people to work

• Aims
• reduce by 1 million the number on incapacity
  benefits
• increase by 1 million the number of older workers
  
• help 300,000 lone parents into work

• New claimants for ill-health or disability from
  2008 will
• be assessed by Personal Capability Assessment
  within 3 months.
• Incapacity and capability assessment
• if pass the new benefit is Employment and
  Support Allowance
• Lone parents and older workers no change of
  benefits

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government strategy

• Reduce the number of people leaving jobs due to
  illness or disability
• reduce the likelihood of people developing health
  problems
• work with employers
• amend SSP
• promote Health and Safety
• train GPs to offer options to return to work
  rather than sick certificate
• package of measures Direct Payments, Access to
  Work

• Increase the number leaving benefits for jobs
• new benefit for sick and disabled conditional
  -requires work related activity (unless exempted)
• and pays extra if comply
• if claimant refuses without perceived good reason
  benefits are cut (to 57.45)
• voluntary work, Permitted Work, basic skills
  training (literacy and numeracy), Jobsearch
• Pathways to Work roll out by private sector
  (payment by outcome)

5
Employment and Support Allowance two
groups(for new claimants replaces Incapacity
Benefit, SDA, Income Support for incapacity)

• Those thought able work after rehabilitation
• Subject to conditionality
• claimants action plans
• must engage in work related activity (if not good
  reason) to qualify for increment (24 pw approx
  to reach current average rate)
• Quotes
• Rights and responsibilities
• Worklessness is a social injustice inflicted by
  poverty trap of benefit dependency
• Encourage to fulfil potential achieve a better
  life, in work

• 2. Those with most severe conditions severity of
  the impact of illness on ability to function
  (i.e. not blind people)
• Not subject to conditionality
• Can volunteer for work related activity
• Benefit at same or higher rate than now.
• Group likely to be smaller than those currently
  exempt from medical reviews

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Claimants action plan examples

• Compulsory
• Work tasters
• work trials
• voluntary work
• Permitted Work
• Preparation for self-employment
• Improving employability
• basic skills programme
• Jobcentre Plus or external training programmes
• over 50s confidence in work

• Encouraged but not compulsory
• Managing health in work
• Condition management
• Progress to Work programme
• NHS Expert Patients programme
• Stabilising life
• Activities to stabilise health conditions i.e
  cognitive behavioural therapy
• Childcare options
• Financial management
• Stabilising housing situation

7
Gateway to the new benefitPersonal Capability
Assessment

• Personal Capability Assessment
• being reviewed over 10 weeks for outline
  legislation (was 18 months)
• 5 committees set up to look at all conditions
• recognised no assessment process for learning
  disability or autistic spectrum disorders
• mental health assessment thought unreliable
  Lord Layard report raised PMs concern that
  common mental health problems on the increase

• All Personal Capability Assessments
• UK PCA recognised as being one of the toughest in
  world
• Transform to
• provide an assessment based on functional
  capability
• identifies those capable of work-related activity
  and support to get them back to work
• those so disadvantaged it would be unreasonable
  to require work related activity

8
Pathways to Work Programme rolled out nationally
by 2008

• Pathways to Work offers
• work focused interviews (compulsory) starting 8
  weeks after first claim
• action plans
• support to find job
• health condition management
• (NHS linked in)
• 40 extra for first year in new job

• BUT
• Pathways to Work to be rolled out by private and
  voluntary sector
• Payment by outcome
• (people into jobs count)
• Funding for roll out described as
• to be found from savings after Jobcentre Plus
  job cuts of 30,000 staff
• and 5 cut year on year

9
Multiple concerns of disability organisations

• Target numbers of people into work unachievable
  without major economic expansion
• Current job vacancies
• 625 thousand
• Proposed numbers into employment or off
  incapacity
• 1 million sick/disabled
• 1 million over 50 years
• 300 thousand lone parents
• Pool of 900 thousand unemployed
• Five people for every job vacancy

• Spin conceals different agenda
• Benefit rates to be reduced
• (age additions removed, other rates not
  announced)
• Numbers on incapacity benefits to be reduced by
  pushing more onto Jobseekers Allowance
• Review of PCA intended to stem flow of people
  with common mental health problems claiming 82 a
  week rather than 57.45
• Benefit system will be more complex (7 types of
  incapacity benefit)

10
Part-time paid workthe benefit rules

• Means tested benefits
• Jobseekers Allowance
• Jobseekers Allowance with DLA
• Income Support
• Income Support with a disability premium
• Income Support for less than one year because of
  health issues
• Income Support as a lone parent or carer
• Housing Benefit
• Council Tax Benefit

