Easing the passage back to work

Recent changes to existing benefits and the creation of extra
grants have helped reduce the barriers for people to return to
work. Neil Bateman outlines what is on offer to help people back to
work.

Moving off means-tested benefit and into paid work is very
tricky, even if the system works well.

If there’s a hiccup, it can be pretty disastrous for claimants
and cause them to give up work and go back onto benefit – perhaps
even with debts and a sense of failure and of being trapped on
benefit for ever.

Particular problems arise around cashflow and meeting housing
costs for the first few weeks. Recently introduced changes should
help matters and enable some people to stay in work. These changes
come on top of a range of improvements – the national minimum wage,
tax credits and so on. But some of the latest improvements require
awareness on the part of advisers and action by claimants.

There is now a £100 job grant for those people moving into
full-time work expected to last at least five weeks if they have
been on benefit for more than a year. Lone parents don’t qualify
(read on and it will become clear why). The job grant is not paid
automatically – claimants have to apply for it via a Jobcentre.

Also designed to help people moving off benefit and into work is
the automatic payment of four weeks’ housing costs. This applies to
both to mortgage interest paid in income support and housing
benefit. Previously, the system did not help homeowners and tenants
had to claim within seven days of leaving benefit, which many did
not do. Claimants must have been on benefit for at least 26 weeks
and to have a job expected to last at least five weeks. It is
essential that the claimant actually tells the Benefits Agency or
the local authority as appropriate, that they have taken up work.
This should then trigger the payments.

There is also a 52-week linking period for income support
mortgage costs – in other words, if a claimant goes back onto
income support within 52 weeks, they don’t have to serve the usual
waiting period before getting their full mortgage interest
paid.

The £15 earnings disregard for income support and other
benefits has gone up to £20. (This is the amount a person can
earn before it starts to count as income for means tested
benefits.) This will help lone parents, pensioners, people with a
disability or long-term illness and couples who have been out of
work for more than two years. The other disregard (£5) has not
been changed.

There is evidence to show that increasing the earnings disregard
not only reduces the incentive for working illicitly while
claiming, but can also be used as platform for returning to
work.

For lone parents on housing or council tax benefit, but not on
income support, the disregard remains £25.

Lone parents also qualify for a two-week automatic run on of
income support when they go into work from income support.

There is also the back to work bonus – an accumulated reduction
in income support if part-time earnings are above the disregard
level which can then be paid when full-time work starts. This can
be up to £1,000.

For those on working families and disabled persons tax credits,
if a child joins the family, the tax credit can be reassessed to
include the element for the new child from the date of birth and
not from when the claim is next renewed. Action will be required by
the claimant. And, of course, the two tax credits remain unclaimed
by countless people, some of whom may well be your customers. And
not just the very low paid.

For many claimants, securing work and a decent income is crucial
not only to ending poverty but for their whole sense of well-being
and self-esteem. The latest changes are another step in the process
of ensuring that where there is work, the transition will not be as
painful as it has been in the past.

Neil Bateman manages Suffolk Council and Suffolk Health
Authority’s welfare rights service. He is unable to answer queries
by post or by telephone. If you have a question to be answered in
Wefare Rigths please write to him c/o Community
Care.