Welfare mitigations need a significant impact despite tight finances

The Communities Minister Deirdre Hargey has asked a panel to review social security mitigations measures and produce a report by early February 2022.

This review follows the earlier work of a mitigations panel under Eileen Evason in 2016. That panel led to the ‘bedroom tax’ and ‘benefit cap’ for families being introduced but not implemented alongside other mitigations - for example, to protect claimants on a temporary basis while transferring from Disability Living Allowance to Personal Independence Payment. The NI Executive recently agreed to a legislative extension for those mitigations for a further three years.

In 2021/2022 the existing mitigations cost £42.8 million. The new panel (the members of which are listed below) is being asked to look at what further mitigations should be applied over the next three years from 2022/2023. The review was something committed to by the political parties who negotiated the New Decade, New Approach agreement.

There are some significant differences between this review and the one conducted by Eileen Evason and her colleagues. First, unlike the earlier review, no budget has been agreed in advance by the NI Executive.

Second, Universal Credit (UC) has now been rolled out to a significant extent with 116,000 households claiming the benefit.

Third, the two-child policy has been introduced whereby claimants coming on to UC, Child Tax Credit (CTC) or Housing Benefit since April 2017 who have more than two children in their claim will only get financial support for the first two children. This effectively means a loss of up to almost £60 a week for each child over the two-child limit claimed for.

Terms of reference

The terms of reference specifically ask the panel to examine specific issues including the two-child policy, the removal of the recent £20 a week uplift in UC, and a review of Carer’s Allowance with a view to increasing the allowance and amending criteria to allow carers in employment to access the benefit.

The panel is also tasked with considering human rights and equality issues, rural needs, and the impact of any proposals by gender, disability, household composition and the effect on children and other relevant groups. Any recommendations must also outline the cost and the numbers likely to benefit from any new measures.

Given existing mitigations have been agreed for renewal by the NI Executive, there appears little purpose in upsetting the apple cart beyond looking at any potential anomalies that need tackling.

On any new proposals, we will need to model proposals based on forecasting the number of claimants of social security benefits over the next three years. This will include modelling measures already introduced (and in the pipeline) in Scotland.

Those measures include the introduction of the Best Start Grant which provides claimants on certain benefits with £606 towards the cost of a new-born child and a further £303 for further children plus a payment of £250 when a child starts nursery school and another £250 on starting primary school.

In contrast, in NI only £500 is available for a new child’s needs under the Sure Start Maternity Grant scheme with no money for additional children and no child development payments. Since 2010, the Health in Pregnancy Grant has been abolished alongside the withdrawal of additional payments in CTC for a child under one years of age.

Other innovations in Scotland include additional payments for children under 6 years of age (soon to be extended to children up to the age of 16), a twice-yearly lump sum payment to carers on Carer’s Allowance, a young carers grant through an annual lump sum payment and a payment to carers looking after more than one person with a disability.

Approach

To this end, alongside asking the Department’s Professional Services Unit to model the impact of any proposals we are also engaging Landman Economics to assess the cost of applying the additional provision in Scotland and other ideas - and to model the impact by income decile, as well as gender, disability, household composition and other categories.

Our approach is to ensure any proposals are effectively targeted at the one-third to forty per cent lowest income households, on the basis that this will capture particularly well women and individuals with a disability. We know that people with a disability are less likely to be in employment that their non-disabled counterparts, while women and particularly lone parents find it difficult to find well-paid work due to lack of affordable childcare and other factors.

We intend to ensure our work complements the findings of the recent review of the Discretionary Support Scheme (the successor the Social Fund) and sits comfortably with other Departmental strategies, including the anti-poverty strategy.

We will have to be mindful that the withdrawal of the £20 a week uplift in UC was ameliorated by the recent UK budget decision to reduce the taper by which UC is withdrawn from 63 to 55 per cent, and the £500 increase in earnings allowance before a reduction in benefit is applied. These measures significantly assist people on UC who are in work while no soft landing was provided to those on UC not in employment.

We will also build on work done by the NI Human Rights Commission in its Cumulative Impact Assessment of tax and social security reforms from 2010-2022. That report illustrated that no longer implementing the two-child policy would stop the projected eight per cent rise in child poverty over the next three years in its tracks. In November 2019, the cost of doing so was estimated at £56 million a year though the cost is likely to rise as more families are caught by the provision.

Conundrum

Herein, however, lies the conundrum for the panel. Our recommendations must be both realistic and meaningful. The realism is tempered by the fact that any proposals must win the approval of not only Departmental officials and Minister but also the NI Executive.

Any new mitigations will entail fresh legislation and the costs will come from the NI Block Grant. The draft budget document issued by the Department of Finance has ringfenced the existing mitigations for the next three years while making no financial provision for new mitigations.

The debate about whether to retain the £20 a week uplift in UC is instructional. All five political parties in the NI Executive agreed that the UK government should retain the uplift when it was being paid for by the Treasury in London. However, once clear that it was not being retained and that the £110 million a year cost would have to be found locally then political unanimity dissipated. On the other hand, if the recommendations are not meaningful, then how can we expect civic society and the wider public to argue that new mitigations should be introduced.

This leaves the panel with tough choices to make and little time to make them. We are engaging with the voluntary and community sector, DfC staff who manage and implement social security and the political parties. People can also give us their thoughts the NI Direct website.

We will be burning midnight oil - hopefully to good effect - over the next six weeks to ensure the review will make a real difference to the lives of those households on the lowest incomes.

The panel members are:

Les Allamby (chair)

Koualla Yiasouma, NICCY

Kerry Logan, Housing Rights Service

Liam Devine, Clanrye Training Organization

Mark Simpson, Ulster University and UC:Us

Louise Coyle, NI Rural Women’s Network

Criag Harrison, Marie Curie

Sinead McKinley, North Belfast Advice Partnership

Jonathan Portes, King’s College London.