The Impact of Welfare Reform Bethany Eckley Research Manager,
Church Urban Fund June 2013
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Mission: to transform the lives of the poorest and the most
marginalised in England.
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Overview 1.It All Adds Up: cumulative, financial impact of
welfare reforms. 2.The Human Cost of Welfare Reform: broader impact
on peoples everyday lives.
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1. Financial impact of reforms Case studies simulate
tax-benefit changes 2010 17 Methodology: Figures adjusted using RPI
Gross earnings rise with inflation Rents rise by 4% pa Hholds move
to Universal Credit in 2016/17
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Mark and Sarah Mark is a full-time cook, earning 25,000 pa.
Sarah looks after their three children. They live in a private
property in east London.
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Gain 450 per year increased tax allowances Gain 240 per year
freeze in Council Tax charges Lose 1,470 per year reductions in tax
credits Lose 1,760 per year changes to Housing Benefit Lose 400 per
year changes to Child Benefit Mark and Sarah: = loss of 3,000
pa
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Mark and Sarahs annual disposable income (after housing costs),
2010/11 to 2016/17. - 13% - 5% Signifying a 13% reduction in five
years.
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Sam Single man of working- age. Disabled, but moves from
incapacity benefit to JSA. A local authority tenant in the north
east.
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Continues without earnings Loses 1,750 per year the move to JSA
Loses 470 per year the bedroom tax Loses 140 per year a Council Tax
charge Sam: = loss of 2,300 pa
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Sams annual disposable income (after housing costs), 2010/11 to
2016/17 Signifying a 44% reduction in five years. - 44%- 45%
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Representative? Mark and Sarah: 5-7% average reduction for
families with children (IFS 2013). Sam: 1.5m reassessed by 2014, so
far one in three judged fit for work. 420,000 disabled people
affected by bedroom tax.
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2. The human cost of welfare reform 19 interviews at ten church
or faith- based community organisations. To understand impact of
reforms on peoples every day lives. To reflect on how churches
might best support those affected.
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Incapacity Benefits Jobseekers Allowance Work Capability
Assessment Impact of changes to disability benefits Employment and
Support Allowance
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The biggest change is the move from ESA onto JSA. Now I would
say personally that in many cases it is a good thing... But some of
them that are being forced onto Jobseekers arent well and they cant
cope and those are the ones that we help.
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Those correctly found fit for work: the difficulty of moving
into employment.
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Those incorrectly found fit for work: appealing the
decision.
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Impact of changes to Housing Benefit From April 2011, a cap on
Local Housing Allowance: 230 per week, one bedroom 290 per week,
two bedroom 340 per week, three bedroom 400 per week, four bedroom
From April 2013, the bedroom tax: 14% less eligible rent for one
spare bedroom 25% less for two or more spare bedrooms
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Some of our families from the school have been completely moved
out of the area because of the housing benefit changes... They've
gone all over the place, but miles away... And of course theyre
still travelling into school because their whole network is here.
Families moving home, leaving support networks behind.
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Families struggling with the bedroom tax.
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For me, the biggest issue is the lack of compassion in the
changes that are taking effect. Amongst the people making the
decisions, there is either a refusal or an inability to understand
that when you change something at the top, it is the people at the
bottom of the food chain that it hits the hardest, and it hits
quickest.
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Church-based responses Three groups affected by specific
reforms: 1.Former incapacity benefit claimants who need to move
into employment. 2.Former incapacity benefit claimants wrongly
judged as fit for work. 3.Households affected by Housing Benefit
changes.
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ChallengesPossible church-based responses Short-termReduction
or delay in benefit payments. In-kind support Cash support
Transitional Overcoming barriers to employment: poor CV or job
application writing skills; access to computers for job searches;
cost or lack of public transport; childcare costs. Running job
clubs Providing access to computers Setting up car shares
Increasing availability of childcare Long-termLack of self-esteem,
qualifications or skills.Confidence building courses Offering
training opportunities Hosting voluntary placements Former
incapacity benefit claimants who need to move into employment
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Together: we can help to transform the lives of the poorest and
most marginalised in England.