• All means tested benefits
• have an earnings disregard limit attached
• earnings disregards are different to Permitted
  Work rules

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Earnings disregard limits per week

• Jobseekers Allowance 5 a week
• Jobseekers Allowance with DLA 20
• Income Support for less than one year because of
  health issues
• 5 a week
• Income Support with a disability premium 20
• Income Support as a lone parent or carer 20
• Earning over the limit is deducted from benefit
• Shared with a partner if any

• Housing Benefit according to the other benefits
  that you get
• (IB or SDA or IS with dp 20)
• Council Tax Benefit according to the other
  benefits that you get.
• (IB or SDA or IS with dp 20)
• Earnings are deducted from Jobseekers Allowance
  or Income Support first
• If not receiving Jobseekers Allowance or Income
  Support
• Earnings over limit are deducted _at_
• 65 pence off Housing Benefit
• 20 pence off Council Tax Benefit

12
Permitted Work for people claiming incapacity
based benefits

• Only Permitted Work allowed for claimants of
• Incapacity Benefit
• Severe Disablement Allowance
• Income Support for incapacity (and after one year
  with a disability premium)
• Housing and Council Tax Benefits with a
  disability premium
• NI credits for ill-health or disability
• MUST keep to rules

• NOW 4 options for people claiming incapacity
  based benefits
• 1) Permitted work lower level
• Earn up to 20 week
• 2) Permitted work if exempt from medical reviews
  (severe condition) Earn up to 81 a week
• 3) Supported Permitted work
• Earn up to 81 a week
• 4) Permitted work higher level
• Earn up to 81 a week for 12 months

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Permitted Work options

• Option 1)
• Permitted work lower level
• Earn up to 20 a week
• Employed or self-employed
• Earnings may be averaged if paid in arrears or
  over cycle of work
• No need to notify Jobcentre Plus
• when start (Legislation says)
• Must notify Jobcentre Plus before work stops
• (for Work Focused interview trigger)

• Minimum Wage of 5.05 hour applies
• limits hours of paid work at 20 a week to
• less than 4 hrs. per week
• (3 hrs 57.5minutes)

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Permitted Work options

• Option 2) (NEW)
• Permitted work for people who are exempt from
  PCA (repeated medical reviews)
• Earn up to 81 a week
• Employed or self-employed
• Earnings averaged if paid in arrears or cycle
• Notify Jobcentre Plus on PW1 form as soon as
  possible
• Less than 16 hours paid work allowed
• No time limit

• Work can be anywhere
• In a workshop
• In community group
• In business
• Any type of work

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Permitted Work options

• Option 3)
• Supported Permitted work
• Earn up to 81 a week
• Employed or self-employed
• Earnings averaged if paid in arrears or cycle
• Notify Jobcentre Plus on PW1 form as soon as
  possible
• Less than 16 hours paid work allowed
• No time limit

• Work can be anywhere
• In a workshop
• In community group
• In business
• Any type of work
• Must have a Support Worker
• Employment support staff can be the nominated
  Support Worker

16
Permitted Work options

• Supported Permitted work continued
• Support worker must be external and employed by
  public or local authority or voluntary
  organisation and not a buddy in same employment
• OR
• Work must be in sheltered workshop (no Support
  Worker needed)
• OR
• Working as part of hospital treatment programme
  as in or out-patient (no Support Worker needed)

• Support must be ongoing and regular.
• Frequency of contact up to you
• and Support worker to decide
• Can be on phone or face to face
• Little as weekly or monthly phone call may be
  acceptable to Jobcentre Plus
• (Must get this agreed beforehand)

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Permitted Work options

• Option 4)
• Permitted Work higher level
• (NOW EXTENDED)
• Earn up to 81 a week
• Employed or self-employed
• Earnings averaged if paid in arrears
• Notify Jobcentre Plus as soon as is possible
• Less than 16 hrs paid work allowed
• NOW time limited to 12 months (used to be 6
  months)

• Work recommended by Jobcentre Plus staff as
  likely to improve chances of employment.
• End of one year on Permitted Work earning 81
  must stop
• Can either get full-time job off benefits or
  reduce working hours to the 20 lower limit
• Can transfer during year
• Wait for 52 weeks before Permitted Work higher
  level available again

18
Who can earn and keep 81 a week without benefits
being affected?

• People who receive either
• Incapacity Benefit or
• Severe Disablement Allowance
• and
• do not receive a means tested benefit
• can earn and keep all of 81 a week

