Welfare Reform Bill - briefing - Feb 2011

On 17 February 2011, the government launched the Welfare Reform Bill. The Bill represents a significant overhaul of the welfare benefit system and will have a significant impact on both Londoners and London boroughs. The key proposal within the Bill is the introduction of the Universal Credit, which will bring together most benefits for working age people into a single benefit stream.  This briefing outlines the main reforms in the Bill and how they will impact on the Capital.

The Bill follows on from the White Paper “Universal Credit: welfare that works” and contains many of its proposals. These include:

• The introduction of a Universal Credit for working age households (both in and out of work), replacing the current range of income related benefits, and making it simpler for households to manage the move into work.
• New provisions that will allow most households to keep more of their earnings when they move into work.
• The capping of benefit paid to those not working, with the exception of those with caring responsibilities or who are unfit for work, to ensure their income does not exceed that of an average working household.
• Reinforcing that benefit entitlement is conditional on taking all reasonable steps to move into employment. Failure to do so could result in sanctions and financial penalties.
• The abolition of Council Tax Benefit, with plans to localise the scheme.
• Making changes to the Social Fund to localise some provision and provide greater local accountability.

The Bill also includes changes not covered directly within the previous White Paper:

• Strengthening the fight against fraud through tougher penalties and the creation of a single fraud investigation service.
• The replacement of Disability Living Allowance for new and existing claimants with a Personal Independence Payment.
• Improvements to data sharing between central and local government, relaxing the requirements on customer consent and introducing a more streamlined process for handling information.

The proposal in the White Paper to reduce housing benefit by 10 percent for people on Jobseekers Allowance who are still out of work after 12 months has been dropped from the legislation.