Welfare Supplementary Payment (Benefit Cap) Regulations (Northern Ireland) 2016

Executive Committee Business – in the Northern Ireland Assembly at 12:00 pm on 24 October 2016.

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Photo of Paul Givan Paul Givan DUP 12:00, 24 October 2016

I beg to move

That the draft Welfare Supplementary Payment (Benefit Cap) Regulations (Northern Ireland) 2016 be approved.

The regulations are being brought in under article 137 of the Welfare Reform (Northern Ireland) Order 2015 and will make provision for mitigating changes to welfare benefits introduced under article 101 of the Order.

The draft statutory rule was approved by the Communities Committee on 13 October.

The regulations have been made following the publication of the welfare reform mitigations working group proposals on how the Executive should help the most vulnerable in society as a consequence of the introduction of a number of changes to the welfare system. I take the opportunity to thank Professor Evason and her colleagues on the working group for the work completed, in a limited time frame, to bring recommendations to the Executive that were subsequently endorsed on 21 January.

Members may recall that an initial set of mitigating measures that was debated in the House in March this year has now been made. Those regulations — the Welfare Supplementary Payments Regulations (Northern Ireland) 2016 — provided mitigation payments for claimants affected by the introduction of the £26,000 benefit cap that came into effect on 31 May this year. The Westminster Government have already legislated to reduce the benefit cap levels to £20,000 a year for families and £13,400 a year for single people who live outside greater London. Those new benefit cap levels will be introduced in Great Britain on 7 November this year.

The regulations for debate today will enable my Department to implement mitigation payments to claimants with families who are impacted on by the new benefit cap levels, which, it is expected, will also be introduced in Northern Ireland on 7 November. The provisions are to be made by way of amendment to existing regulations, namely the Welfare Supplementary Payments Regulations (Northern Ireland) 2016. The existing regulations allow the Department to make mitigation payments to people with children who are affected by the £26,000 benefit cap. Other than the amendments, which I will now explain, the regulations will not make any changes to the administration of the existing scheme.

The regulations provide for the calculation of a welfare supplementary payment from the date on which the new benefit cap of £20,000 is introduced. For those already affected by the £26,000 benefit cap and receiving a welfare supplementary payment, that means that their payments will be adjusted from 7 November. Families not already affected by the £26,000 benefit cap will be entitled to a payment from the first date that the £20,000 benefit cap applies to them.

There is already a basic requirement that all claimants must be ordinarily resident in Northern Ireland and that they continue to reside here while mitigation payments are made. The regulations will also have the effect of ensuring that payments are made only to those who are resident in Northern Ireland on 6 November 2016. This is a Northern Ireland-specific scheme, so it is important to ensure that mitigation payments can be accessed only by claimants from Northern Ireland who have been affected by the welfare reforms.

As Members are aware, the Fresh Start working group recommended that only families with children affected by the benefit cap should receive a mitigation payment. That means that couples and single people without children who are affected by the benefit cap will not receive a welfare supplementary payment. Those claimants will, however, be able to apply for financial support through discretionary housing payments. Discretionary housing payments are extra payments to help people pay their rent.

The Department is currently delivering mitigation payments for the £26,000 benefit cap, as proposed by the working group. The provisions in the regulations will ensure that that important financial support is extended to the many vulnerable people who will be affected by this further welfare reform, while remaining within the agreed budget.

The new benefit cap will restrict the total amount of benefit paid to families to £20,000, and the cap will be applied through a claimant's housing benefit. The main out-of-work and child-related benefits that are included when calculating the benefit cap are jobseeker's allowance (JSA), income support and employment and support allowance (ESA), except where the support component has been awarded. A household is exempt from the benefit cap if it is entitled to working tax credits, carer's allowance or a range of disability-related benefits. Guardian's allowance will also become an exemption from 7 November 2016.

Mitigation payments will be made to families who receive more than £20,000 a year, provided that they have been continuously in receipt of any combination of the welfare benefits that contribute to the calculation of the benefit cap from 6 November 2016 until the point at which they are impacted on by the £20,000 benefit cap. That will include families who may initially have been exempt but later lose that exemption and are impacted on by the £20,000 benefit cap and families who are initially below the benefit cap level but for whom a change in circumstances later causes their benefit income to exceed the £20,000 benefit cap.