• People with a partner in work who pays all the
  housing costs
• People who have no housing costs
• People who live with a Carer who pays for the
  housing costs
• may be able to earn and keep
• 81 a week

19
Earnings may be treated as averaged

• Earnings may be treated as averaged according to
  benefit rules when
• earnings are calculated by taking an average of
  earnings over 5 weeks, or
• another cycle of work, or
• the pay period where pay is in arrears
• (Payments for one occasion only are unlikely to
  be treated as averaged)
• (Payments made the same day are unlikely to be
  treated as averaged)

• If 20 a week is the limit
• Week one earn 40.00
• (10 hr x 4 hrs)
• Week two earn 0
• Week three earn 40
• (10 hr x 4 hrs)
• Week four earn 0
• Pay day fourth week 80
• Average earnings over four weeks 20 a week
• MUST GET JOBCENTRE PLUS AGREEMENT FIRST

20
Voluntary work

• In theory
• full-time voluntary work is allowed.
• Voluntary work is defined as work done of own
  free will without pay or expectation of pay.
  Free to come and go.
• People must notify Jobcentre before starts.
• If claiming Jobseekers Allowance must get prior
  agreement.

• In practice
• for people claiming incapacity based benefits
• it is recommended that they do not volunteer for
  16 hours or more because ..
• if voluntary work is planned for 16 hours or
  more a week OR resembles ordinary employment the
  Jobcentre Plus may send them for a medical review
• They may have their incapacity benefits stopped
  because volunteering proved they could work

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Some reimbursed expenses can be treated as
earnings

• Expenses that are
• wholly, necessarily and exclusively incurred in
  the course of paid work or voluntary work
• will be ignored for the purposes of calculating
  benefit entitlement
• Volunteers can be reimbursed
• travel costs from home to work
• the costs of subsistence if this is during the
  voluntary work

• BUT
• paid workers have reimbursed costs of
• travel from home to work treated as earnings
• subsistence treated as earnings
• You can provide tickets, travel cards or
  transport without affecting benefits
• You can provide a meal without affecting benefits
  if it is during the working day.

22
Dont round up reimbursed expenses!

• Dont round up reimbursed expenses for
  volunteers. If you round up the amount
• the whole amount is treated as earnings by the
  benefit system
• the volunteer will be treated as a paid worker by
  the benefit system
• your organisation that paid the rounded up
  amount could be treated as an employer (in
  employment law) the minimum wage rate becomes
  payable per hour worked

• Always pay the exact amount
• If fares are 5.90 pence dont pay 6.00

23
Part-time work on benefits and employment law

• Organisation making payments for work or
  involvement must
• provide terms and conditions of employment
• provide at least 4 weeks statutory holiday pay
  pro-rata
• Not required to pay
• sick pay when wages under NI threshold 84 a week
• maternity or paternity pay when wages under the
  NI threshold

• Part-time paid work is subject to Minimum Wage
  rate
• Age 22 years is 5.05 hour
• If mutual obligation and paid Minimum Wage
  applies. Workers are subject to employment law
• Part-time Workers Prevention of Less Favourable
  Treatment
• Disability Discrimination Act
• Health Safety at Work

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Getting a job after a claim to incapacity benefits

• New improved benefit Linking Rule protects all
  existing benefit entitlements
• From October 2006 the Linking Rule will
  automatically protect all incapacity based
  benefits for two years if you get a job
• No registration needed
• You qualify after 28 weeks on either Statutory
  Sick Pay or incapacity benefits

• Working Tax Credit is paid to people on a low
  wage coming off incapacity benefits
• Working Tax Credit adds about 74 a week to a low
  wage of around the minimum wage rate for 16 hours
  a week.
• However Housing Benefit and Council Tax Benefit
  are sharply reduced when income (wages plus the
  Working Tax Credit) rises above 116 a week.

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Further information and advice

• The Disability Alliance publish
• the way to work guide all about benefits and
  work
• by Judy Scott and Daphne Hall
• Disability Rights Handbook (comprehensive guide
  to the benefits system)
• 0207 247 8776
• www.disabilityalliance.org
• National Bureau for Students with Disabilities
• advise on grants, loans, benefit rules
  www.skill.org.uk

• Paying a real wage to people in work projects
• This is a guide for Social Enterprises
• by Judy Scott
• Published by the MCCH Society 01622 769100 (PP
  cost only)
• www.mcch.co.uk
• Judy Scott
• independent consultant
• judyscottconsult_at_btinternet.com
• .