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Budget 2015 update

£12 BILLION BENEFITS CUTS REACHED
Osborne says:

“Taken together, all the welfare reforms I’ve announced will save £12 billion by 2019/20 and will be legislated for in the year ahead, starting in the ‘Welfare Reform and Work Bill’ that will be published tomorrow.”

SOCIAL HOUSING
Rents in social housing sector to be reduced by 1% a year for the next four years.

Social housing tenants who earn more than £40,000 in London or £30,000 outside london will be forced to pay the market rent for their home.

TAX CREDITS
Income threshold at which tax credits start to be withdrawn to be reduced from £6,420 to £3,850. The taper rate will be raised to 48%. Income rise disregard will be reduced from £5,000 to £2,500.

Support from tax credits and universal credit will be limited to two children. Families who have a third or subsequent child after 2017 will not receive additional payments for that child.

'Similar changes' to be made for housing benefit.

Tax credit spending will be returned to 2007/08 levels in real terms.

HOUSEHOLD BENEFITS CAP
The household benefit cap will be lowered from £26,000 nationally to £23,000 in London and £20,000 in the rest of the UK. The DWP’s very conservative estimate is that an additional 90,000 households will be hit and that an additional 40,000 children will be forced into poverty as a result. Many families are likely to face eviction.

SUPPORT FOR MORTGAGE INTEREST PAYMENTS
Support for mortgage interest payments changes from a benefit to a loan

WORKING AGE BENEFITS
Working age benefits to be frozen for 4 years. PIP, DLA and ESA support group excluded from freeze.

ESA
ESA Work-related activity group . For future claimants only, ESA WRAG will be paid at same rate as JSA.  Osborne says:

"No current claimants will be affected by this change"

BENEFIT CUTS
Osborne says:

“The welfare system should always support the elderly, the vulnerable and disabled people.”

“We will not tax or means-test disability benefits.”

“Those who can work will be expected to look for work and take it when it is offered.The best route out of poverty is work.”

“For those aged 18-21 we’re introducing a new youth obligation that says they must either earn or learn.”

“We’re also abolishing the automatic entitlement to housing benefit for 18-21 year olds. There will be exceptions made for vulnerable people and other hard cases.”

INHERITANCE TAX
No inheritance tax on the first £1 million.  Not something that will affect many of our members, but they will be paying for it from benefits cuts.

STUDENT MAINTENANCE GRANTS
Maintenance grants for students whose families are on low incomes will be scrapped from 2016/17 yearand replaced by loans.

EXTENT OF CUTS
Osborne says £17bn of savings will be announced today, out of £37bn needed. £12bn will come from benefits cuts and £5bn from tackling tax avoidance.

PRE-BUDGET SPECULATION
Benefits and Work will be keeping you posted about budget measures most likely to affect our members.

At the moment, there is speculation that:

  • The £12 billion in cuts will be spread over three years instead of two. £8 billion will be cut by 2017/18 and a further £4 billion by 2018/19.
  • The household benefit cap will be lowered from £26,000 nationally to £23,000 in London and £20,000 in the rest of the UK. The DWP’s very conservative estimate is that an additional 90,000 households will be hit and that an additional 40,000 children will be forced into poverty as a result. Many families are likely to face eviction.
  • Tax credits for people in work will be cut, possibly by cutting the amount of tax credits paid to families with more than two children.
  • Social housing tenants who earn more than £40,000 in London or £30,000 outside london will be forced to pay the market rent for their home.
  • Tenants will be obliged to pay the first 10% of their housing benefit themselves.
  • Maintenance grants for students whose families are on low incomes will be scrapped and replaced by loans.
  • Personal independence payment (PIP) and disability living allowance (DLA) will be subject to income tax.
  • The work-related activity component of employment and support allowance (ESA) will be abolished, meaning a cut of £29.05 a week for claimants in the work-related activity group.

Which of these will prove to be correct, we will find out this afternoon.

