Benefit complexities and no legal aid?

[nickd]

Yet another report out of Westminster which no one is saying too much about...







It's a report which addresses the problems in our benefits system with means testing, something which challenges government over their radical plans to reform the welfare state. It also highlights the need for claimants to be able to access proper help in sorting out the problems which means testing creates.


Lets have a look at the Public Accounts Committee's - Sixty-Second Report on Means Testing (prepared 12th January 2012) and note the key findings..



1. No single body is responsible for coordinating means testing across government


2. It is not clear what effect some means-tested benefits have on claimants' incentives to work.


3. Departments do not understand the impact of administering more means-tested benefits locally.


4. The benefit system is difficult to understand and places a high burden on claimants.


5. Departments don't understand why administrative costs of means-tested benefits vary so significantly.


6. Real-time information systems will be difficult to implement for small businesses.



Mylegal commentary



The problems claimants experience with their welfare benefits are well catalogued on Mylegal, I addressed many of the problems I could foresee with government's proposed welfare reforms in a well read article which appeared on Mylegal last year. You can read it here - mylegal.proboards.com/index.cgi?board=frontline&action=display&thread=405.


There are probably many welfare benefits specialists up and down the country who could teach government a thing or two about the intricacies and complexities of the benefit system, but rather than listen to us government wants us out the way; - their ill - conceived reforms to the legal aid system will effectively cut off the derisory levels of funding which we currently receive, the cuts will see us become an extinct species as more and more statutory funded advice agencies go to the wall. If ever there was a time to get shot of us, it certainly isn't now; - government is clearly struggling to comprehend what a massive task it has taken on and the kind of expensive problems it will create as hidden complexities surface; - it's absolute madness to think they want to dispense with us when our contribution towards better reform could be so much better utilized.


The complexities which arise out of means - testing are often difficult to solve puzzles which even the most intelligent of claimants struggle to find a solution to. The puzzles are often relatively easily sorted out by a benefit specialist because they use years of experience and familiarity with the system to know where the answers can be found. Benefit specialists are well used to changes in the benefit system, they will have encountered them many times before in their years of experience.


When government talked of 'simplifying' the system, I cringed at their optimism. Their time table in introducing Universal Credit struck me as nothing more than wishful thinking. Government has only recently announced another u turn on its intended Child Benefit changes. It was obvious when they were first announced that it would end having to be changed. You simply cannot say it would be fair to axe the Child Benefit to a family where one earner was bringing in say £44,000 p/a but allow another family with two earners bringing in £40,000 p/a each to keep it. It would have been absolute madness to pay a family with a joint income of £80,000 but not to one which had a little over half of the wealthier family. Government's problem was caused by setting a threshold based on the higher tax level rather than means-testing families. The u turn has forced government to accept that you have to face the complexities caused by means-testing however much you may not wish to.


Where Government went wrong was to fail to address the problems it now has to make in order to make its changes fairer; - it fundamentally failed to address the problems means-testing creates. It also completely disregards the huge problems it causes for thousands of claimants; - many of whom are currently helped to resolve their problems with the help of specialist advisers paid for out of the legal aid purse - but Government wants to stop the help to 'save money'.


This latest report uncovers yet more problems which government's welfare reforms will create. In my view, a complete review of the consequential impact of the entire reforms is now called for. Not written by more eminent and well paid professors who've never dealt with the problems which exist within the benefits system, but by engaging more pro-actively with the front line specialists who routinely fix what government calls a 'broken system'. When something is broken you must keep on hand an army of repairers; - or things will simply never get fixed.


I for one warmly welcome welfare reform, it's frustrating to realize how no-one seems to be prepared to listen to us. I would dearly love the system to become cheaper, so more money can go to the claimants who need it; - instead, government throws more and more money at fresh faced private contractors in the hope they will become a nation of fixers. These contractors will for instance be paid up to £14,000 per person to help them transition from welfare to work. Transition will always involve someone in trying to get to grips with a claimant's real problems. It's the kind of work we routinely do as part of our holistic approach. We quickly get to realize the many and varied predicaments clients find themselves in. We'll get the full picture as we take a full history in say a case which goes on to encapsulate a benefit appeal; - what's more we'll do it for paltry fixed fee of £150.


