Welfare Reform mitigations must continue

Northern Ireland’s special payments to soften the blow of welfare reform should continue beyond their March 2020 deadline, a Westminster report said this week.

Findings from a joint inquiry by the Committee for Work and Pensions (CWP) and the NI Affairs Committee (NIAC) were published on Monday, and vindicated an ongoing campaign by scores of civic society organisations.

The Cliff Edge NI coalition has been calling for the current mitigations package (or something better) to continue.

Despite the inquiry siding with the campaign, more needs to be done. The Department of Communities set up the current package but, with the Stormont impasse continuing, there is no minister in place and civil servants do not have the power to establish a second tranche of mitigations.

Either an Executive is established (meaning Stormont gets off the ground) and passes suitable measures, or legislation to the same effect moves through the House of Commons (which is what the CWP and NIAC paper recommends, despite noting this is a devolved measure and an unusual mechanism to use).

Per the report: “[T]he circumstances surrounding the package ending are clearly exceptional: a potentially drastic impact on vulnerable people and no Assembly to extend the legislation. There are clear precedents for the UK Government legislating to continue payments, and a political consensus that the main parts of the mitigation package should continue. There is therefore no good reason why the UK Government cannot bring forward legislation to extend the mitigation package.”

Mitigations

The current package, worth £585m, consists mostly of supplementary payments, paid automatically to everyone who is eligible. There are two main types of payment:

• Those making the different between what claimants receive under Universal Credit and what they would have received if the bedroom tax and benefit cap had not applied to them. These are paid for up to four years.
• Those covering the loss of income because of a move from Disability Living Allowance (DLA) to Personal Independence Payments (PIP), paid for up to one year.

There is also a discretionary fund for one-off grants and loans, and funding for independent advice services for claimants.

“The mitigation package was designed on the basis that Northern Ireland faces special circumstances that mean that welfare reforms should not apply there in the same way as in the rest of the UK.  The  clearest example of special circumstances is the nature of Northern Ireland’s social housing stock.

“Less than a fifth of social housing stock in Northern Ireland has only one bedroom, despite single working-age applicants making up 45% of the social housing waiting list. Social housing in Northern  Ireland is also, in practice, segregated along cultural and religious lines. This means  that  the  Social  Sector Size Criteria (“bedroom tax”) would have a disproportionate impact on people in Northern Ireland if mitigations were not in place.

“Whilst the mitigation package is not a long-term solution to underlying problems within the social security system, special circumstances can justify different treatment. By the same token, however, claimants in similar circumstances in different parts of the UK should ultimately level up to similar levels of entitlement.”

Effects

The inquiry paper describes the existing package as a broad success, despite a significant underspend of almost £110m, largely down to the non-allocation of one tranche of the money (due to the absence of an Executive at Stormont).

The inquiry findings state: “There was also a significant underspend in Discretionary Support Awards and the Universal Credit Contingency Fund, which is likely to be because they have restrictive eligibility criteria, such as the income ceiling for Discretionary Support Awards and the requirement that claimants must take out a Universal Credit advance before being eligible for grants from the Universal Credit Contingency Fund. Both these criteria should be removed.”

So, in the opinion of the two Westminster committees, what has gone before has worked well (and come be improved with straightforward changes).

Perhaps the key question, further to this, is what happens if the mitigations period expires without any replacement in situ. In the words of the civic society campaign, what if we go over the cliff edge?

Per the report: “The ending of the mitigation payments in March 2020—in particular, the ending of Social Sector Size Criteria [bedroom tax] and benefit cap mitigations—would mean that over 35,000 households in Northern Ireland  would see their incomes fall suddenly, some by hundreds of pounds per month. According to Department for Communities estimates, the ending of SSSC mitigation would affect around 34,000 households, who would be worse off by an average of £12.50 per week. The ending of benefit cap mitigation would likely affect 1,500 households, who would be worse off by an average of £42 per week.

“A survey by the Department for Communities found that 78% of respondents were not aware of the Welfare Supplementary Payments Scheme—and 69% of SSSC (“bedroom tax”) mitigation recipients were not aware that the payments were due to end. The fact that claimants are not expecting the payments to end will only exacerbate the impact on households.

“Support organisations in Northern Ireland have rightly described this prospect as a “cliff edge”. The special circumstances in Northern Ireland that justified the mitigation package have not changed in the last four years.”

The case for extending (and making improvements) to the mitigations is well made. There should also be great concern about the broad lack of knowledge of Welfare Reform and its consequences, irrespective of whether the mitigations continue or not. This shows the funding for independent advice services is vital but also highlights the need for a more effective information campaign about Universal Credit, PIP and the rest.

There is plenty to be getting on with. Considering Stormont is in absentia and Westminster has its own ongoing turmoil, there is no guarantee that the mitigations will continue.

The Cliff Edge NI coalition is set to keep up the pressure.