Claimants will receive a payment equal to the amount by which their benefit is capped, so there will effectively be no loss of benefit. These payments are transitional in nature and are intended to assist claimants with the transition from the current benefit system to the new welfare system. The mitigation scheme is due to end on 31 March 2020.

Households will continue to receive welfare supplementary payments at the same level unless the amount by which their housing benefit is capped is reduced. Further measures, which were recommended by the working group to mitigate welfare reform, are currently being prepared with a view to these being presented to the Executive in the coming months. These include provisions to mitigate the social sector size criteria and a new cost-of-work allowance scheme.

Photo of Colum Eastwood Colum Eastwood Social Democratic and Labour Party

These regulations are the latest in a series that provide the legal basis for the implementation of the mitigation measures recommended by the welfare reform mitigation measures working group led by Professor Eileen Evason. While we have distinct differences about the overall approach to welfare reform, as it is called, it did provide some assurance when the package of mitigation measures was agreed.

Many of us, in all parties, were concerned about the potential for the benefit cap to cause hardship to those on benefits, particularly to families. That cap of £26,000 was introduced in May of this year. However, we will soon be in a position, come 7 November, where the benefit cap will be reduced further. Just to be clear, the new cap for families will be £20,000, and for single people and couples without children it will be £13,400. In DWP-speak, this is to make the benefits system fairer and to incentivise people into full-time employment, but personally, I am not sure about that. I suppose not being able to feed or clothe your family or heat your home is as draconian an incentive as you can get.

The Department has advised that an estimated 2,600 households will be impacted by the new cap. It is important to note that the mitigation payments which the regulations will allow for will only apply to families with children, as per the recommendation of the working group. Couples without children and single people without dependants will not receive a mitigation payment. A mitigation payment will also apply only to those people in receipt of benefit on the day before the cap comes in. In other words, new claims on or after 7 November will not be subject to mitigation payments. This means that, although any current welfare supplementary payments based on the £26,000 cap will end and future payments for families will be based on the £20,000 cap mitigation, mitigation payments will make up the difference, unless, that is, the applicant’s circumstances change. It is important to note that the mitigation payments will only be paid until 31 March 2020, as long as a person’s circumstances do not change in that time. <BR/>It is also important to consider how the Department communicates these changes to people who are affected by the revised cap. Members of the Committee have raised this with officials on several occasions and have suggested sending a single letter to people to highlight the change that applies to them and the mitigation measures if applicable. It is also important to consider whether the Department should provide, for example, an annual reminder to those in receipt of payments noting that they are scheduled to end by 31 March 2020.

The Committee has been told that people who will be impacted by the new cap but who will not receive a mitigation payment can apply for a discretionary housing payment to make up the shortfall in their rent. It seems that the discretionary housing payment is the Department’s key safety net for people whose benefits will be reduced. After March 2020, this fund, in lieu of any other arrangements, may well be under considerable pressure. Perhaps the Minister could comment on the current pressures on that fund, whether he anticipates it will increase and for what period, on average, awards from this fund are given. Also, does he have any concerns about people falling into rent arrears as a result of the welfare changes, and is he considering any other contingencies to prevent this and therefore reduce the potential risk of increased homelessness?

The mitigation measures are important to help people with families in the short term, and the Committee agrees that the Assembly should affirm these regulations. However, consideration needs to be given to what type of welfare system we want and can afford post-March 2020. I encourage the Minister to start that work sooner rather than later.

Photo of Roy Beggs Roy Beggs UUP 12:15, 24 October 2016

Since 31 May, there has been a benefit cap introduced into Northern Ireland at £26,000 for families. However, since the legislative consent motion, there has been little point in our discussing the merits or otherwise of the policy behind that because with that motion, which was approved with DUP and Sinn Féin support, the authority to set the policy in this area has been passed to Westminster. So, what we are talking about today is purely mitigation.

