how the benefit changes in the budget will become law


The Welfare Reform and Work Bill is the means by which many of the items announced in the July Budget will come into force, including reductions to the benefit cap; freezing Child Benefit + means-tested benefits; capping Child Tax Credit to 2 children; removing the family premium in Universal Credit; reducing ESA WRAG level to Jobseeker’s Allowance; requiring claimant parents of 3 year olds to look for work (or increase hours of work in 2 parent low income household); and requiring parents of 1 and 2 year olds to complete ‘work requirements’ directed by the JobCentre as a condition of receiving benefit.

The Bill is only 29 pages, which is super-short as these things go, and the Explanatory Notes here (and here as pdf) are also  only 30 pages, with a lot of white space. Flicking through the Explanatory Notes pdf + the diagrams showing the impact of various measures  produced by the Institute of Fiscal Studies is a quick way to get up to speed. 

Click here to see where the Bill is the Parliamentary process, and here to read about contacting your MP in advance of the Second Reading

Click here for all Bill Documents including Explanatory Notes   (Commentary and explanation on various clauses can be found in  ‘OverviewAND  ‘Policy Background‘ within the Explanatory Notes)

Below is a list of items in the Welfare Benefits section of the Welfare Reform and Work Bill   which is to have its Second Reading in the House of Commons on July 21st 2015.

  • 7 Benefit cap
  • 8 Review of benefit cap
  • 9 Freeze of certain social security benefits for four tax year
  • 10 Freeze of certain tax credit amounts for four tax years
  • 11 Changes to child tax credit
  • 12 Changes to child element of universal credit
  • 13 Employment and support allowance: work-related activity component
  • 14 Universal credit: limited capability for work element
  • 15 Universal credit: work-related requirements

To see when various measures are going to be introduced, we need to look at the Commencement clause at the end of the Welfare Reform and Work Bill I’ve added a note about this to each clause. For some clauses the commencement date is specified, but for others, the Bill says  ‘the remaining provisions of this Act come into force on such day or days as the Secretary of State may by regulations appoint.’

7 Benefit cap
(1) Section 96 of the Welfare Reform Act 2012 (benefit cap) is amended as follows …

“annual limit” is—
(a) £23,000 or £15,410, for persons resident in Greater London;
(b) £20,000 or £13,400, for other persons.

WHEN? 

Sections 7 and 8(1) to (6) come into force—
(a) for the purposes of making regulations, on the day on which this Act is
passed;
(b) for remaining purposes, on such day or days as the Secretary of State
may by regulations appoint.

(This is what the Explanatory Notes Policy Background says about the Benefit Cap.  This is what the Explanatory Notes Commentary says about the Benefit Cap)

9 Freeze of certain social security benefits for four tax years

2016-2020 freeze Child Benefit, Income Support, Housing Benefit, Jobseeker’s Allowance, Employment and Support Allowance

10 Freeze of certain tax credit amounts for four tax years

2016-20 freeze Working Tax Credit +Child Tax Credit

WHEN? 

The following provisions of this Act come into force on the day on which it is
passed—
sections 9 and 10 and the Schedule;

11 Changes to child tax credit
(1) Section 9 of the Tax Credits Act 2002 (maximum rate of child tax credit) is
amended … [no Child Tax Credits after 2nd child from 2017 for NEW BIRTHS AND/OR NEW CLAIMS]

Section 9 Tax Credits Act 2002 would then look like this 

WHEN? 

Section 11 comes into force—
(a) for the purposes of making regulations, on the day on which this Act is
passed;
(b) for remaining purposes, on 6 April 2017.

12 Changes to child element of universal credit
(1) Section 10 of the Welfare Reform Act 2012 (responsibility for children and
young persons) is amended … [UC only for first 2 children (extra if disabled)]

Section 10 Welfare Reform Act 2012 would then look like this

The Universal Credit Regulations 2013 would look like this

WHEN? 

The remaining provisions of this Act come into force on such day or days as the
Secretary of State may by regulations appoint.

IFS

13 Employment and support allowance: work-related activity component
(1) Part 1 of the Welfare Reform Act 2007 (employment and support allowance) is
amended as follows.
(2) In section 2 (amount of contributory allowance)—
(a) in subsection (1)(b), omit “or the work-related activity component” …

Section 2 of the Welfare Reform Act 2007 would then look like this

WHEN? 

The remaining provisions of this Act come into force on such day or days as the
Secretary of State may by regulations appoint.

