Benefit cuts: The day of reckoning draws near

Mother with three young childrenApril 2013 is D-day for literally millions of people who rely on welfare benefits or tax credits to help make ends meet.  Next month, a whole raft of cuts and changes to the benefits system start to come into force, and the impact will be felt by some of the poorest and most vulnerable families across the country.

Iain Duncan Smith, the Work and Pensions Secretary, has heralded the reforms as the biggest for six decades and claims that people will be lifted out of poverty as a result and that lower and middle income families will be better off as a result. But with £18 billion being cut from the benefits budget, the reality for many individuals and families is not so promising.

In a timely intervention, the new Archbishop of Canterbury, Justin Welby has led calls for the Government to abandon the worst of the cuts which will impact most severely on the poorest and most vulnerable.

Most of us find it hard to comprehend the scale of the Government’s welfare reform programme.  But make no mistake, for millions of families directly affected, the impacts will be real and lasting. Many in our own churches and communities will see their incomes go down over the coming months, in some cases by hundreds – or even thousands of pounds a year.  It is therefore incumbent on all of us to try to try and understand at least the basics:

Six and a half million households will lose out as a result of the Government’s decision to uprate most benefits by just one percent for each of the next three years.  With inflation running at over 2.5 percent, families will cut in the real value of their benefits of up to £215 a year by 2015.  More immediately, those reliant on income support or Jobseekers Allowance will receive a meagre 70 pence more a week from April to help them to cover the extra costs of food, fuel and other household essentials.

Over three million low income families will be affected by the abolition of the current system of Council Tax Benefit.  Although families in Scotland and Wales have been protected from the changes, from April each local council in England will be responsible for devising their own system of Council Tax support – but with ten percent less money.  As a result, from April, hundreds of thousands of families on low incomes will be required to pay the majority of poorer Council Tax payers of working age will for the first time have to pay between £96 and £300 a year in Council Tax.  Worst affected will be single parents who work part time and depend on childcare.

Up to 660,000 families and single people will lose an average of £14 a week as a result of the so called ‘bedroom tax’. If you rent from a Council or housing association, and your home is considered to be ‘too big’ for you, your Housing Benefit will be reduced by up to a quarter.  Two children of the same sex under 16 will be expected to share a bedroom, as will two children under 10, regardless of their sex. The bedroom tax takes no account of disabled people’s adapted homes, of foster parents who need rooms to take children in, or of parents sharing custody who will lose the room for their child at weekends. Although the Government hopes that this will ‘encourage’ people to move to smaller properties, many will struggle to do so – because there are simply not enough one and two bedroom houses available in large parts of the country.

Around 67,000 families will be affected by the ‘benefit cap’ of £500 per week, more than half in Greater London.  The majority are larger families, with 3 or more children, who face the unenviable choice of staying put and running up huge debts – or uprooting their families and moving to cheaper parts of the country – with the damage that may do, not least to childrens’ schooling.

April also sees a major change in disability benefits, with Disabled Living Allowance (DLA) being replaced by new ‘Personal Independence Payments’.  In time all current DLA claimants will be re-assessed, and as many are 400,000 people are expected to lose their entitlement to mobility payments, or to lose support altogether.

Last and by no means list, April also sees the start of the biggest change of all – the introduction of Universal Credit.  By 2017, upwards of six million working age people will see their existing benefits and Tax Credits replaced by a single Universal Credit payment.  Whilst some will see their incomes increase – significant numbers will also ultimately see their benefit levels go down.  In a cost saving exercise, most people will be expected to apply for Universal Credit on-line.  This may not be easy for people who do not have easy access to the internet – and the likelihood of people making mistakes in their applications, which may delay or even invalidate their claims, are also high. There are also very real concerns that the move from fortnightly to monthly payments will make it much harder for families to make ends meet.

Many of these numbers involved are truly mind boggling.  In Birmingham, 30,000 are estimated to be affected by the Housing Benefit changes alone; in Barnsley, 3,700 will lose benefits and £33 million will be lost from the local economy; in Plymouth one in five of the total population will be affected by welfare reform in one way or another.

For each and every individual or family affected, in cities, towns and villages across the country, the result will be to see their wallets and purses squeezed as never before. For many there is no further room for ‘belt tightening’ and it will increasingly be a stark choice – do I heat or eat?  Do I pay the bills or feed the children?

The numbers turning to churches and foodbanks or falling prey to the extortionate and irresponsible practices of payday lenders – are almost certainly going to escalate dramatically in the coming months.

You have been warned.

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8 Responses to Benefit cuts: The day of reckoning draws near

  1. Tim Watkins-Idle says:

    Don’t forget also that government cuts- to legal aid and elsewhere- mean that lots of advice centres are either closing completely or reducing their services, so people will have a lot fewer- if any- places to turn.

  2. Steph. Pennells says:

    I rather doubt the MP or Chancellor will be going walkabout in Manchester in the foreseeable future.

  3. d.browne says:

    …and still we all sleep walk into oblivion-convinced that our current standard of living can be maintained whilst ignoring the plight of the poor and vulnerable in our society.

  4. Thanks for this. Very informative and will reblog 🙂

  5. Pingback: Benefit cuts: The day of reckoning draws near | A Fair Say

  6. Pingback: The cumulative impact of benefit cuts | A New Place Of Exile

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