#UKGovNews ” Universal Credit the Pro’s and Con’s of `Employer’ and `Employees’Rights”

#AcePressRelease Lord Freud `Discusses how Universal Credit' will help Employee's  work more hours and calls on Employers' to champion the new benefit' 

It’s a pleasure to be here today to tell you about Universal Credit.

Universal Credit is rolling out across the country now and building momentum as the number of claimants rises.

It’s a fundamental overhaul of our benefits system that puts work at its very centre. It aims to make work pay and most crucially – create a system that is flexible and responsive to the modern labour market.

This flexibility could be really important in increasing your productivity. It will give you the opportunity to meet business peaks and troughs using your existing staff and you should find more people willing to take on irregular work.

It is part of the government’s long-term economic plan to help more people into work and we’re incredibly pleased with last week’s figures showing a large drop in unemployment. But there’s much more to do. And Universal Credit is a big part of that.

Learning lessons – what claimants are saying

We’re learning lessons as we extend the new system and this is feeding into our plans for when larger numbers of people start to make claims.

Early indications tell us people are positive about Universal Credit. 65% of those who previously claimed Jobseeker’s Allowance think that Universal Credit is a better financial incentive to work and they spend twice as many hours per week looking for work compared to those on JSA. That’s real progress.

Roll-out schedule

Employers I’ve spoken to are welcoming the benefits Universal Credit will bring to their businesses. They say it will be easier to recruit and develop staff as their employees will be better prepared for work and be more flexible with their hours.

I’d like to tell you more about our long-term plans for Universal Credit: Over the next 2 years Universal Credit will expand in scope and scale. Current plans are that during 2016 all new benefit claims will be for Universal Credit instead of legacy benefits such as Jobseeker’s Allowance or Housing Benefit. The vast majority of remaining claimants will then move onto Universal Credit during 2016 and 2017.

For those of you with branches or bases in the north-west of England, you will be particularly interested to know that Universal Credit will start to expand to cover more of the north-west by the end of this year. Employers such as Blue Arrow and Premier Inn are already working with Job centre Plus to prepare for this.

Universal Credit is totally different to the current benefits and tax credits system. It supports claimants seamlessly, both in and out of work. The smooth taper means their Universal Credit payment decreases gradually as their earnings rise – so their overall income goes up as they work more. What this means is your employees will be able to agree to more work without worrying about what it means for their benefits – because under Universal Credit they will be better off working more.

Impact on employers

So let’s move onto the key benefits of Universal Credit for employers.

Firstly, we’ve abolished the 16 hour rule. This artificial tipping point where you can claim Jobseeker’s Allowance and work up to a maximum of 16 hours prevents many people increasing their hours. They fear losing their safety net, their benefits – and if their hours change – being short of money whilst reclaiming benefit. Many of you have employees who are restricted in this way. Universal Credit has no such limits.

Secondly, the new PAYE in real time system has been designed to support Universal Credit payments. 99% of employers are now reporting their PAYE in real time every month. Not only does it prevent fraud, it ensures that every person who is in work on Universal Credit has their award automatically adjusted every month, based on these returns. So it’s absolutely crucial that you as employers report this accurately, as this will affect the payments of claimants.

Thirdly, Universal Credit claimants keep more money in their pocket for every pound they earn. That’s at least 35 pence in every pound compared to JSA claimants who cannot earn more than £5 a week before having it deducted against their benefits.

Blue Arrow told us they’ve had numerous candidates turn down offers of work as they would lose benefits, or were unwilling to sign off and sign back on again. They say Universal Credit will make it easier to recruit – particularly when it comes to part-time positions or for temporary work.

Finally, claimants apply for Universal Credit online and are paid monthly. This will include money for housing costs, childcare costs, and additional costs such as caring. So they’ll develop the budgeting skills and IT skills employers look for in their staff – and it will help them to adjust to monthly payments, the way most employers pay their staff.

What all of this means for employers is that you’ll have a more flexible workforce both in your existing employees and in potential recruits. I’m going to be upfront with you – it is certainly possible that those of you in certain sectors have built up HR structures around the 16 hour rule – such as care, retail or hospitality – and you will need to change them as this rule disappears and your employees can be much more flexible.

Specific groups in more detail

In fact, Universal Credit is already having a big impact on the kind of people you all employ – people with caring responsibilities, young people – and those for whom work has not just been worthwhile.

People for whom work is not attractive

It will help these people who have not found work – or working more – to be very attractive in the past. The current system can trap people on benefits – just the sheer complexity of moving off one benefit and onto another when going into work is a real barrier for some people. This complex system just does not reflect the modern workforce where hours can change from week to week.