The problems this report highlights are ones which I well recognize, departments which don't talk to one another, clients worn out through repeating their circumstances to a multitude of different departments, local councils who aren't in receipt of the right information, clients who fall foul of the law in petty benefit offences because they simply don't understand the complex claim rules, poor advice given by badly trained staff, messages and documents which don't get passed from one department to the next, no body taking responsibility; - it's routine stuff to a benefit specialist. We use our skill and experience to pinpoint a problem because we are so used to knowing where to look.


The vast majority of clients I see would dearly love to get out of the benefit trap, for some this may sadly never happen as they simply remain simply too disabled to work. For others it's the sheer fear caused by the problems created as they try and report fluctuating wages to the council in an effort to make sure they are getting the right amount of help with their rent. It stresses people beyond belief; - such people often find work a place of respite away from the ludicrous bureaucracy which goes with claiming in work benefits, it's where the stumbling block often is; - not the degree of laziness which the populist media likes to portray.


Government should put its hands up and admit they need us welfare specialists, it would be a wise move on their part to make us friends rather than foes. I attended an event last year and asked our Justice Minister Jonathon Djanogly if we would take up my invitation to come down to where I work in Devon and spend some time in my office so I could show him just how necessary our work is, he said he would if he was in my part of the country. I'm still waiting needless to say, it's a shame as he would probably have learned a lot more than he seems to know about the complex nature of the benefits system his government seeks to reform.


The need for welfare benefit specialist paid for out of legal aid is obvious and government will come to realize what a big mistake it is making in trying to dispense with us.


Read the rest of the report in more detail in the next two posts, use the link to go directly to the full contents..
www.publications.parliament.uk/pa/cm201012/cmselect/cmpubacc/1627/162702.htm

[nickd]

1. No single body is responsible for coordinating means testing across government.


As a result there is limited oversight of the interactions of benefits that are based on means testing with each other and with those that are not. There needs to be clear responsibility for ensuring the system as a whole works for claimants and taxpayers and addresses the overall balance between means-tested and non-means-tested benefits. HM Treasury has overall responsibility for ensuring that means testing is applied in a consistent and coordinated way across government. But the department does not intend to take the direct lead, so it needs to allocate this responsibility to a designated department or agency that can be held accountable for the operation of means testing as a whole and the interaction between different benefits, whether means tested or not.


2. It is not clear what effect some means-tested benefits have on claimants' incentives to work.


Improving incentives to work is a key objective of Universal Credit. At present there is no clear picture of how the entire benefit system affects claimants' incentives to work. Instead departments focus their attention on the core DWP and HMRC benefits and do not look at the wider impact benefits such as free school meals have on incentivising claimants' behaviour. We expect departments to do more to understand what impact multiple benefits have on an individual. In particular, HMT and DWP should ensure they understand how the wider benefit system affects incentives when they assess the impact of a policy change.


3. Departments do not understand the impact of administering more means-tested benefits locally.


Many more bodies are now using means tests to determine eligibility to benefits, including local authorities for Council Tax Benefit and universities for bursaries. Locally determined entitlements could have a large effect on a family's total income and incentives, for example, if families lose entitlement to a student's university bursary when household income rises. HM Treasury should work with DCLG, DWP and other affected departments to ensure that guidance to local bodies is consistent with broader welfare policies, and to identify the impact of locally-designed benefits on claimants.


