Friday, 27 August 2010

Guest Post: This year’s budget – progressive or destructive?

This is a guest post by Flash Bristow.

This week, the Institute for Fiscal Studies (IFS) published a report assessing the impact of June’s budget1. It was no surprise to find that the poorest and disabled people have been hardest hit by benefit cuts in a budget that is far from “progressive”.

We know that disabled people often have a low income – the Joseph Rowntree foundation found that three out of ten disabled people of working age are living in poverty2. With this background, the IFS report makes for grim reading.

Their projection illustrates that as a result of benefit changes, the poorest 30% of people will lose 2% of their income. For those who already live hand to mouth, this could be hard to bear.

There are three ways in which we will be hit hard: these concern changes to Disability Living Allowance (DLA), Housing Benefit and the way that benefit increases are calculated.

Firstly, from 2013 there will be reforms to the way DLA is assessed. We do not know much about how this will operate or whether it will affect those who already have indefinite awards, but the Government’s Budget policy costings document says that the result will be to remove DLA from around 20% of claimants. As only 1% of claims are estimated to be fraudulent, surely the other 19% will be people who need help but are turned away. As it is estimated that only 40-60% of those eligible for DLA actually claim it 3 this is a very harsh cut.

There will be various changes to Housing Benefit, but the killer clause for disabled people is “Reductions in housing benefit for those of working age living in social housing that is under-occupied” – the government trumpets that this change is predicted to make a saving of £490 million in 2014-15.

This rule makes no consideration of disabled people’s needs – for example the requirement for an extra bedroom for carers to sleep in, or if a couple (or children) are unable to share a bedroom because one of them is disabled. My own parents are in this situation – my father has a special bed on the ground floor, while my mother sleeps in the marital bed upstairs. But it’s just a numbers game to the government – count the heads, assign the bedrooms. Simple, right?

A parliamentary briefing paper on Housing Benefit4 says “The Department for Work and Pensions (DWP) have stated that they expect the additional needs of disabled people to be paid for by local authorities from Discretionary Housing Payments but this is not working in practice.” This is a disgrace – discretionary payments can never be relied upon (particularly as they are meant to be temporary, and come from a limited pot of money) so it is worrying to consider how many disabled people will be penalised for “under-occupying” a property, when in fact they need all of the rooms in their house.

In addition, the IFS report goes on to say that “Local Housing Allowance rates will be set at the 30th percentile of local rents rather than the 50th percentile. This effectively means that LHA claimants will only be able to choose from the cheapest 30% of properties in their local area of the appropriate size for their family rather than the cheapest 50%.” This could be a problem for any disabled people who need a ground floor flat – as I discovered when I was house-hunting, they often carry a premium for being a “garden flat”. Housing benefit won’t stretch that far. And what about my friend Sam, who needs a town centre flat because she can’t access public transport to cheaper houses in the suburbs? Yet again disabled people are being penalised by circumstance.

The final way in which the budget is unfair to disabled people is in the way that year-on-year benefit increases will be made. There are three indexes on which inflation can be calculated, and the government is changing the index used for calculating benefit to the meanest one – meaning that we can look forward to an even more meagre increase to our benefits each April. I’m surprised that the government hasn’t axed our traditional £10 Christmas bonus!

This budget is all but “progressive” – as the IFS has concluded. It’s frightening to consider how many disabled people will be pushed closer to the breadline, if they aren’t there already. Of course, we knew this already when cuts were publicised, but it’s good to have it confirmed by an independent research institute. Perhaps now the government will have to ensure that disabled people are not disadvantaged by this budget. If not, how long before they have blood on their hands?

1. The distributional effect of tax and benefit reforms to be introduced between June 2010 and April 2014: a revised assessment
2. UK poverty falls overall, but rates increase among disabled people
3. A brief guide to the world of tax for disabled people
4. Housing Benefit: Size Criteria and Discretionary Housing Payments

1 comment:

  1. Great. So do I have my carer move in and lose the Severe Disability Premium (for not living alone) or do I need to find additional rent to cover the loss of housing benefit because I have a spare room for emergencies?

    And what the hell is with this downwards jealousy?! We're a social blight if we live on a rough estate but we're overhoused at taxpayers expense if we're not?!