 

Comments  

#11 Sister Marika Rebicsek 2015-07-09 19:13
I can't work out how the Disability Working Tax Credit is going to be affected, this is really important to me as I am very limited in what work I can do, due to numerous medical conditions and physical and sensory disabilities. Anyone know?
#10 canttrusthesystem 2015-07-09 15:57
Quoting shimtoan:
....Ally this to an effective tax cut for high earners and a cut in tax credits for new claimants, I fail to see how we're all in it together


Interesting point there you make, shimtoan - it's been crossing my mind for a while - perhaps 'divide and conquer' is a tactic these 'dictators' (remember only 36% of those who actually voted even voted for them - is this a democracy?) think will be successful? Perhaps something worth us all bearing in mind over the coming weeks, months, years of Tory reign...
+2 #9 vision 2015-07-09 07:10
[quote name="morgandlin
"]Well, as it's been confirmed that there will no major changes to ESA SG, current WRAG claimants, and DLA/PIP, in the near future, I think it could have been a lot worse for many claimants.

The speculation and hype turned out worse than the event....

I'm sure there will be more attacks very soon, they were too frightend to go for the big hit all in one go. Much safer to sneak them in one bit at a time, then joe public doesn't realise the full picture.
They will not stop at these cuts, more later !!!
+2 #8 naheegan 2015-07-08 22:56
Quoting tintack:

I don't see how a reassessment could count as a new claim. The word "reassessment" itself implies the scrutiny of an existing claim.


Quoting morgandlin:

Well, as it's been confirmed that there will no major changes to ESA SG, current WRAG claimants, and DLA/PIP, in the near future, ...


Thank you both for clarifying this.
+2 #7 morgandlin 2015-07-08 15:14
Well, as it's been confirmed that there will no major changes to ESA SG, current WRAG claimants, and DLA/PIP, in the near future, I think it could have been a lot worse for many claimants.

The speculation and hype turned out worse than the event....

The main losers seem you be the under 25's, low paid workers, and those with more than 2 children.
#6 tintack 2015-07-08 14:34
Quoting naheegan:
Some of the details are being released as Osbourn gives the Budget.
I wonder just how this first one will be implemented.

For future claimants, the ESA rate for people in the work related activity group (WRAG) will be the same as jobseeker’s allowance.

It could be either new claimants who have never claimed before, or it could be any new claim that occurs as the result of reassessment.


I don't see how a reassessment could count as a new claim. The word "reassessment" itself implies the scrutiny of an existing claim.
#5 welshgrl 2015-07-08 14:26
I am confused! Will the welfare reform bill out tomorrow bring more cuts or will it only elaborate on things the chancellor said today? Has the ESA support group or DLA been affected in anyway?
+1 #4 stuart52 2015-07-08 14:04
i have a question regarding the new ESA WRAG premium, as stated new claiments wont get the premium, but what about IB/IS/SDA migration claiments? do they count as a 'new' claim? any ideas anyone?
+2 #3 tintack 2015-07-08 13:58
The DWP said before the election that the leaked proposal of abolishing the WRAG was "not government policy". Since that is what they are effectively going to do, we now know that what the DWP meant was "not government policy....yet".

Well I'm glad we got that cleared up.
#2 naheegan 2015-07-08 13:38
Some of the details are being released as Osbourn gives the Budget.
I wonder just how this first one will be implemented.

For future claimants, the ESA rate for people in the work related activity group (WRAG) will be the same as jobseeker’s allowance.

It could be either new claimants who have never claimed before, or it could be any new claim that occurs as the result of reassessment. If the former, some claimants will still receive the WRAg component of £29.05. If the latter, it could mean that all ESA WRAg claims will be reduced to the JSA rate, with current claimants benefit being reduced if successful at reassessment.
I'd be very cautious to hope that any current WRAg claimant would be exempt from the £29.05 reduction.
Still, the JSA rate is below what the UN defines as adequate income; so more claimants will experience deeper poverty.

The second is tenants to pay 10% of their rent, actually a 10% reduction in HB benefit. Apparently across the board for all tenants regardless of sector. Much hardship for those already covering a portion of their rent and those paying bedroom tax because of a shortage in available smaller properties.
#1 shimtoan 2015-07-08 13:33
I'm in the WRAG and currently getting HRM of DLA. My partner is on my ESA claim and we also get HB. I'm unlikely to qualify for PIP due to my ability to walk over 20m but less than 50 which wouldn't give me enough 'points' to qualify for PIP

We stand to lose £90p/w from Gideon and IDS's idiocy.

Ally this to an effective tax cut for high earners and a cut in tax credits for new claimants, I fail to see how we're all in it together

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