What the Welfare Reform Bill means for you
Yesterday the Welfare Reform Bill returned to the House of Commons for debate. This follows the Lords stage earlier this week when Lords voted to make changes to the Bill including amendments on Employment and Support Allowance and the benefit cap.
The MPs voted to reject these changes – using a little known rule called ‘financial privilege’. This rule allows the House of Commons to overrule the Lords on legislation relating strongly to spending.
The vote yesterday does not mean the Bill is Act yet, but it does make it difficult to make further changes to the Bill.
There has been a lot of discussion on these issues in the last few weeks and some of the reports have been confusing, inaccurate and have added to people’s concerns about the changes. We have therefore picked out some of the key things you need to know from the Welfare Reform Bill as it stands:
1. One year time limit for contributory Employment and Support Allowance (ESA)
People who are placed in the Work Related Activity Group (WRAG) for ESA will now have their entitlement for the benefit time limited to one year. People will then be assessed under the rules for income-based ESA. It is expected this change will come in from April 2012 and any time people have already spent claiming contributory ESA in the WRAG will be taken into account. This change does not affect people in the Support Group.
Please see our section on Employment And Support Allowance here.
2. Personal Independence Payment (PIP)
This new benefit will replace Disability Living Allowance from April 2013. One of the important changes is that there will be a new face to face assessment to work out if people are eligible for the benefit. There may also be reassessments to check if the level of benefit you are entitled to has increased or decreased. The Government intends that the new system will be better for people affected by mental illness and we will be watching the development of the new benefit closely to make sure this is the case.
3. Universal Credit
Universal Credit brings a number of other working age benefits together into one single payment and will be introduced from April 2013. This will not include DLA or the new PIP. The Universal Credit allows you to earn a certain amount of money before it affects your benefits and once you earn over a certain amount, your benefits are reduced gradually rather than removed all at once. This means that people will be able to take on some earnings from work if they wish to without losing all their benefits.
4. Benefits cap
The Welfare Reform Bill proposes that the amount of benefit any household can receive is capped at the average household income for working families (currently being discussed as £26,000). The benefit cap will not apply to people who receive Disability Living Allowance or the new Personal Independence Payment.
5. Single room rate
Although not part of the Welfare Reform Bill, there has been a change in the way Housing Benefit is calculated for people under 35. From January 2012, people under 35 will now be entitled to Housing Benefit based on the price of a room in a shared house, rather than a one bedroom property.
If you are concerned about any of the changes or want advice on your individual circumstances, please contact the Advice and Information Service at Rethink Mental Illness: