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Impact Of Welfare Cuts

13th May 2018

Households renting in the private and social sector have been severely affected by UK Government welfare policies, a new report shows.

The Impact of UK Welfare Policy on Housing report highlights the negative effect of Universal Credit on both tenants and landlords, due to the major increase in rent arrears. In East Lothian for example, 72% of social housing tenants claiming Universal Credit were in arrears, compared to 30% of all tenants.

In addition, the UK Government's freeze on local housing allowance rates - a benefit paid to private rental tenants - has also substantially limited households ability to afford rent on properties.

The Scottish Government funds the full mitigation of the bedroom tax, which would otherwise affect over 70,000 individuals who would lose an average of around £650 a year, as well as providing additional funding for direct mitigation of welfare reforms, wider direct support for those on low incomes and advice and other services.

Housing Minister Kevin Stewart said:"Almost half a million Scottish households receive some form of financial support for their housing. It is clear that UK Government welfare cuts are having a devastating impact, with money taken from the pockets of people across the country, pushing them into crisis and debt.

"We are doing all we can, with the powers we have to protect those on low incomes from these devastating UK Government cuts - spending more than £125 million this year alone to do so. This includes £62 million to fully mitigate the ‘bedroom tax', help for those impacted by the freeze in local housing allowance, as well as providing support for low-income households.

"This report builds on previously published evidence of the undue pressure on people that UK government changes to our welfare system are causing, including housing. We want to ensure everyone has access to a safe, warm place to call home - as part of that, the UK Government must urgently change course."

Low income families thousands of pounds worse off.

1st September 2017

Low income families across Scotland will be thousands of pounds a year worse off per year due to UK welfare cuts, a new report has found.

The Scottish Government report, ‘the Impact of UK Welfare Policy on Families with Children', looks at what the policies implemented since 2015 will mean for families.

The post-2015 policy that is having the biggest impact on the people of Scotland is the four year freeze to working-age benefits. This policy is estimated to reduce annual welfare spending in Scotland by £370 million by 2020/21.

Other significant reforms include the reduction in universal credit work allowance (£250 million reduction by 2020/21), the two child limit for tax credits and universal credit elements (£95 million reduction), and the removal of the family element for child tax credit and universal credit (£50 million reduction).

Cabinet Secretary for Communities, Social Security and Equalities, Angela Constance said:

"This report clearly sets out the devastating impact the UK Government's welfare cuts are having on the people of Scotland.

"By the end of this decade, the cuts being imposed on Scotland since 2010 are expected to reduce welfare spending in Scotland by nearly £4 billion a year.

“As well as moral objections, taking money away from low income families makes no economic sense. This is money taken from the pockets of families that are already surviving on low incomes and pushing them into crisis, debt and is creating problems that have to be picked up by other public services and emergency aid such as the Scottish Welfare Fund and food banks.

“In Scotland we are taking a different approach. Our new social security system will recognise social security as a basic human right and we will ensure that people are treated with dignity and respect."

Background

This is the first in a series of three reports that will look at the impact of UK welfare reforms, following the publication of the statutory annual welfare report in June[1]. The next two reports will focus on the impact on people with disabilities and examine housing-related policy changes.

The report looked at three illustrative families and estimates the financial impact of post 2015 policies.

By 2020/21, a lone parent bringing up three children, including one born after April 2016, is estimated to lose more than £4,000 per year. This is compared with what they could have been entitled to without policies including the two child limit and benefit freeze.

A couple with two children, with one parent working 16 hours a week, is estimated to be £1,500 per year worse off by 2020/21 when they make a new claim to universal credit. This family would be affected by cuts to work allowances in universal credit, benefit freeze and the removal of the family element for new claims. Their income falls despite the introduction of the National Living Wage.

A couple with four children, where one partner works 20 hours a week and the other 12, is estimated to lose £1,130 per year by 2020/21.

The Institute of Fiscal Studies (IFS) have previously estimated that that UK Government welfare policies will cut, on average, more than 10% from the incomes of low income families with children. IFS projections also indicate that GB absolute child poverty rates (after housing costs) could increase from 27.1% in 2015/16 to 31.6% in 2020/21 due to welfare cuts, signalling a return to levels not seen since the early 2000s.

New report highlights impact on disabled people. -

30th October 2017

Around 30,000 people in Scotland could lose entitlement to disability benefits, once the full rollout of the UK Government's Personal Independence Payment (PIP) is complete.

A new report ‘Impact of UK Welfare Policy on Disabled People’ examines the consequences of recent UK Government welfare policy changes on disabled people. For example, the introduction of PIP and cuts to Employment and Support Allowance.

The main findings include:

Between 7000 to 10000 disabled people per year are set to be affected by the removal of the work related activity component of Employment and Support Allowance

40,000 disabled people claiming Employment and Support Allowance (ESA) have been affected by the bedroom tax

Around 30,000 disabled people could lose entitlement to non-means tested disability benefits due to re-assessment to PIP

Minister for Social Security Jeane Freeman said: “The Scottish Government is committed to full equality and human rights for disabled people and we have published an ambitious delivery plan to help us achieve this.

“It is therefore with dismay that we see in this report, the impact of the UK Government’s unrelenting strive for austerity. Like Universal Credit, these cuts are failing the very people they are designed to support. They are causing unnecessary hardship and suffering to people across the country.

“The UN’s Committee on the Rights of Persons with Disabilities issued a report earlier this year, which is damning of the UK Government and rightly highlights the changes urgently needed to halt the damage they are causing. That is why I’ve written to Penny Mordaunt, the Minister for Disabled People, calling on them to take action. The UK Government must listen to the cacophony of voices and growing evidence telling them about the damage their policies are causing and stop their assault on disabled people."

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