Under Universal Credit, the benefit payment adjusts depending on earnings month-to-month. It also lets people take up short-time work without closing down their claim. This means they can accept a job for one month and know they won’t have to reclaim when that job ends.

Our Universal Credit claimants are already seeing the positives of this approach: Craig, a job seeker in Rugby said:

Universal Credit is much easier to use than Jobseeker’s as you don’t have the hassle of starting a rapid reclaim. Since starting my claim I have had part-time work and in the past you stress over the reclaim.

Another claimant Greg, who took up short-term work at Christmas, said:

It was good to know that my Universal Credit claim wouldn’t be closed. Anything that comes along – just give it a try!

Under Jobseeker’s Allowance, it would have been a difficult decision to take up these jobs. Now they have something else to put on their CV as they continue to look for full-time work.

Young people

Universal Credit will particularly help young people under 25. Nearly 7 out of 10 claimants receiving the new benefit are aged between 16 and 24. We’ve committed to increasing youth employment and Universal Credit is a key platform of this policy, alongside Youth Contract and apprenticeships, which the Minister for Employment spoke about earlier.

Under 25’s, who are currently excluded from Tax Credits, will receive this in-work support under Universal Credit. Getting a short-term job or a work experience placement is now so much easier as they’ll continue to claim Universal Credit – the payment will be adjusted automatically depending on how much they are earning.

Take Ben, one of our first Universal Credit claimants, aged 19 – after intensive preparation with his work coach, he started work experience for a fortnight and was taken on this month as an apprentice by Delta Laminates, a manufacturer in Wigan. He is one of the first Universal Credit claimants to qualify for a wage incentive.

Lone parents

Lone parents will benefit greatly in Universal Credit. There’s a whole range of benefits and add-ons designed for lone parents, but it is a complex system which hasn’t been working well enough to help them manage the transition into work.

Universal Credit will give them much greater financial incentives to move into work, and instead of claiming Child Tax Credit, Housing Benefit and Working Tax Credits, they will receive one Universal Credit payment.

We have announced an additional £200 million in childcare payments for those needing it and we’re determined to find the best solutions for parents with childcare issues to help them once they are in work.

People with caring responsibilities

Employers are recognising that for those who have other commitments, Universal Credit will bring much-needed flexibility. B&Q are supportive of the changes it will bring for their staff, in particular those who have caring responsibilities. Carers will be able to flex their hours up and down around their commitments and earn more, rather than be restricted to a certain amount of hours.

Progression theory – in-work conditionality

We’re improving the way we set conditionality for job seekers. The new Claimant Commitment mirrors an employment contract, setting out clearly what a job seeker needs to do and the consequences of failing to meet their side of the deal. All Universal Credit claims include it and by spring it will cover all new Jobseeker’s Allowance claims.

Under Universal Credit, because there are no limits to the number of hours a person can work, we also need to include some in-work conditionality, so that unlike the current Tax Credit system, people are encouraged to progress and, with time, move off benefits. The in-work progression pilots are looking at the best ways of achieving this.

11 Job-centre Plus led pilots are running across England, Scotland and Wales. We are encouraging people to consider work beyond their first part-time job – to think about the skills they will need in the longer term.

You are a key component in this. We’ve ramped up apprenticeships and work incentives to help you train recruits in the skills that you need in your industries. As the economy grows, as labour market conditions improve and with your ongoing engagement we can ensure that once in work people can develop their skills and gradually become financially independent.

Engaging with employers, zero hours

I’m really pleased we’re engaging with you in the delivery of Universal Credit: I’m meeting with local employers in roll out areas; we’re working with you on in work conditionality and we’re consulting with trade bodies and employer organisations on how best to communicate Universal Credit to employers.

In the north-west we’re working with some large employers such as Premier Inn to specifically recruit Universal Credit claimants.

Some of you have asked about zero hours – these contracts support business flexibility, they provide entry to work for young people and give people the flexibility to combine work with other commitments, but they need to be fair. Universal Credit is not prescriptive about the hours people work, provided they are able to earn enough to support themselves and their families without undue reliance on state benefits, and a zero-hours contract may well be consistent with that, particularly where people have work flexibly for a number of employers.

The Department for Business, Innovation and Skills has an ongoing zero hours employment contracts consultation which closes in March, so do take part and give your views on how zero hours can be sensibly regulated.

Conclusion

So we’re introducing Universal Credit gradually, learning lessons as we go along, freeing up the labour market and making sure work pays for every person, and we’re working with you to help people become financially independent.

