Welfare reform case studies

Examples of how welfare reform will impact on the income of people with learning disabilities.

Case study 1 

Before

Andy is 28, lives at home and currently receives Incapacity Benefit of £110.85 per week and Disability Living Allowance care component at the lower rate of £20.55 per week.   
His total income is £131.40 per week. 
 

After 

If Andy put in his first claim after the new Universal Credit and PIP systems were in place, his benefits would be, Personal Allowance - £77.00 per week.  

This may be all he can get. PIP is not paid at the lower rate. If the Work Capability Assessment decides he does not have limited capability for work, he will be in the “full conditionality” group and not entitled to extra payment. 
 
If the Work Capability Assessment decides he does in fact have limited capability for work, he will be put in a lower conditionality group and will receive an extra £28.15 per week. 
 
His total income would then be £105.15 per week. 
 

Migration 

If he moves over to UC from his current Incapacity Benefit claim, his benefit should be frozen at the past amount. It is unclear whether this would be £110.85 or £131.40; probably the lower amount. He would not get any cost of living increases until the UC entitlement had gone over £110.85.  

Case study 2 

Before 

Jenny is 45 and lives alone in a rented housing association flat with support. No-one gets Carer’s Allowance for her. Her rent is £125 per week. Her council Tax is £12 per week.

She receives the following benefits:  

Disability Living Allowance care component
middle rate £ 51.85
Disability Living Allowance mobility component
lower rate  £ 20.55
Housing Benefit  £125.00
Council Tax Benefit   £12.00
Severe Disablement Allowance  £ 80.70
Income Support  £ 78.85
 
Total (per week)  £368.95 
 

After 

If Jenny were to claim for the first time in the UC/PIP system, her payment would probably be: 
 
PIP daily living standard rate   £ 51.85
Universal Credit basic allowance   £ 71.00
Housing costs in UC    £125.00
Allowance for limited capability for work  £ 20.85
 
Total (per week)  £268.70 
 
These figures assume: (a) Jenny still gets her full rent covered - new rules will limit the help you can get towards social housing rents if you are in something deemed too large for your needs, (b) she is not entitled to the standard rate of PIP mobility component, and (c) is assessed as having limited capability for work. Council Tax benefit no longer exists, but she will get some (as yet unspecified) reduction through the local scheme that will be run by her council. 
 

Migration 

As in Case Study 1, Jenny’s income reduces. In Jenny’s case this is to a large extent because of the abolition of the current disability premiums. Leaving aside the DLA/PIP, housing and council tax costs hew new income would still be £67.70p per week lower under the new scheme. Her previously higher amount should be protected. If someone carers for 35 hours or more per week on an unpaid basis, that person could claim Carer’s Allowance without it affecting Jenny’s payment.  
 

Case study 3

Before 

Abi and Nigel are both disabled and live together as a couple. Nigel’s d.o.b. is 4/4/49; Abi’s is 16/10/54. They both get higher rate DLA care component. Nigel gets higher rate DLA mobility; Abi gets the lower rate of DLA mobility. Abi also gets Carer’s Allowance for looking after Nigel. 

They have a shared ownership flat. The rent is £75 per week with extra eligible service charges of £20pw. Their Council tax is £20 pw, and the mortgage interest (which is all they pay towards the loan) is £85 per week. This is covered by PC through SMI and goes direct to the building society. 
 
They have £11,400 in the bank. 
 
Nigel claims Pension Credit on 6/5/11, and their income under the PC scheme is: 
 
PC guarantee credit for a couple   £217.90
Severe Disability premium (2)  £116.40
Carer’s premium    £ 32.60
SMI  £ 85.00
Housing Benefit  £ 95.00
Council Tax Benefit  £ 20.00
 
Total  £566.90

Less income:
Carer’s allowance  £ 58.45
Income from capital  £ 13.00
 
Total   £495.45
+ DLA (2 care comp.)     £154.90
+ DLA (mob)  £ 74.60
 
Total (per week)  £724.95
 
(This is not all disposable cash! - £200 per week has to go on rent/ mortgage/council tax.  An unspecified amount may have to go to the local authority if they receive services and are having to pay charges from their DLA/ SDP.) 
 

After 

If Nigel claims after UC has come in, the situation will be different. They cannot claim Pension Credit until BOTH of them are of qualifying Pension Credit age - in this case when Abi is 65. They can claim UC, which will look like this: 
 
UC standard amount for couple   £ 11.45
Carers amount    £ 32.60*
SMI  £ 85.00
Housing costs   £ 75.00
 
Total  £304.05
Less income:
Carer’s allowance  £ 58.45
Income from capital  £ 22.00**
 
Total   £223.60

+ DLA (2 care comp.)     £154.90
+ DLA (mob)  £ 74.60
 
Total (per week)  £453.10
 
* possibly - no firm figures yet on this. 
** higher than PC rules. 
 
 
(Again, this is not disposable cash.  £180 pw has to go to mortgage and rent and council tax, leaving £273.10p. There will be some add-back depending on their local council’s system for helping towards Council Tax. Their DLA may have to be used to pay for LA charges depending on the local authority’s system) 
 
If Abi decides to do some paid work, she will need to take advice, as this means they would lose any help towards SMI, regardless of the amount of work done. 
 
Their income may reduce further when DLA is transferred to PIP if Abi loses her low rate mobility DLA. 
 
Because Abi is Nigel’s carer she would not have to undergo work capability assessments. In other cases, however, she would. Nigel would not be faced with this rule. 

Migration 

Their current levels of income should be protected according to the government’s promise that no existing claimants will be worse off.   

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Although we try to ensure that statements as to the law and other facts are accurate this report gives generalesponsibility for any loss incurred as a result of relying on such statements, specific advice should always be obtained on individual cases

Housing and Support Alliance. 
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