IRRV virtual conference 2020: COVID-19 who has fallen between the gaps?

IRRV Virtual Annual Conference
2020

IRRV Virtual Annual Conference 2020
Zoe Charlesworth
Director of Policy and Operations
Policy in Practice
COVID-19: Who has fallen
between the gaps?

IRRV Virtual Annual Conference 2020
Presenter - Zoe Charlesworth
Curriculum Vitae:
Zoe Charlesworth, Director of Policy and Operations at Policy in
Practice, has worked in the field of welfare benefits for over 20 years
and has a comprehensive knowledge of benefit policy and regulation.
She has practical experience and policy knowledge of council tax
support schemes including administrative processes, drivers of
scheme design, award calculation, and service delivery.
Zoe has an extensive understanding of regulation and practice of both
legacy benefits and Universal Credit. She has previously been a
Benefit Manager and a Revenues and Benefit Manager with
responsibility for council tax support and benefit delivery, at three
local authorities. She understands the business of local government
and the role of local delivery of support through her work in local
authorities, the Association of District Councils, and the Local
Government Association.
Zoe has published numerous articles on welfare benefits and has
spoken extensively on the impact of welfare policy and the impact of
Universal Credit on localised council tax support.

www.policyinpractice.co.uk
A team of professionals with extensive knowledge of the welfare
system. We’re passionate about making social policy work
We help over 100 local authorities use their household level
data to identify vulnerable households, target support and track
their interventions
Our benefit calculator engages over 10,000 people each day.
We identify the steps people can take to increase their income,
lower their costs and build their financial resilience
Policy in Practice: What we do

COVID-19: Who has fallen
between the gaps?

A climate of change and uncertainty
In the 6 weeks to 12 April 2020 DWP
received over 1.8 million declarations to
Universal Credit. This is almost 5 times
higher than declarations received from
people in the same period last year.
Claims rose to 2.7 million by July.
By August 9.6 million people were on
furlough
Since April 750,000 people have lost
their job (OBR)

And it’s not going away
Forthcoming changes
● 10% of furloughed workers likely to be made redundant by October 2020
(OBR)
● End of Self Employed Income Support (October 2020)
● Minimum Income Floor to be reinstated
● Emergency benefit increases to end
● Brexit

Recap on measures put in place
www.policyinpractice.co.uk/coronavirus

Measure 1: Job Retention Scheme
Ran from March 2020 and will close on 31 October 2020.
● Wide coverage including students and those with no recourse to public funds
● Now ended for new applications. Employers can only continue to claim
through the scheme if they have previously furloughed the employee for 3
consecutive weeks between March 1 and 30 June and submitted the claim
before 31 July
● Winding down for those currently on furlough
○ I July applied to workers returning part time
○ August - employer pays NI and pension, Sept - Employer pays 10%,
October - employer pays 20%
● Employee always receives 80% of their contracted pay.
● Some employees fell through the gaps due to the day of starting work or
because the employer did not want to engage with the scheme.

Measure 2: Self-employed Income
Support
Open until 19 October 2020
● Open to people who completed a self-employed tax return for 2018/19 and
self-employment is > 50% of taxable income. Or over the last 3 years. First
SEISS grant closed on 13 July 2020.Second grant available if the business
has been adversely affected on or after 14 July 2020
● Applicants must claim for the second grant before 19 October 2020
● Second grant worth 70% of average monthly trading profits, paid in single
instalment covering 3 months’ worth of profits, and capped at £6,570
● Grant paid as a lump sum and counts as business income for tax credit and
UC purposes
● A significant proportion of low income self-employed did not meet the
criteria

Measure 3: Job Support Scheme
Announced 24 September. Starts 1 November 2020 for 6 months
● Employers can claim from December 2020 and paid on a monthly basis.
● Employee must be on PAYE payroll on or before 23 September 2020.
● Employee must work at least 33% of their usual hours but do not have to be
working the same pattern each month
● For every hour not worked by the employee, the Government and employer
will pay a third each of the usual hourly wage. The Government contribution
will be capped at £697.92 a month.
● Employees earn a minimum of 77% of their normal wages (except where the
Government contribution has been capped)
● Similar scheme for self-employed - Government paying 20% of monthly
income as a grant.