Universal Credit is a fundamental reform – we hope you will champion it – to make the most of the benefits it offers – flexible, supported labour. We need to get more people into work. And Universal Credit will help people into work, stay in work and progress in work.

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UK: `New Migrant Job-seekers from the European Economic Area (EEA)’ will no longer be able to get`Housing Benefit’ from April 2014″

#AceNewsServices says Press Release New Migrant Job-seekers from the European Economic Area (EEA)' will no longer be able to get Housing Benefit‘ from April 2014.

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New migrant job-seekers from the European Economic Area (EEA) will no longer be able to get Housing Benefit (HB) from April, Work and Pensions Secretary Iain Duncan Smith announced on (20 January 2014).

The government is determined to cap welfare and reduce immigration as part of Britain’s long-term economic plan and ministers want to make sure the system is fair for hard-working taxpayers.

From the start of April, new EEA job-seekers will no longer be able to access Housing Benefit if they are claiming income-based Jobseeker’s Allowance (JSA).

This builds on new rules introduced in January which mean EEA migrants cannot claim income-based Jobseeker’s Allowance until they have been in the country for three months.

English: Iain Duncan Smith, British politician...

English: Iain Duncan Smith, British politician and former leader of the Conservative Party. (Photo credit: Wikipedia)

Work and Pensions Secretary Iain Duncan Smith said:

As part of the government’s long-term economic plan we have taken action to make sure our economy delivers for people who want to work hard and play by the rules.

These reforms will ensure we have a fair system – one which provides support for genuine workers and job-seekers, but does not allow people to come to our country and take advantage of our benefits system.

The British public are rightly concerned that migrants should contribute to this country, and not be drawn here by the attractiveness of our benefits system.

The Housing Benefit changes do not affect UK and Irish Republic nationals, or EEA migrants genuinely self-employed or in a job. EEA nationals who have worked in the UK, and are subsequently made redundant and claim JSA, will not be affected by this measure.

As part of the government’s long-term economic plan to get people off benefits and into work, a series of reforms have been put in place to make sure migrants wanting to come to this country do everything they can to find a job and stay in work.

Other measures recently introduced include:

From 1 January all EEA job-seekers have to wait for 3 months before they can get income-based JSA. This will make sure that only people who have a clear commitment to the UK and plan to contribute to the economy have access to our welfare system.

After 3 months, job-seekers will also have to take a stronger, more robust Habitual Residence Test if they want to claim income-based JSA.

If they pass the Habitual Residence Test, EEA job-seekers will then only be able to get JSA for 6 months. After 6 months, only those who have a job offer or compelling evidence that they have a genuine chance of finding work will be able to continue claiming.

This week, the government will set out how reforms to welfare and immigration are helping to build a stronger, more competitive, economy that will secure a better future for Britain. Ministers are determined to fix the welfare system to make sure more people can get into work and benefit from the security that a job brings.

 

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#Public Information: For the Elderly About Cold-Weather Payments During this Winter

New figures show that the government has spent over £706 million since 2010 with 28 million Cold Weather Payments during the winter.

WinterAs the first icy blasts of cold weather set in, new figures reveal that the government has spent over £706 million since 2010 with 28 million Cold Weather Payments helping those most in need keep warm during the depths of winter.

Payments are made automatically to those who qualify when temperatures are forecast to plummet, including poorer pensioners, disabled adults and children, and families with children under 5 who receive an income-related benefit.

Cold Weather Payments are made for each 7-day period of very cold weather – if temperatures are recorded as, or forecast to be, zero degrees celsius or below over 7 consecutive days.

Department for Work and Pensions Minister Steve Webb said:

We are absolutely committed to helping the poorest pensioners and those most susceptible to the cold. We permanently increased Cold Weather Payments to £25 a week to help them heat their homes when it’s really cold, and have paid out over £706m since 2010 on this support.

People who get Pension Credit are automatically paid Cold Weather Payments, and in the cold winter days ahead it’s even more important that older people check if they are entitled so they don’t miss out on Cold Weather Payments. If anyone thinks a family member, a friend or neighbour might be entitled to Pension Credit, I’d encourage them to ask them to get in touch and find out by calling – 0800 99 1234.

More information

Statistics on Cold Weather Payments since 2010, based on Social Fund Annual Reports, are below.