14 Universal credit: limited capability for work element
In section 12(2) of the Welfare Reform Act 2012 (universal credit: particular
needs or circumstances), omit paragraph (a)…. [take away housing premium limited capability for work]

Section 12 Welfare Reform Act would then look like this

WHEN? 

The remaining provisions of this Act come into force on such day or days as the
Secretary of State may by regulations appoint.

15 Universal credit: work-related requirements
(1) In Chapter 2 of Part 1 of the Welfare Reform Act 2012 (claimant
responsibilities)—
(a) in section 20(1)(a) (claimants subject to work-focused interview
requirement only), for the words from “at least 1” to “3)” substitute “1” …
(2) In the Universal Credit Regulations 2013 (S.I. 2013/376)—
(a) in regulation 91 (claimants subject to work-focused interview
requirement only), omit paragraph (1) … [work focused interview requirement (WFI) upped to work preparation requirement when youngest child is 1 (rather than 3) + actively seek work child age 3 down from 5 (? September 2017 ?)]

Section 20 of the Welfare Reform Act and Regulation 91 of the Universal Credit Regulations 2013 would look like this

WHEN? 

The remaining provisions of this Act come into force on such day or days as the
Secretary of State may by regulations appoint.

I’ve blogged about clause 15 here https://edyourself.wordpress.com/2015/07/10/lone-parents-looking-for-work-when-youngest-child-is-3/  I’ve written here about how it hinges on the promise of 30 hours of free childcare, and how that might work out in practice  https://edyourself.wordpress.com/2015/07/12/30-hours-free-childcare-from-2017/

See also http://edyourself.org/articles/welfarereform.php#julybudget2015 

NB I may be missing something obvious but I can’t find anything in the Welfare Reform and Work Bill about the cut-off point for Tax Credits or the higher taper rate as announced in the July Budget. Questions have been raised about the cut-off for Child Tax Credits but the Bill says nothing about this. Student maintenance grants being replaced by loans isn’t in there either. 

25 Commencement Welfare Reform and Work Bill
(1) The following provisions of this Act come into force on the day on which it is
passed—
(a) section 8(7) and (8);
(b) sections 9 and 10 and the Schedule;
(c) section 23, section 24, this section and section 26.
(2) The following provisions of this Act come into force at the end of the period of
two months beginning on the day on which it is passed—
(a) section 1;
(b) section 2;
(c) sections 4, 5 and 6.
(3) Sections 7 and 8(1) to (6) come into force—
(a) for the purposes of making regulations, on the day on which this Act is
passed;
(b) for remaining purposes, on such day or days as the Secretary of State
may by regulations appoint.
(4) Section 11 comes into force—
(a) for the purposes of making regulations, on the day on which this Act is
passed;
(b) for remaining purposes, on 6 April 2017.
(5) Sections 19 to 22 come into force—
(a) for the purposes of making regulations, on the day on which this Act is
passed;
(b) for remaining purposes, on such day or days as the Secretary of State
may by regulations appoint.
(6) The remaining provisions of this Act come into force on such day or days as the
Secretary of State may by regulations appoint.
(7) Regulations under subsection (3), (5) or (6) may—
(a) appoint different days for different areas;
(b) appoint different days for different cases or purposes.
(8) Regulations under subsection (3), (5) or (6) may make such transitional or
transitory provision or savings as the Secretary of State considers necessary or
expedient in connection with the coming into force of the provisions to which
they relate.
(9) Section 176 of the Social Security Administration Act 1992 (consultation with
representative organisations) does not apply in relation to regulations under
this section so far as relating to section 7 or 8.
(10) Regulations under this section must be made by statutory instrument.

These are the remaining contents of the Bill 

Reports
1 Full employment: reporting obligation
2 Apprenticeships reporting obligation
3 Support for troubled families: reporting obligation
Social mobility
4 Workless households and educational attainment: reporting obligations
5 Social Mobility Commission
6 Other amendments to Child Poverty Act 2010
Loans for mortgage interest
16 Loans for mortgage interest
17 Section 16: further provision
18 Consequential amendments
Social housing rents
19 Reduction in social housing rents
20 Exceptions
21 Exemption of a registered provider of social housing
22 Enforcement
23 Power to make consequential provision
24 Extent
25 Commencement
26 Short title
Schedule — Meaning of “the relevant sums” and “the relevant amounts”

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