Measure 3: Job Support Scheme
There are some concerns
● Employers contribution is higher - how will employers react? Will they just
retain fewer full time workers?
● How is viability determined?
● Those on PAYE after 23 September cannot be supported
● Self-employed see a significant reduction in support
● Will suspension of MIF continue alongside these measures?
● The number requiring support through benefits is likely to increase

Measure 4: Means-tested benefit
changes
● From April 2020 the basic allowance in Universal Credit and Tax Credits
increased by £20/week (no change to IS/ESA/JSA)
● To help private renters the cap on rental costs, the Local Housing Allowance
(the LHA), was increased to align with the 30th percentile of local rents
● To support the self-employed, Universal Credit awards are based on actual
income rather than a notional income (the Minimum Income Floor)
● Tax Credit hours and self-employed rules are suspended until end Oct 2020
Additional changes
● DWP overpayment recovery suspended (reinstated July 2020)
● Change to claim procedure: phone and online (partially reinstated July 2020)
● WCA suspended (partially reintroduced July 2020)
● Sanctions and conditionality suspended (but reintroduced July 2020)

Gaps in provision (1)
Those not meeting the new scheme provisions
● If under £16,000 savings then directed to UC, CTR, FSM, food vouchers
No Recourse to Public Funds
● Cannot claim UC (but are eligible for Covid support schemes and NI
contributory benefits), but partner can claim based on single person entitlement
● If sick with Covid19, can get medical support (no immigration status checking)
● Government issued guidelines to LAs to include within homelessness support
Students without parental support
● Cannot claim UC (but are eligible for Covid support schemes and NI
contributory benefits)
● LA homelessness support

Gaps in provision (2): Households in
receipt of legacy benefits
Data analysis on a representational dataset showed that as a result of the
Universal Credit measures:
● Households in receipt of Universal Credit whose bills are higher than their
monthly income will fall from 16% of households to 10%
● The average increase in Universal Credit awards as a result of changes
coming into effect from April 2020 will be £98/month, an increase of 7.3%

Impact 1: Legacy vs Universal Credit

Gaps in provision (3) those who should
not move to UC
Some groups who need personal advice
● Households where someone is in receipt of Working Tax Credit
- UC may be more attractive BUT in-work conditionality and no run-on
● Households where someone is self-employed
- assess impact of reinstatement of MIF
- surplus earnings
● Households where someone is in receipt of Employment and Support
Allowance (ESA)
- currently appealing against a Work Capability Assessment
- Permitted work up to 16 hours

Gaps in provision (3) those who should
not move to UC
● People who would lose if the £20 Covid-19 weekly support is removed
● Households where someone is in receipt of disability benefits
- those with disability element and carers element will only get one element
under UC
- child disability will lose £30/week
● Households in LA areas with less generous CT schemes
● Non-UK nationals
- Stricter Habitual Residency Test
- Those from Republic of Ireland or with EEA settled status may consider the
move to UC.
● Under 25s currently receiving ESA or with children

Gaps in provision (4): interaction of
LHA rise and the benefit cap
Outside London In London

Gaps in provision (4): interaction of
LHA rise and the benefit cap
Impact on local authorities
● DHPs - can LA support these additional claims?
● Welfare support for children
● Impact on homelessness - meeting the LHA is linked to homelessness

Gaps in provision (5): Differences in
CTR & Hardship Fund support
Inequitable Council Tax support and discretionary Hardship Fund
LA with 100% CTRS and CT charge of £100/month:
● Claimant pays no Council Tax
● LA retains the majority of the Government funding for discretionary welfare
LA with 40% basic scheme and CT charge of £100/month
● Claimant still pays £27.50/month
● LA has little left for discretionary support although the claimants need the
most support
Welfare organisations need to understand the specific local situation

Gaps in provision (6): Surplus earnings
reducing SEIS grant support
Single person self-employed income is
now £0, receives £1,000 UC/month
Nil UC threshold = (£1,000*0.63)+ WA £0
+ threshold £2,500 = £3,130/month
From March to September this claimant
receives £12,103
Without the grant they would have received £7,000. So the grant is worth £5,103
(not £7,500)
There are implications for advisors due to complexity, and for claimants as they
need to know to reclaim

What will the future provision be?
The future is uncertain. As well as Covid-19 we have:
1. Impact of new announcements
- Job Support Scheme from 1st Nov for 6 months
- SEIS (new scheme with grant based on 20% of income)
- Payment of £500 for those self-isolating contacted by test and trace
1. Brexit
2. Retention of increased benefits, LHA change and suspension of MIF?
3. Return of austerity (pension changes currently ruled out)

What will the future provision be?
Understanding the impact of all these future changes is critical
● Understand likely impact on local residents
● Understand the impact on councils budgets and collection rates
● Identifying those at risk of crisis
● Maximising household income
Councils have the data to plan for the future and to make evidence-based
decisions on supporting residents

Please visit our virtual stand to:
● Download more information
● Get our contact details
● Enter our prize draw

Thank you
Zoe Charlesworth
Director of Policy and Operations
zoe@policyinpractice.co.uk
@ZoeCharleswort1
hello@policyinpractice.co.uk
0330 0889242

IRRV virtual conference 2020: COVID-19 who has fallen between the gaps?

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IRRV virtual conference 2020: COVID-19 who has fallen between the gaps?