We need to look at what is being proposed here. Certainly it follows the Evason report in trying to protect some of those who would be most significantly affected by the changes as a result of this further reduction in benefits, with the cap being reduced to £20,000.

It would be helpful if the Minister could tell us what the estimated total cost to the annual budget will be for each of the remaining years of this Assembly. Again, what are the detailed eligibility criteria; and, if not all households are entitled, is there an alternative in place to support them? In particular, can he clarify the situation regarding new claimants?

It would also be helpful if the Minister advised, as was said by Mr Eastwood, on the work he has undertaken to plan beyond 2020 or, if there is nothing planned, how he is going to communicate that fact to those who would be affected so that they can start to plan accordingly.

Photo of Michelle Gildernew Michelle Gildernew Sinn Féin

I support the motion. While I have listened carefully to other Members' contributions, the important thing to remember is that we are dealing with a British Tory party which is hell bent on austerity. We had a very difficult negotiation with the British Government for a long number of months a year or two ago.

The fact remains that there is not a bottomless pit of money. We have done our best to mitigate the worst ravages of this. It was important to protect families with children. I suppose we are concerned about the impact that it will have and I look forward to hearing the Minister's responses to some of the questions here today. I welcome the fact that families with children are being protected. It is incumbent upon us as an Assembly to do all we can to try to alleviate child poverty and take children out of poverty. I think that that has to be a priority for this Assembly.

Photo of Paul Givan Paul Givan DUP

I am grateful for the consensus expressed around the Assembly in respect of these regulations. Let me thank Mr Eastwood and his Committee for the way in which they have been able to deal with the regulations. Obviously, it is critically important that we get these improved, given that the impact will start on 7 November. This was put through the Executive successfully, and the Committee had its scrutiny role, so I am grateful that we have been able to introduce these regulations in time to provide the support that I know all of us in the Chamber want to provide.

As stated, the regulations will allow us to implement mitigation payments to assist claimants who are impacted by the revised benefit cap of £20,000. These measures are unique to Northern Ireland. I think that other jurisdictions look with envy at the way in which Northern Ireland has been able to put together a series of mitigation measures in respect of welfare reform. Whilst I accept an element of what Mr Beggs said in respect of these issues being dealt with at Westminster, obviously we have our own proposals to deal with it. <BR/>I draw the Member's attention to the fact that the reduction from £26,000 to £20,000 is a result of Conservative Party policy that his party signed up to when it ran joint candidates. The fact that the Assembly has had to introduce a series of — indeed, half a billion pounds' worth — mitigation measures flows from the proposals that the Ulster Unionist Party, when it had candidates, signed up to. It said that it would take the whip of the Conservative Party in London had any of its members been elected at that time. I appreciate that none of its members did get elected, but I draw that to the Member's attention. I value the scrutiny role that they have, but it is always important to go back to the genesis of these issues: Conservative Party policy that was supported by the Ulster Unionist Party in 2010.

I am pleased that we are putting together a very significant mitigation package that will go some way to alleviating the hardship that is being inflicted upon the people as a result of the Ulster Unionists', Conservative and Lib Dem, supported by the Alliance Party at the time, proposals.

[Interruption.]

The Executive can rightly take credit for putting together a proposal of half a billion pounds to alleviate some of the worst impacts that the Ulster Unionist Party signed up to. I appreciate that some Members do not like the truth, but it is important that the Ulster Unionists look back at the way in which they supported the 2010 Conservative Party. That is what we have to deal with.

There will be further implications as a result of the policies that the present Conservative Party is taking through Westminster. Those need to be grappled with, and the Executive will need to consider those issues in due course, but I am pleased that we were able to put together the regulation that is going through the Assembly today. It will provide £1 million this year to mitigate, and there will then be £8 million in each of the subsequent three years after it is implemented to help vulnerable people in our society who need support and whom the Executive have decided to support. I am grateful for the support of Members across the House.

Question put and agreed to. Resolved:

That the draft Welfare Supplementary Payment (Benefit Cap) Regulations (Northern Ireland) 2016 be approved.