4. The benefit system is difficult to understand and places a high burden on claimants.


Some benefits, such as savings credit for pensioners, are extremely complex. Current reforms aim to move many claims online, and DWP are testing online systems to ensure they are easy for claimants to use. However, other initiatives to improve the claimants' experience are no longer being pursued. For example, the 'Tell Us Once' programme allows claimants to inform one government agency of a death and that agency will then inform other public organisations. The 'Tell Us Once' approach could be expanded to other changes in circumstances but this option is not being actively pursued. The Department for Work and Pensions, along with other departments with means-tested benefits, needs to develop a better understanding of the financial costs and other burdens placed on claimants applying for benefits. We would expect this information to be used in delivering Universal Credit so as to improve benefit take-up.


5. Departments don't understand why administrative costs of means-tested benefits vary so significantly.


The estimated cost of administering a new claim for Pension Credit is £351 while a new claim for Income Support costs £181. There remains little confidence in departments' estimates of the unit costs of administering claims, although DWP has made some progress in identifying the factors that affect costs. Without understanding the costs and benefits of different forms of means testing it is difficult for departments to establish whether they are achieving value for money. DWP and HMRC must build on existing information to identify why their costs vary for different means tests and where efficiencies can be made.


6. Real-time information systems will be difficult to implement for small businesses.


The implementation of tax credits shows that lags in updating information about claimants can lead to billions of pounds of unanticipated overpayments. HMRC is developing a real-time information (RTI) system which will be central to Universal Credit reforms but HMRC has not established how RTI will affect employees in businesses that do not have electronic payroll systems. HMRC must clarify how RTI will affect small businesses and the self-employed. To try to prevent a repeat of the problems that have affected tax credits, HMRC should develop an effective approach for those claimants and businesses that are likely to be outside the RTI system.

[nickd]

Summary


The Government uses means testing to distribute at least £87 billion of benefits to claimants each year, around 13% of total public spending. The poorest fifth of households rely on means-tested benefits for a third of their net income. The Government is undertaking fundamental reforms of the benefits system, including the introduction of a new means-tested Universal Credit that will replace a number of existing means-tested benefits. In doing this the Government should ensure that it learns from the lessons of the past and coordinates benefits effectively in order to safeguard value for money for taxpayers and claimants.

No one department has overall responsibility for means testing and for ensuring consistency of approach. The issue is dealt with on a department by department basis, with 30 different means tested benefits being managed by nine departments and 152 local authorities in England. No one is responsible for determining how much assistance should be provided through means-tested benefits rather than through other forms of support, or for thinking through the implications of reforms across departments. For example, reforms to higher education, and the resultant bursaries provided by higher education institutions, could have important implications for families who claim means-tested benefits, impacting on incentives to work or to increase hours of work.

Departments currently have a limited understanding of how their design of benefits affects incentives for employment, the burden on claimants, take-up and administrative costs. The Department of Work and Pensions (DWP) and HM Revenue & Customs (HMRC) tend to focus on the impacts of their own large benefit programmes, but overlook other important benefits administered elsewhere, such as free school meals and Council Tax Benefit. Departments need to improve their understanding of how all benefits interact and how changes to eligibility rules can affect claimants. Complexity increases the burden on claimants which can harm take-up, and is likely to disadvantage the most vulnerable members of society in particular.

The Government expects Universal Credit reforms to simplify the system and improve incentives to find work. The DWP's priority is to focus on the effective delivery of these reforms. However, success will also depend on proper coordination between Universal Credit and other means-tested benefits, such as Council Tax Benefit and higher education bursaries that may now be delivered at a disaggregated and local level. In addition, DWP and HMRC are designing a real-time information (RTI) system for Universal Credit to reduce the risk of overpayments, with benefits being recalculated as soon as circumstances change. Both DWP and HMRC need to understand how the introduction of this system will impact on small businesses and the self-employed who may not have the necessary IT to administer it.

On the basis of a report by the Comptroller and Auditor General,[1] we took evidence from the Department for Work and Pensions, HM Revenue and Customs and HM Treasury, as well as witnesses from Age UK, the Child Poverty Action Group and the London School of Economics.