Scotland Wales England Great Britain
2010/11 Number of payments 3,757,900 754,800 12,719,500 17,232,200
Expenditure (£) £93,947,500 £18,870,000 £317,991,425 £430,808,925
Number of recipients 776,300 182,100 3,110,900 4,069,300
2011/12 Number of payments 72,500 124,100 4,970,300 5,166,900
Expenditure (£) £1,812,500 £3,102,500 £124,257,500 £129,172,500
Number of recipients 49,600 62,400 3,057,400 3,169,400
2012/13 Number of payments 306,600 253,100 5,285,300 5,845,000
Expenditure (£) £7,665,000 £6,327,500 £132,132,500 £146,125,000
Number of recipients 133,600 75,700 3,081,500 3,290,800
£ Totals £103,425,000 £28,300,000 £574,381,425 £706,106,425

Over this period 28,244,100 million payments were made.

The figures for Wales and Scotland only include those from weather stations which cover areas entirely in each of Wales and Scotland ; weather station areas which straddle the Wales/England or Scotland/England borders are included in the figures for England, so it is possible they include some under-reporting in Wales and Scotland border regions, and consequent over-reporting for England.

The number of payments and number of individuals are rounded to the nearest 1,000, expenditure figures are rounded to the nearest £100,000.

Information on payments and expenditure against individual weather stations is published each year in the Social Fund Annual Report.

Over 1 million pensioners may be entitled to Pension Credit worth up to £2.8bn (2009/10) who are not claiming it. People can claim Pension Credit, as well as Housing Benefit, in one free phone call on – 0800 99 1234 without the need to sign a form.

Winter Fuel Payments also provide a valuable contribution to help older people with fuel bills in the colder winter months. Winter Fuel Payments are paid to more than 9 million households. The payment is £200 for households with someone over women’s State Pension age and £300 for those with someone aged 80 and over.

Around 2 million households receive assistance each year through the Warm Home Discount scheme; and well over 1 million of the poorest pensioners will receive a discount of £135 off their energy bill in winter 2013/14.

#cold-weather-payments, #department-for-work-and-pensions, #england, #housing-benefit, #pension-credit, #scotland, #social-fund-annual-report, #steve-webb, #wales, #weather, #weather-station

Reducing Council Tax Benefit Will Benefit Government

Bill of Benefits

Bill of Benefits (Photo credit: judge_mental)

This was a snippet of  news picked up just a while ago, that interested me as to the ramifications! It seems that this was a joint decision by the coalition on the surface of it, but the full article on the this story, reveals a lot more!

Anyway here is the extract firstly courtesy of the IFS and Paul Johnson:

The Institute for Fiscal Studies has warned that poor families are set to have their council tax benefits cut due to the Coalition telling councils to cut their benefit bills by 10%. IFS chief Paul Johnson said: “They could decide to take 10% off the current cost of council tax benefit, which means some council tax recipients will be worse off. It’s quite hard to do this without affecting those who receive 100% council tax benefit – the very poorest.” Labour peer Baroness Hollis said the proposals were “deeply unfair”.

Under the present situation these rules apply and provide these guidelines:

Council Tax Benefit: key facts about the current system
Council Tax Benefit (CTB) provides means-tested help to people on a low income who have to pay Council Tax. For working age people there is a limit on savings of £16,000. If you claim means-tested out-of-work benefits (Income Support, Jobseeker’s Allowance and Employment and Support Allowance) you generally receive full assistance, so that you do not pay Council Tax at all. If you are in work or have other income you can still receive CTB but are likely to get less than the full amount, so that your Council Tax bill will be reduced but not eliminated.

A more generous system applies to pensioners. If you claim Pension Credit (guarantee element) there is no limit on the amount of savings you can have and you will normally not pay Council Tax at all. Pensioners with higher incomes can also qualify, even if they do not get Pension Credit, and depending on their circumstances can qualify with an income of £400 a week or more. Around 60% of pensioners are entitled to CTB, though many fail to claim.

Under the new system whereby the amount of benefit is cut by 10% these rules would be drastically amended:

The government’s reform proposals: 

The government’s consultation paper makes the following proposals:
 Help with Council Tax will be a local authority responsibility and will not become part of Universal Credit (as DWP and some commentators have urged)
 The amount provided to local authorities for the new system will be 10% less than current spending on CTB
 Support for pensioners will not be affected by this cut in spending and will remain at existing levels with existing rules
Local authorities will be free to establish whatever rules they choose for their schemes for working age people (and will administer the scheme for pensioners using national rules)
 Central government will provide a fixed amount of money to local authorities to operate their new schemes. Unlike current arrangements, this central government grant will not be ring-fenced and will not vary according to demand
 New local schemes to provide help with paying Council Tax must be in place by April 2013
The consultation paper only directly affects England and separate proposals are likely to be made in Wales and Scotland. However, the 10% spending reduction affects all parts of Great Britain and in the analysis below and in the Annex it is assumed that Wales and Scotland follow suit in protecting the position of pensioners.

