The government has set a target of getting three-quarters of all
new incapacity benefit claimants back into work. As a result, a
pilot project involving more rigorous testing of “fitness for work”
will begin in November for new claimants in Bridgend, Renfrewshire
and Derbyshire – as well as three areas yet to be announced.
One proposal is that new claimants could face five or more
compulsory work-focused interviews plus “voluntary psychological
treatment” provided jointly by the NHS and Jobcentre Plus.
Claimants who appeal against the decision that they are fit for
work could also lose their right to claim income support.
In a related move, the Department for Work and Pensions plans to
make it compulsory for jobseekers’ allowance claimants to have bank
accounts, so that claimants can be seen as being “job-ready”.
By 2005, most benefit claimants will be expected to have opened
bank or post office card accounts. The process of transferring
millions of people from order books and giros to what the DWP is
calling “direct payments” has already begun.
Some claimants have been led to believe they must change their
payment method immediately. This is not so – claimants can insist
on keeping their order book, at least for the time being. This is
especially important if social services departments have a policy
that home carers are not allowed access to PIN numbers (needed for
the Post Office card account) nor to withdraw cash from bank
At the same time that pensioners have been getting letters about
direct payments, many will have been getting letters about the new
pension credit. Although it doesn’t start in payment until October,
around 20 per cent of pensioners are being invited to claim in
advance, so the DWP can test its systems and get a headstart on the
expected 2.8 million claims. Pensioners getting income support will
be switched straight to pension credit in October 2003.
Pensioners who aren’t in the “lucky” 20 per cent can still apply
for pension credit in advance, although the DWP doesn’t want them
doing so. Its advice is they should wait for information packs to
be delivered between October 2003 and June 2004. As any credit due
can be backdated to October 2003, this appears reasonable. However,
some pensioners may prefer to get the money when it is owed to
them, not nine to 10 months later. The pension credit claim line is
0800 99 1234.
Finally, foster allowances are being taxed more consistently from
April 2003. Only the amount above a new threshold will be a taxable
profit. The threshold will be fixed at £10,000 a year, plus
£200 per week for a child aged under 11 and £250 per week
for a child of 11 or over. The Inland Revenue has confirmed that a
foster carer, even if earning below the threshold, can claim the
new working tax credit. Also, their income from fostering will be
assessed for tax credit purposes only as being any amount above the
threshold. This means many foster carers will have effectively a
nil income for working tax credit, making them entitled to maximum
As around two million families and individuals have yet to claim
the child tax credit and working tax credit due to them, any
measure, however small, that encourages take-up has to be welcomed.
Gary Vaux is head of money advice, Hertfordshire Council.
He is unable to answer queries by post or telephone. If you have a
question to be answered please write to him c/o Community