Government Welfare Cap to be imposed this Autumn in Cornwall

The Government is has been rather quiet on its next phase of the Welfare Reforms which involves the introduction of a benefit cap. This cap will come into effect from autumn this year. It will affect residents who live in our communities in Cornwall.

As part of the Welfare Reform and Work Act 2016, the current benefit cap levels are being reduced nationally in autumn 2016.  An exact date is still to be confirmed by the Department for Work and Pensions (DWP), although it is expected to be implemented nationally from November this year.

The new benefit cap levels will be:

  • £384.62 per week (£20,000 a year) for a family or couple
  • £384.62 per week (£20,000 a year) for a single person with children living with them
  • £257.69 per week (£13,400 a year) for a single person

The Benefits included in the new cap limits are:

  • Housing Benefit (HB)
  • Child Benefit
  • Child Tax Credit
  • Incapacity Benefit, severe disability allowance, maternity allowance, bereavement benefit and widows benefit
  • Jobseekers Allowance, Income Support and Employment Support Allowance (assessment phase and work related activity   group)

Anyone in receipt of the following benefits and allowances will be exempt from the cap:

  • Working tax credit (receipt of or meeting the qualifying conditions for)
  • Disability Living Allowance, Personal Independence Payments, Attendance Allowance, Industrial Injuries Benefit
  • Employment Support Allowance Support Component
  • Armed Forces Compensation Scheme
  • War Pension Scheme
  • Carers Allowance*
  • Guardian’s Allowance*

*Carers Allowance and Guardians Allowance are currently counted as part of the benefit cap, however the DWP has stated there will be a change of legislation to make both of these benefits exempt.

The DWP has written to all customers nationally who are likely to be affected by the new benefit cap levels.  In Cornwall, based on current data, 625 customers are likely to be impacted, with 84 of those affect reside in Cornwall Housing properties. This figure includes those customers whose Housing Benefit is currently capped.

A leaflet has been made available: leaflet/bite size guide.  Information is available on Cornwall Council’s website: www.cornwall.gov.uk/benefitcap, and will also be available in libraries, one stop shops, and GP surgeries in the form of a leaflet with key information and contact details.

If you feel you be affected by these chances, Cornwall Council has advisors ready to discuss options with residents on 0300 1234 121 option 5.

Changes to the Council Tax Benefit scheme

Cornwall Council is proposing pretty big changes to the Council Tax Benefit scheme from April 2013. In Cornwall Council’s defence, these changes have been forced upon the council by central Government. I have blogged before on some other changes to the benefits system HERE.

From next year, the council will be running a system called Localised Council Tax Support (CTS) scheme. The funding that is currently being received from the Government is set to be reduced by around 12.5%; which in money terms it equates to £6m. That is a pretty big hit to take.

The council is undertaking a consultation to hear your views on the proposed changes. Which if you want to take part (and you should) the survey can be accessed HERE. Though one question was a little odd and I have not seen before. This was ‘are you still the same gender as when you were born’.

There are a few options, but one option of ‘do nothing’ has already been ruled out. The other options are:

Option two – Limiting benefit available to 70%

Introduce a scheme that offers a maximum 70% rather than 100% support for people who receive benefit towards their council tax. Everyone of working age who receives council tax benefit would have to pay at least 30% towards their bill. This scheme is intended to be self financing from within the reduced Government funding that is being passed onto Cornwall Council and would ensure other essential council services or council tax payers would not be adversely affected.

Option three – Changing some council tax benefit measures

Change a number of measures to help make the scheme easier to administer and therefore more efficient, including:

  • Remove the ‘second adult rebate’ scheme which prevents a householder from receiving a ‘single person reduction’ on their council tax because they have another adult, on a low-income, living in their property.
  • Reduce the ‘capital limit’ someone is allowed to have and still be able to receive council tax benefit from £16,000 to £6,000
  • Limit entitlement to a maximum of council tax band D preventing people who live in houses in a higher council tax band from claiming a higher benefit.
  • Remove the ability to ‘backdate’ an award of a benefit to when it is applied for.
  • Remove ‘underlying entitlement’ to recover overpayments when someone has failed to notify the Council of something relevant to their claim.

Cornwall Council’s preferred option

After considering the options above we are suggesting that the best solution, given the time we have available, is option two plus the measures outlined in option three: that all working age recipients of council tax benefit should pay an additional 30% contribution towards their council tax i.e. receive less support than the previous council tax benefit scheme, in order to make the new scheme affordable within the reduced Government grant.

What do you think? Will this change or the change of other benefits like Universal Credit effect you? Times are already hard for people in Cornwall, and this change to Council Tax could put far more people into poverty.

However, there is a real cause for concern, as in Alex Folkes’ Blog he say’s the council could actually make money out of the change. If correct, I find that most unsettling because while I understand Cornwall Council has been forced by the Government into these changes, it should not make extra money out of it.

The real solution in getting people off benefits is for people to be paid real wages, then there would be less reliance on the benefit system.