Impact of the expenditure cut:

When the new system of local support for Council Tax is introduced in April 2013 the amount provided to local authorities will be reduced by 10% relative to current expenditure on CTB, saving around £480 million a year. However, characterising this as a 10% cut is disingenuous, as pensioners are in effect excluded from the new system. In terms of the population of working age claimants, who are the only ones that can be affected by new rules, the cut is much larger than 10%.
The national picture is shown in the table below. It shows the kinds of people who are currently claiming CTB and how this relates to the savings target of £480 million. Working age people are divided into those who are receiving full CTB, almost all of whom will be claiming claim means-tested out-of-work benefits (Income Support, Jobseeker’s Allowance and Employment and Support Allowance), low earners who are receiving some CTB but have to pay some Council Tax themselves, and other people who are receiving some CTB but are not in work.

Options for meeting the savings target: ‘equal pain’
As shown by the analysis above, local authorities have to make very large savings from working age claimants to meet the government’s savings target. One approach to this would be to impose an ‘equal pain’ rule and reduce all benefit payments by the same proportion (19% on average nationally). However, for those claimants currently getting full CTB this would mean starting to collect Council Tax from a group who currently pay nothing. Moreover, the reason they do not pay anything at the moment is because they qualify for means-tested benefits like Income Support, where by definition the amount of money they have to live on is at ‘safety net’ levels.
Local authorities have some experience of the difficulty of extracting small amounts of money from people living in poverty. The ill-fated Community Charge (or ‘Poll Tax’) of the early 1990s imposed a minimum 20% charge on all citizens, whatever their income or status, so that local authorities had to trace and collect money from everyone living in their locality. While the property base for Council Tax will make the task somewhat easier, that experience shows the difficulty with moving away from full rebates for the poorest. Administering the system is likely to be expensive, with many of the 2 million people now expected to pay likely to opt for weekly or monthly payments, and there is always the possibility of mass non-compliance, as occurred with the Poll Tax.

It may therefore make more sense to look at completely removing entitlement to help with Council Tax from some groups. As well as helping with the administrative problems outlined above, this approach has two advantages. First, it means that particularly vulnerable groups, such as people with disabilities or children, can be protected from the cuts. Second, it is the most effective way of increasing work incentives for particular groups, as it will make them poorer when unemployed and no worse-off when in employment.

Options for meeting the sales target – removing entitlement for some groups!

There are a number of groups who might be candidates for removing from entitlement altogether. For instance, one possibility would be to restrict eligibility for support to tenants, so that owner occupiers were expected to pay the full amount of Council Tax whatever their circumstances. In terms of collection it might be possible to treat unpaid Council Tax as a charge against the value of the property, so that people who could not pay would effectively find arrears added to their mortgage. And low earning owner-occupiers are one of the main groups to benefit from Universal Credit, enjoying help with mortgage payments where none is available currently, creating a further reason for treating this group less favourably. Around 1.5 million CTB claimants are owner-occupiers, and though the majority of these are likely to be pensioners it is likely that removing entitlement from this group would be just about sufficient to meet the savings target.
However, a criterion based on tenure-type would necessarily affect claimants with children or disabilities, two groups who local authorities would hope to protect (and, in the former case, which they have a statutory duty to protect under child poverty legislation). A more attractive route might therefore be to remove from Council Tax support all working age people who do not meet certain criteria, such as having dependent children, living in a household where someone is disabled, being pregnant or a full-time carer. Such conditions would largely mirror the conditions for claiming Income Support and Employment and Support Allowance, so that in effect claimants of Jobseeker’s Allowance would be excluded from the scheme. Nationally around 600,000 people receive full CTB because they are claiming income-based Jobseeker’s Allowance, though around 20% of these have dependent children. Subtracting claimants with children, the likely saving nationally from removing Jobseeker’s Allowance claimants would be around £420 million, and once savings on working non-disabled childless people are included it is likely that the saving target would be met.

The harshness of such an approach cannot be denied. A single unemployed person without children or disabilities currently receives £67.50 a week to live on, and forcing them to pay Council Tax would reduce this to closer to £50 a week. It is difficult to see how they will make ends meet, and collection of Council Tax from this group is likely to be a severe problem. Nevertheless, maintaining support for people with children or disabilities, and avoiding the potential administrative nightmare of imposing ‘equal pain’, will necessarily involve making difficult choices such as this!

Slides from the DWP workshop on the changes in...

Slides from the DWP workshop on the changes in Housing Benefit (Photo credit: solobasssteve)

#council-tax, #ctb, #housing-benefit, #income-support, #institute-for-fiscal-studies, #local-government, #pension-credit, #universal-credit